New stamp duties causing “prudent” hiring

Government efforts to cool the property market, most notably via last year’s introduction of new stamp-duty measures, will continue to have far-reaching implications in the months ahead.

The policy initiatives may or may not curb rising prices and keep home ownership within reach of the “ordinary citizen”, but one thing is already apparent. Major property agencies are reporting a slowdown in the number of transactions and, as a result, are scaling back their own plans for growth and recruitment.

“Since the two main measures – BSD [buyer’s stamp duty] and SSD [special stamp duty] – were introduced, market turnover has dropped significantly,” says Jeffrey Ng, senior executive director of Hong Kong Property Services (Agency). “With almost 35,000 estate agents in Hong Kong, the [current level of business] is definitely insufficient to satisfy everyone.”

That makes certain steps inevitable. Any hiring will be “prudent and selective”, with the focus on finding staff who have extensive experience in the sector and a proven track record. Individuals whose overall performances are not meeting expectations, meanwhile, will find themselves under more intense scrutiny than ever. “We tend to ‘clean out’ staff with low productivity by applying the so-called bottom-up system,” Ng says.

Current forecasts suggest generally sluggish market turnover in the first quarter, despite a brief rise following the recent policy address. A strengthening economy might lift overall prospects thereafter, but employees, whether specialising in the commercial or residential sectors, are best advised to brace themselves for a challenging period.

“If business slows, it is not always easy to redeploy staff to different roles,” Ng says. “But some people who leave the sector jump to sales-related positions in other industries because they have [suitable skills] and have developed a customer network.”

He is quick to emphasise, though, that the agency gives all employees every chance to perform to the standards expected. Promotions are merit-based, and take due account of responsibility exercised, targets achieved, and reputation built among colleagues and clients. A special two-year, in-house programme, meanwhile, offers university graduates the chance to start a high-flying career in the property business.

The programme consists of three parts – hard skills, soft skills and experience-sharing – with more formal instruction covering legal issues, branch operations, and the technicalities of such things as new and second-hand property sales, leasing, and how to conduct a land search. Training in soft skills includes team building – through outward-bound courses – and ensuring the necessary level of professionalism in sales, negotiations, and communicating with customers.

Experience-sharing includes coaching and motivational talks by senior managers, along with a wide range of site visits to gain an overview of the local and mainland markets.

“High-fliers can follow a clear career path from account manager to district manager and then up to director level,” Ng says. “Other staff who start as property consultants or sales trainees can go just as high.”

Vincent Chan Kwan-hing, executive director and chief executive (group residential) for Midland Holdings, has also seen the impact of the new duties, but has hopes that steady secondary-market transactions can help compensate for slower activity elsewhere.

“In the residential market, we expect luxury-property deals will suffer most from the imposition of BSD and SSD,” Chan says. “In the broader secondary market, transactions are likely to fluctuate, maybe with a peak after Chinese New Year and then a drop as purchasing power is absorbed. There is no doubt, though, that the latest government policies have brought some hardship for property agents.”

Total headcount and individual staff contributions will consequently be kept under close review. In particular, Chan hints at the importance of flexibility in forward planning and the need to implement alternative plans in line with changing market conditions, which could mean reassignments or short-term redeployments.

To build for the future, though, the general intention is to maintain a pipeline of good-quality candidates, giving them the skills and qualifications to move up to management roles.

“We provide many training courses for new staff to build up their level of professionalism and knowledge of the sector,” Chan says. “And when recruiting frontline staff, the first things we look for are a positive attitude and an outgoing personality.”

Training for graduate recruits includes preparation for the sector’s sales agent licensing exams. It also covers all the day-to-day practicalities of working with clients in a fast-moving and highly competitive market. Further courses on general management, to enhance soft skills, or on topics specific to the real estate industry are taught as and when necessary.

“For staff with a good sales record and accumulated experience, Midland offers a career path from entry-grade salesperson all the way to company management,” Chan says.

“We don’t conduct detailed surveys, but believe [those who leave] the company can join any sector because the experience they have gained enables them to handle a wide range of job duties.”