At one time, it was pretty standard for a real estate agent to be involved with every sale of real property in the US. When the market boomed a few years back, more people than ever jumped in to grab their share of this easy money. You can’t sell your house, building or lot without an agent and when it sells, that agent is entitled to 6-10% of the sale price. How did this system evolve? Is selling your property really that complicated as to require a consultant who ends up “earning” 10k, 20k, 50k or more. How much could this person actually be worth when to become an agent all that is required is reading one little book or taking a short course over a few weekends and then passing a basic competency exam? Apparently the public has finally given these questions the attention they deserve and the market has changed. For decades, the real estate business has thrived based on it’s control of information. While most of the actual complexity of handling a real estate transaction is dealt with by a lawyer, the brokers and agents have maintained their position in this deal by the guarding their information. In every state, an agency would maintain a book containing property listings, the MLS. This book was only available to licensed brokers. Furthermore, rules and regulations were lobbied in to place by this and other agent supported associations to secure their role in property transactions with the argument that they somehow protected the consumer. While not all of reasons agents and their strict code of ethics were imposed upon this market were bad, the price paid for such services and protection was clearly outlandish. Now, access to lists of property for sale are easy to come by, thanks to the internet. So is information on how to manage a real estate transaction. The real estate industry now finds itself on shaky ground and commissions have fallen drastically.
The same has happened in the car business. Web sites such as truecar are working to provide consumers with the information they need to make better buying choices. The car salesman used to play an important role in the typical new or used car purchase. Now, anyone with the internet can walk in to this type of transaction knowing almost everything needed to make a good choice without the help of a highly paid car consultant.
Quite a few other industries are experiencing similar evolutions. Almost any job with the title of agent, salesman or broker is either going away or adapting to much higher expectations and lower margins. Some are going away all together. When was the last time you called your stock broker? Personally I think this is great. Not only am I fond of economic efficiency and perfecting markets, but in times like these, it is becoming critical for the nations economic survival.
In all of this, one would expect the business of staffing, recruitment, job placement to be dwindling to nothing. Of all of the “agent” style businesses, this is arguably the most questionable in terms of value to the consumer. How does someone secure an income of 100k, 200k or more simply by running a few searches and making a few calls? Why has internet availability of information on the job market not totally eradicated this line of work? Clearly this industry is hanging on some how as year after year tech search firms, staffing firms and the like report 10s of millions in revenue with no end in site. The current job market is arguably in worse shape than the housing market. Why does this tax on employment still exist at all? Are recruiters providing value that other agents and brokers in other industries were not? Either the answer to this question is yes, or something else, something far less palatable, far less redeeming, far less defendable is happening.