Every month, Kate Teves, HR consultant, recruiter and founder of The HR Pro, answers Realtors’ questions about anything and everything related to human resources. Have a question for Kate? Send us an email, or leave a comment below! 

Question: Dear Kate, what’s the secret to running a truly successful brokerage?

Kate: I often get asked a version of this question by both aspiring real estate professionals and broker-owners and although we know there is no singular trait/role that works for all, one trend has become crystal clear: brokerages and teams that invest in an agent success manager (ASM) consistently outperform those that don’t. 

Recruitment, retention, reputation, and true agent success—all see measurable improvements and in this industry, measurable improvements are as coveted as a prime waterfront listing.

How does this impact the broker of record role?

While it was widely accepted that the broker of record (BoR) must be an equal parts compliance officer, on-demand agent support, marketing manager, business development guru and mentor,  it is seldom possible for one person to be excellent at all things at once.  

The emergence of the ASM role allows a BoR to truly focus on traditional responsibilities of overseeing all transactions within a brokerage, ensuring adherence to legal standards and supervising agents to maintain ethical conduct—safeguarding both client interests and the brokerage’s integrity. 

With the advancement of technology and a focus on agent-centric models, the ASM role has been quickly gaining prominence from coast to coast. ASMs act as primary points of contact for agents, providing support, training, and resources to enhance agent performance and client satisfaction. 

Their responsibilities often include:

• Building relationships: Developing strong personal connections with agents to understand their needs and goals.
  • Curating a personalized plan for each agent based on their strengths and existing circle of influence.
• Providing real-time support: Offering immediate assistance to agents, ensuring they can effectively serve their clients by reviewing contracts and offers, supporting with clause writing, and assisting during negotiations.
• Leveraging technology: Helping agents utilize the latest tools and platforms to streamline transactions and marketing efforts. 
  • Training them on the benefits of using a CRM
• Mentorship:  conducting live and online training on ever-changing documents, regulations and best business practices.
• Accountability:  An ASM often acts as an accountability partner by having consistent meetings with the agent and keeping their finger on the pulse of their individual business.

Recruitment: First impressions matter (and last)

If you know me personally you would have heard me say this often, “Recruitment is like dating—it’s about making a great first impression but then also having the substance to maintain the relationship.” 

In brokerages with ASMs, candidates are wooed by the promise of ongoing mentorship, personalized support, and a clear path to achieving their goals. This isn’t just anecdotal. According to a 2023 survey by the Canadian Real Estate Association (CREA), brokerages offering structured mentorship programs—often led by ASMs—reported a 22 per cent increase in applications from top-tier agents compared to those that did not.

Without an ASM, recruitment often feels like speed dating: quick, chaotic, and with little follow-up. Agents might join, but without someone dedicated to onboarding and goal-setting, they’re more likely to look for other options within a year.

Retention: Keeping the band together

Retention is where the rubber meets the road. Real estate has one of the highest turnover rates of any industry, with the average agent switching brokerages every three to five years. However, brokerages with ASMs flip the script. By providing consistent coaching, recognizing achievements, and offering solutions to day-to-day challenges, these brokerages see turnover rates drop by up to 40 per cent.

Let’s face it: no one likes feeling like just another cog in the machine. An ASM ensures agents feel valued and supported, which translates to loyalty. Think of it like having a gym buddy—you’re far less likely to skip leg day (or, in this case, switch brokerages) when someone’s cheering you on.

Reputation: Word gets around

In business, reputation is everything. Brokerages with ASMs gain a reputation as places where agents thrive. CREA’s 2022 report noted that brokerages with dedicated agent support roles are 35 per cent more likely to be recommended by their agents to peers and isn’t that ultimately the best compliment and the easiest way to grow?

Contrast that with brokerages without ASMs. Agents in these environments often describe feeling adrift, which inevitably finds its way into conversations—and not the good kind. One agent’s frustration at a networking event can snowball into a reputation problem that’s harder to fix than a deal that’s fallen through.

True agent success: Beyond transactions

Finally, let’s talk about what really matters—agent success. Brokerages with ASMs don’t just focus on helping agents close deals; they focus on helping agents build careers. This holistic approach includes goal-setting, skill-building, and even work-life balance (yes, even real estate agents need balance).

The numbers speak for themselves: brokerages with ASMs see an average 15 per cent increase in agent earnings within the first year, according to a 2023 study by the Ontario Real Estate Association (OREA). Agents are more confident, productive, and satisfied—and it shows in their results.

So if you are an agent looking for your next brokerage, look for one that invested in a role to dedicate to your success.  If you are a brokerage or team leader pondering whether to invest in an ASM, the answer is clear. Your recruitment numbers will thank you. Your retention rates will applaud you. Your reputation will shine. And most importantly, your agents will thrive.

Every month, Kate Teves, HR consultant, recruiter and founder of The HR Pro, answers Realtors’ questions about anything and everything related to human resources. Have a question for Kate? Send us an email, or leave a comment below! 

Question: Dear Kate, As a busy agent, I find it incredibly helpful to have an administrative assistant, but I don’t want to deal with payroll, can they be an independent contractor instead?

Kate: That is an excellent question and the short answer is—it depends. Let’s review scenarios where a contractor relationship will make the most sense and others where the individual will not meet the requirements of a contractor and can be erroneously misclassified which can lead to costly consequences.  To answer this question, we will compare a contractor admin assistant and an employee admin assistant. 

The legal reality: CRA guidelines

Let’s consider the legal guidelines and why they matter. The CRA uses several criteria to determine whether someone is an employee or an independent contractor.

These include:

Control: Does the employer dictate how, when, and where the work is done?

Considerations:  Does the individual have a set schedule?  Do they work from your office?  

If your assistant is working on a set schedule, let’s say 9-5 when you can easily get a hold of them and expect immediate assistance and if they consistently work from your place of business, even if in a hybrid capacity, they will be classified as an employee.

Tools and equipment: Does the worker use the employer’s tools or their own?

Considerations: Did you provide them with a laptop or a computer at the office?

If you provided them with a laptop or a stationary computer, software, or programs (think Canva, Illustrator, etc) then you have an employee.   If they work exclusively on their own equipment and programs, in this case, are working with a contractor. 

Opportunity for profit: Can the worker independently pursue profit, or are they limited to their earnings from the employer?

Considerations:  Are they working exclusively for you?  

Employers can ask for complete exclusivity as well as a notification if the employee has obtained a part-time role elsewhere or is providing contracted services to another business.  Furthermore, an employer reserves the right to decide that the secondary income source is a competitor and limits the employee to only working with businesses outside of scope.

Contractors on the other hand are presumed and permitted to work with similar and often competing businesses without any complications, providing that they are abiding with the NDAs in place.

There are additional criteria to consider while assessing the relationship with your assistant and they are outlined below.

What happens if you misclassify?

Misclassifying an employee as a contractor might seem appealing—it simplifies payroll, avoids mandatory deductions like EI and CPP and eliminates the need for benefits. However, the consequences of getting it wrong can be severe:

Back taxes and penalties: If the CRA audits your business and determines misclassification, you may owe back taxes, CPP, EI contributions and penalties.

Legal liability: Misclassified employees can sue for unpaid wages, overtime, vacation pay, and even wrongful termination.

Reputational damage: Facing a CRA audit or lawsuit can tarnish your professional reputation.

Fines and interest: Beyond back payments, the CRA may impose fines and interest charges on outstanding amounts.

Case study: When misclassification costs big

The real estate agent who thought it wouldn’t matter

In one case, a Realtor in Toronto hired a full-time assistant and labelled them as an independent contractor. The assistant worked exclusively for the agent, used the agent’s office space and adhered to a fixed schedule. After their contract ended, the assistant filed a complaint, claiming they were an employee.

The CRA audited the agent and determined that the assistant was indeed an employee. The agent was required to pay:

• $15,000 in back CPP and EI contributions
• $8,000 in penalties and interest
• Legal fees exceeding $10,000 to resolve the complaint

What began as a cost-saving strategy ended up costing over $30,000—not to mention the time and stress involved.

Are you actually saving money by not putting your assistant on payroll? 

Let’s also consider a different scenario, one where the CRA does not audit your business. Are you actually saving money by not putting your assistant on payroll?  I am afraid the answer here is “no”.

Many of the reasons an agent would lean towards a contractor are because of the management of items such as CPP (Canadian Pension Plan), EI (employment insurance), WSIB (workers safety insurance board), and vacation pay. In most cases, this is done automatically by your bookkeeper especially if the employee’s hours do not fluctuate. So let’s do the calculations.

• Employee salary (full-time): $60,000
• Canada Pension Plan (CPP): $3,450.00
• Employment Insurance (EI): $840.00
• Workplace Safety and Insurance Board (WSIB): $822.00 (based on a 1.37 per cent industry average rate)
• Vacation pay: 4 per cent = $2400

Total spend: $67,512

• Contactor: $60,000
• HST (13 per cent): $7,800

Total spend: $67,800

As you can see the difference is actually negligible but the headaches you will avoid by doing it right the first time will be significant.

Misclassifying your assistant as a contractor may seem like a quick solution to avoid payroll complexities, but the risks far outweigh the convenience. The CRA’s employee classification guidelines are clear, and the consequences for non-compliance can be steep.

Hiring and compensating your administrative assistant properly is not just a legal obligation—it’s an investment in the sustainability and integrity of your real estate business.

The real estate industry is known for its fast-paced, dynamic nature and high-stakes transactions. Amidst the hustle and bustle of buying, selling, and managing properties, human resources (HR) professionals in this field face unique challenges that demand strict compliance with labour laws and ethical practices. From handling independent contractor relationships to ensuring adherence to federal and provincial regulations, management and HR departments in real estate must be well-versed in legal considerations to protect both the business and its employees.

Recruitment and retention

Many people believe that recruitment and retention in the world of real estate is proprietary to the industry. As a result, they are hesitant to entrust this task to anyone, often setting themselves up for unnecessary work, unsuccessful results and future legal troubles.

While there are specific nuances to keep in mind when recruiting agents or support staff into your business, the principles of recruitment are actually not that different from other industries:

• Having a strong employee value proposition (and agent value proposition)
• Having a consistent interview process
• Knowing which questions you can and cannot ask
• Having a contract ready for signing
• On-boarding plan and 30, 60, 90 days KPIs

Retention is also not a concept specific to the industry. All businesses are fighting the battle to keep their know-how in-house, retail top performers and have a solid succession plan in case someone leaves. Making sure your top performers are happy and supported comes down to leadership; asking questions about what you can do better to make their experience more meaningful and lucrative will reduce unnecessary turnover in both agents and employees.

Compliance with labour laws

Real estate brokerages and teams employ a diverse workforce consisting of sub-contractors, property managers, financial managers, administrative staff, and support personnel. Ensuring compliance with labour laws, such as minimum wage regulations, overtime, and working hours, is crucial.

To address this, broker/owners, team leaders and office managers must keep abreast of ever-changing labour laws and establish clear policies and procedures to guarantee adherence. Regular training sessions and communication with employees are essential to foster a culture of compliance within the organization. Having a well-defined employee handbook and hiring an employment lawyer to review HR practices can provide an extra layer of protection and guidance.

Handling independent contractor relationships

In the real estate industry, independent contractors, such as real estate agents, are a common part of the workforce. However, classifying workers accurately as employees or independent contractors is critical to avoid legal disputes and penalties. Misclassifying employees as independent contractors can also lead to wage and hour violations, tax issues, and potential legal battles.

There are strict guidelines provided by the CRA that discuss the main differences between an employee vs a contractor that should be adhered to at all times to avoid being blind-sided by prorated charges for expenses like CPP ( Canadian Pension Plan), EI (employment insurance) and vacation pay owed to name a few. In essence – if you have control over someone’s hours of work, the equipment on which they work, and the work is done continuously (not on a project basis), and the work relationship is exclusive — they are, for all intents and purposes, your employees.

HR departments must work closely with legal counsel to distinguish between employees and independent contractors based on specific criteria defined by relevant laws. Real estate businesses can mitigate potential risks by conducting periodic audits of contractor relationships and ensuring compliance with classification standards.

Handling confidential and sensitive information

Real estate transactions involve a significant amount of sensitive information, such as financial data, personal identification, and legal documents. Employee files and their security are equally as important as keeping client data safe. Management should implement strict data security measures to safeguard this confidential information from breaches or unauthorized access.

Establishing secure IT systems, conducting regular security audits, and educating employees and members of management with access to personnel information about data protection best practices are essential steps in mitigating the risk of data breaches. Owners, managers and HR should collaborate in order to develop comprehensive data protection policies that align with industry standards and comply with relevant data privacy laws.

Handling conflicts and disputes

While a misalignment between a brokerage and an agent usually results in said agent simply moving their practice to a different brand or starting their own, a conflict between internal team members or disagreement between the terms of employment between the business and one of the employees can have long and extremely negative effects of the team.

Having a well-trained management team or an external HR partner that can navigate and investigate the causes of conflict, find appropriate solutions for both parties to part ways amicably and, more importantly, stop it from impacting the rest of the business is a crucial part of preserving the reputation of your employer brand.

By prioritizing legal considerations, HR departments can build a strong foundation for a compliant, ethical, and thriving workforce in the fast-paced world of real estate. Regular training, collaboration with legal experts, and staying updated on regulatory changes are vital components of a successful HR strategy in this dynamic industry.