The Hidden Cost of Bad Recruiting in Brokerages
A brokerage recruits 100 agents in one year.
It sounds like success.
But what if the agents who left produced significantly more business than the agents who joined?
Suddenly, the brokerage may have more people – but a weaker business.
That is the headcount illusion.
More Agents Do Not Always Mean More Growth
A 2025 U.S. study examined recruiting and retention among the 100 largest real estate brokerage brands.
Together, these brands recruited nearly two agents for every agent they lost.
Despite all that activity, their net sales-volume growth was only about 1.8%.
Why?
The agents leaving were generally more productive than the agents replacing them.
Departing agents averaged approximately $2.11 million in annual production, while incoming agents averaged about $1.44 million – a productivity gap of roughly 46%.
In fact, 81 of the 100 brands recruited agents with lower average production than the agents they lost.
Keller Williams provides one of the clearest examples. The company recruited more than 46,000 agents in 2025, yet still recorded the largest net sales-volume loss among the brands studied – approximately $7.4 billion.
Headcount increased.
The business became smaller.
The Numbers Brokerages Should Really Track
Most brokerages know how many agents joined during the year.
Fewer know:
How much production left with departing agents
How many recruits completed a transaction
How many remained after their first year
How much training and supervision they required
Whether their production improved after joining
Recruiting is valuable only when it strengthens the brokerage over time.
Otherwise, it becomes an expensive cycle: bring agents in, train them, support them, lose some of the best ones and begin again.
Why This Matters in Ontario
For an Ontario brokerage, recruiting is not only a sales decision.
It is also a compliance responsibility.
When a brokerage brings in a new agent, it takes on an obligation to provide appropriate supervision, education and support.
If an agent mishandles a transaction, misses an important disclosure or provides inaccurate information, the consequences may extend beyond that individual.
RECO can impose discipline fines of up to $50,000 on an individual registrant and up to $100,000 on a brokerage. It may also require additional education, impose conditions, suspend a registration or revoke it in serious cases.
A poorly prepared agent is therefore not only a productivity problem.
They can become a compliance, reputation and consumer-protection risk with every file they touch.
Culture Begins with Who You Recruit
Strong brokerage culture is not created by office slogans or recruitment campaigns.
It is shaped by who is brought into the organization, what behaviour leadership rewards and what standards it is willing to enforce.
Selective recruiting does not mean accepting only top producers.
A motivated new agent who is willing to learn may become far more valuable than an experienced producer who damages the culture around them.
The better question is not:
How many agents can we recruit?
It is:
Which agents can succeed here, and what will make them stay?
A Better Definition of Growth
A meaningful recruiting scorecard should include:
Production gained compared with production lost
First-year retention
Training participation
Compliance performance
Improvement in agent production
Reasons productive agents stay or leave
These measures tell a more honest story than headcount.
They show whether the brokerage is building a stronger organization – or simply keeping the front door busier than the back door.
Final Thought
Growth is not the number of agents listed on a brokerage website.
It is the number of capable, supported and productive professionals who continue choosing to build their businesses there.
Before celebrating the next recruiting milestone, brokerage leaders should ask one harder question:
If recruiting stopped tomorrow, would the agents already inside the brokerage still make the business stronger next year?
The answer may reveal more about the brokerage’s future than its headcount ever could.
AECORN
Market updates, buyer and seller guidance, and GTA insights from the AECORN editorial team.
