Bullpen supports all types of recruiting - freelance, contract staffing, and permanent placement. We consider ourselves a "full-stack" people provider for commercial real estate.
Based on our client's wins and losses, I've shared several best practices regarding how real estate teams use different types of people in their businesses below.
Common language is important when you discuss labor - let's start with some definitions:
- Employee = A person who works for a company as a full-time, W2 team member.
- Contractor = A person who works on a full-time, 1099 contract basis with a company.
- Freelancer = A person who works less than full-time for a company, typically in a flexible, contract relationship.
- Agency = A third-party company used for outsourcing work and strategy
TLDR; Most companies, if successful, will eventually grow to a point where they have adequate internal talent to cover the day-to-day needs of their business. When a large real estate firm needs specialized knowledge that is not in-house, it will likely engage a full-time contractor or agency instead of a freelancer.
Leaders of small to mid-size companies, 10 - 100 people, will commonly staff their company with a mix of full-time employees, contractors, and freelancers. They will also outsource back-office functions like accounting and fund administration to agencies.
Use case for permanent, full-time employees
Full-time, W2 employees are the backbone of your company. If a person leads others or owns relationships with your investors or clients, they should be full-time.
I recommend only offering equity positions and/or carry in your deals to full-time employees. We find it a best practice to make the rewards associated with those positions contingent on current employment with your firm.
Use case for temporary contractors
A "contractor" is a person who works on a full-time, 1099 contractor basis with a company. Hiring contractors directly is very difficult under current labor laws. One of the biggest values staffing companies provide is compliance with contract labor laws.
Our clients use contractors for a few purposes:
- To try out a new hire before hiring them as a W2 employee
- Handling work overflow that their full-time team can't support
- Backfilling a temporary leave of absence (maternity leave, sabbatical, etc)
- Short-term projects (ex. 6-month development management)
Use case for freelancers
We consider a "freelancer" someone who works less than full-time for a company, typically in a flexible, contract relationship.
Freelancers are great for short-term assignments that do not need full-time support. Our clients typically use freelancers for the following:
- Expertise that isn't in-house
- On-going help that isn't enough regular work for a full-time hire
- When they are in a pinch and need help very quickly
What about outsourcing/agencies?
Key business functions that provide a competitive advantage over your competitors, like asset management or project management, should be kept in-house and staffed with full-time, contract, or freelance team members. The full-time team should be the foundation of the operation, while freelancers can support overflow work as you scale.
In our experience, agencies are best used for functions that are not client-facing AND do not provide a competitive advantage to the business.
For example - During periods of high loan volume, big banks will outsource loan underwriting to agencies. Unlike investment and development firms where acquisition team members will interface with external parties, bank underwriters are usually not client-facing, and the underwriting process is very structured.
Other use cases for agencies include accounting, AR/AP, payroll, legal, talent acquisition, etc.
