The Real Estate and Goods Rental industries, particularly in sales roles, tend to have high turnover rates. This is rooted in the severe sales quotas based on a performance-driven system, long working hours for customer handling, and the instability of revenue being dependent on market and economic fluctuations.
This article provides a detailed explanation of the factors leading to high turnover in this industry, examining them from four perspectives: working conditions, compensation/benefits, workload, and career development.
Turnover Rates in the Real Estate and Goods Rental Industries (Reference Data)
The turnover rate in this industry consistently exceeds the all-industry average.
| Category | Real Estate and Goods Rental Turnover Rate | Average Turnover Rate Across All Industries |
| Annual Turnover Rate | 17.9% (2022) | 15.0% (2022) |
| Turnover Rate within 3 Years (New University Graduates) | 45.0% (March 2022 Graduates) | 33.8% (March 2022 Graduates) |
| Turnover Rate within 3 Years (New High School Graduates) | 52.2% (March 2022 Graduates) | 37.9% (March 2022 Graduates) |
1. The Issue of Working Hours (Long and Irregular Hours Based on Customer Schedules)
Working hours tend to be irregular, and long hours become the norm because employees must operate according to the customer’s convenience.
Weekend and Holiday Work:
- Essential Weekend Presence: Property viewings and contracts in real estate, or delivery and return of goods in rental services, concentrate on customers’ days off, making weekend and holiday work mandatory.
- Difficulty Coordinating Social Life: Time off is often concentrated on weekdays, making it hard to align schedules with those of the general public.
Normalization of Long Working Hours:
- Extended Sales Activities: Long hours accumulate due to the time spent on customer correspondence, property research, document creation, and travel, all essential for securing contracts.
- Extreme Increase During Peak Season: Workload increases dramatically during peak seasons (e.g., January to March for real estate rentals), leading to a significant spike in overtime.
2. The Issue of Compensation and Benefits (Instability and the Severity of Performance-based Pay)
The strong performance-driven system and the resulting unstable salary structure, combined with low fixed wages, are major factors in turnover.
Unstable Salary Structure:
- High Commission vs. Low Fixed Salary: Sales roles offer high commissions (incentives) for securing contracts but often have a low base salary, creating financial instability if contracts are not closed.
- Impact of Economic Fluctuations: Real estate sales and high-value goods rental are sensitive to the economy, leading to significant fluctuations in income based on market conditions.
Self-Pay for Expenses:
- Some companies require employees to partially cover expenses necessary for closing deals, such as client entertainment costs or vehicle maintenance for sales activities, which reduces actual take-home pay.
Difficulty Taking Paid Leave:
- The psychological resistance to leaving work is high due to the pressure to manage one’s own clients and the need to meet sales quotas.
3. Workload and Mental Stress (Harsh Quotas and Specialized Knowledge)
The pressure from sales quotas and the mental stress derived from customer negotiation are extremely significant.
Pressure from Severe Sales Quotas:
- Constant Pressure: Mandatory monthly or quarterly quotas create enormous mental stress from the possibility of falling short, leading to strict coaching from supervisors and negative performance reviews.
- Increased Pressure in High-Value Sales: The high transactional value, especially in real estate sales, intensifies the pressure.
High Level of Specialization and Responsibility:
- Continuous Learning Required: Employees must constantly study advanced specialized knowledge regarding real estate/goods laws, tax regulations, and contracts.
- Heavy Responsibility: The possibility of contract errors leading to significant harm for the customer weighs heavily on employees.
Interpersonal Dynamics and Competition:
- In highly competitive, performance-driven workplaces, weak internal relationships or excessive rivalry can contribute to stress.
4. Issues with Career Development and Training Systems
While immediate results are demanded, a lack of systematic training often leads to early turnover.
Lack of Training Due to “Immediate Results” Focus:
- Many companies adopt a “learn on the job” stance, resulting in insufficient systematic training and education.
- If support for obtaining essential qualifications like the Licensed Real Estate Transaction Agent (Takuchi Tatemono Torihikishi) is inadequate, the burden of knowledge acquisition falls heavily on the individual.
Polarized Career Paths:
- The career path can appear extreme: success opens doors to management, executive roles, or independent business ownership, while failure can mean losing one’s position entirely.
- In an environment where quota achievement is paramount, career paths emphasizing organizational contribution or mentoring new talent can be obscured.
The Structure of the Vicious Cycle
In the Real Estate and Goods Rental industries, a vicious cycle is prevalent: “Low fixed wages and unstable income →Mental pressure from failing to meet quotas → High demand for expertise and long hours of customer service →Early turnover of personnel who do not achieve results.” Critically, many employees exit the market early in their careers because they cannot withstand the pressure of a single metric—quota achievement—as the sole measure of success.
