Appraisers Debate Best Compensation Plan For New Appraiser Hires

An ongoing debate among owners of appraisal firms remains - "What is the BEST way to bring new appraisers (trainees) into the appraisal profession?" The usual question from a potential employer goes like this: "I am going to be hiring a trainee and was wondering how to handle the initial pay. I was thinking I should pay him/her an hourly wage at the beginning since it may take a while before he/she can type up an appraisal. I was wondering if there was a typical norm for starting pay of a trainee." The counterpoint (reponse) often goes like this: "You are going to PAY to train someone? Wow you are a nice guy. I simply can't see why anyone should be paid for learning a profession. It is a privilege to be taken under your wing and taught how to become an appraiser. If they went to the local college and were trained to be a computer programmer or a surveyor, would the college be paying them? You will be losing money because a lot of your time will be spent training, your liability will go up, and most of all you will be training someone who will be your competition two years from now." My thoughts . . . .(I welcome comments below) I do not agree the entry level appraisers (trainees) should be expected to work for FREE any more than any entry-level employee is. Even though most of us have college degrees, we all had to start somewhere. We pay for education not on-the-job-training. On the other hand, I don't think a new employee should expect to get a fee split while they're training.I think that there should be a graduated "Compensation Plan" so that ALL parties know what's what. For example:

• Who's going to pay for licensing education courses?
• Have they already been completed?
• What benefits are included with employment?
• When do they become effective?
• Is the trainee an employee or an outside "independent contractor".

If I were planning on hiring and training an employee (non-family member), I would start them out on an hourly wage and consider them an "Appraisal Assistant". That is, they are there to ASSIST and LEARN the business. They get acquainted with the software, the way the business works, the MLS,workflow, schedule appointments, etc. etc. They would be expected to accompany the owner and a variety of OTHER APPRAISERS if there are more than one in the business. They should get a well rounded view of the business. After a month or two (if they are productive) then can expect a pay increase. Maybe 20-30% . . and can START their "Appraiser Apprenticeship" along with their "Appraiser Assistant" duties. If things look like they are working out . . I would take them off the hourly "clock" and go to salary. They should be assigned a primary mentor and that person is responsible for their on-the-job-training. They should work in tandem with the trainer and eventually start producing complete reports in tandem with the trainer. That is, the trainer will continue to complete the report, but the trainee should TOO. Comparing the Trainee's report to the Trainer's report will quickly show short comings. Through Q&A sessions and in-field discussions the Trainee will begin to "get the picture". When the trainee starts to debate (defend their position) with the Trainer, they are usually ready to get shoved from the nest and go on a Fee Split. (40/60). I believe it should be a slightly lower split to start because you'll find that once they have to take "authorship" for the work product they will slow down a bit and will also start asking questions again. As they get into "production mode" they can progress into the 50/50 and maybe 60/40 splits. Some new hires will actually bring in *New* business and that effort should be rewarded with a higher than normal split for THOSE accounts. There are lots of other types if "incentives" (volume - turntime) that can enter the picture. I WELCOME comments and other opinions from appraisers on this topic!