Zillow Group is receiving four times as many applicants per job posting compared to 2019, thanks in part to its flexible work model implemented in the early stages of the pandemic.
That’s one highlight from CEO Rich Barton’s letter to shareholders released Wednesday, part of the company’s Q4 earnings report.
The Seattle-based company leaned into a work-from-home model early in the pandemic, allowing nearly 90% of its employees to work at least partially remote indefinitely.
According to Barton, that bet has paid off.
The CEO and co-founder of the real estate giant said voluntary attrition “declined steadily across the organization” in 2022, down more than half in Q4 compared to Q1. He added that the company has been able to “dramatically broaden” its candidate pool.
“Last and most important, we are seeing increases in productivity in critical areas of our business — for example, our Premier Agent sales team is more productive today than it was before the pandemic,” he wrote.
Barton said last month that since Zillow rolled out the new work policy it received applications from almost 200,000 women and more than 180,000 BIPOC candidates compared to the previous period, up 60% and 46%, respectively.
The debate over remote work policies continues to roll on, three years after the pandemic forced employees home. Some companies such as Disney, Starbucks, and Apple are requiring workers to come in three or four times per week.
Zillow also moved to boost employee retention last year by increasing stock-based compensation. The company announced during its Q2 earnings call a new equity initiative to “shore up compensation” for employees who have a gap between planned and actual compensation.
“Practically speaking, it would be more expensive to recruit and replace valuable employees tomorrow than it will be to retain folks today,” Barton said last year during the Q2 earnings call. “Attrition and churn is an insidious barrier to growth.”
In the company’s Q4 earnings release, share-based compensation cost the company $110 million, up from $72 million in the year-ago period.
The moves to invest in employee retention is part of the company’s strategy to maintain an edge in an increasingly competitive real estate tech market.
During the Q4 earnings call Wednesday, UBS analyst Lloyd Walmsley asked how Zillow might be impacted by the emergence of Costar as a competitor in the residential real estate tech market.
“Building great consumer products and brands is really hard,” said Barton, who also co-founded Expedia. “It requires kind of ninja level skills on multiple dimensions, not the least of which is software engineering skills. And software engineering is in our DNA in this company.”
The employee retention moves comes after Zillow trimmed its headcount last year amid the housing market downturn, including a decision to abandon iBuying, the company’s ambitious home-flipping business.
Zillow slashed about 25% of its workforce after it decided to shut down Zillow Offers in late 2021. It laid off 300 additional employees last October.
“We see the same headlines you all see about tech companies cutting back their workforces to make up for staffing to accommodate unsustainable pandemic-level growth that is now normalizing,” Barton wrote in the Q4 letter.
“Our story is different,” he added. “After a year of significant people-related and other expense reductions in 2022, we are now investing during a tough housing market while others retrench, as we see real opportunity for growth.”
