As the unemployment rate in the U.S. remains at an all-time low, commercial real estate companies are eager to add experienced employees—if only they can find them.
“The commercial real estate sector, as a whole, feels the pinch of attracting young talent,” says Marc Torrey, global sales director at SelectLeaders, an online job platform that focuses on the real estate and finance industries.
This pinch also compounds the struggle to diversify an industry known to be mostly white and male, and where women continue to be promoted less frequently and see a greater pay disparity compared to men. While there have been moves within the industry to recruit more diverse candidates, there is still more that needs to be done, recruiters say.
“The challenge, however, remains there just aren’t enough minority [candidates]—there isn’t enough of anyone,” says Jeff Wittenberg, managing director at Texas-based recruiting firm Kaye/Bassman International Corp.
The hiring issues began with the Great Recession more than a decade ago. When the financial crisis hit and money from the capital markets dried up, people fled the industry and companies downsized.
When the economy bounced back, there seemed to be a sudden increased need for more workers, a spike that occurred around 2014. “There were so many needs created in such a short amount of time,” Wittenberg says.
During and shortly after the crisis, there was also no hiring at the entry level. “That lack of training has created a shortage of people who can step into mid-level positions right now,” says Dianna Rudd, senior director of facility staffing and recruitment at IMPEC Group, a California-based workplace consulting and facility management firm.
Today’s candidate searches are stubbornly demanding, and firms are grasping to find talented individuals to fill more roles. “The atmosphere … is, ‘I want somebody who can do everything right now,” Rudd says.
And while there may be a smaller pool of qualified individuals to step into higher-level roles, recruiters and hiring managers also have to grapple with a historically low U.S. unemployment rate. In July, the unemployment rate in the U.S. was 3.9 percent, slightly higher than May’s rate of 3.8 percent, one of the lowest in the country’s history, according to the Bureau of Labor Statistics. For the real estate and rental and leasing category, there was a 3.5 percent increase in jobs added in July from June.
Adair Bryan, human resources business partner at real estate services firm Transwestern, wrote in an email that he has seen more employment opportunities, but fewer applicants. “The best candidates often receive multiple job offers. This creates a higher demand for talent and more of a competitive candidate market,” Bryan wrote.
In 2006, when the economy was booming, it took about 50 views of a job post for someone to apply to that job—a high figure compared to the 10 views it would take a candidate to apply in 2013, when the economy was still in recovery mode, Torrey says.
In 2018, it takes about 30 views for a candidate to apply for a position, which makes it harder for recruiters to find candidates who are actively looking for a job, Torrey says. “It’s still a really passive market,” he says.
Denihan Hospitality Group, a New York City-based hotel owner and management company that employs around 100 corporate employees, ramped up its hiring about two to three years ago, says Chrissy Denihan, vice president of asset management and development at the firm.
While the hospitality industry has seen consolidation in recent years, which created a pool of talented professionals looking for new roles, the company also focuses on its culture and work environment to attract talent, Denihan says. “What’s unique about our company is that we’re a family business and it’s a lot more hands on,” Denihan says.
Denihan says aside from advertising on different platforms and investing in its human resources department, the firm has found the most success finding talent through word-of-mouth referrals from employees. This also makes for a stronger, more engaged team, Denihan says. “We’ve been looking for people who want to drive change and be creative and want to operate outside the box,” Denihan says. “We’re willing to wait to find the best person,” she adds.
Still, industry recruiters say a lack of awareness about the opportunities in commercial real estate persists. “It falls between the cracks,” says Leo Turley, founder and president of recruiting firm H Two National LLC.
To help combat this, an industry consortium recently launched CareersBuildingCommunities.org to better educate the public about the career paths available in commercial real estate. The consortium includes almost 30 commercial real estate organizations, including BOMA, NAIOP, Nareit and the Urban Land Institute, among others.
The website also notes the importance of recruiting women and minority candidates. Despite incremental steps, there is still progress to be made in diversifying the industry, says Wendy Mann, CEO of CREW Network, an organization that works to advance women in commercial real estate that was also a part of the new website’s creation. “There’s a greater level of awareness … there’s still a lack of sea change happening,” she says.
Improving a firm’s diversity can help business performance as well. Research from consulting firm McKinsey & Company has found that firms that are more diverse in terms of gender, race and ethnicity are more likely to see higher financial returns, for example. “It’s not just the right thing to do,” she says. “It’s the best business thing to do because you’ll be more profitable.”
However, a KPMG/NYU survey from last year found that just 6 percent of real estate funds are led by women. A 2013 report on diversity in the industry put together by Bricta Media LLC found that Hispanic men held 2.9 percent of senior executive roles, black men held 1.3 percent of such positions and Asian men held 1.6 percent. Female minorities held less than 1 percent of such titles.
Transwestern, which has been honored for diversity in the workplace, has seen more women and minorities in its recruiting pool, particularly as more women and minorities have been graduating from college than ever before, Bryan wrote. “While we aren’t specifically targeting either of those demographic groups, we naturally have more candidates in those groups as the workforce pool has changed,” Bryan wrote. The firm recognizes that a diverse workforce “tends to yield better, more creative solutions because you’re enjoying the benefit of different perspectives,” he added.
Smaller private companies, it appears, feel less pressure to focus on diversity, Wittenberg says. Not so public firms or larger private firms. “Some of the larger privately-held [companies] are mindful, they’re wanting to be corporate citizens,” he says. “They want to be better and they want to be more representative.”
One public REIT has taken a novel approach to the issue. Logistics real estate provider Prologis Inc. last year added an executive bonus tied to improving the company’s diversity and inclusion efforts. The company declined to comment for this story, but Prologis’ proxy statement noted that “2017 was a foundational year for our inclusion and diversity program driven by our entire executive team.” The company also implemented a new hiring approach to ensure diverse candidate pools and interview panels.
While Mann says she commends Prologis’ move, the bonus is also somewhat disheartening, “It makes me a little sad that money has to be part of the incentive. … I guess anything that makes a difference is good,” she notes.
Mann says all leaders should be held accountable for improving diversity within their firms. Hiring managers also need to demand from recruiters diverse slates of candidates to consider, and companies need to be proactive about changing the industry. “There are a lot of talented people in our world,” Mann says. “They have to be out there.”