Pandemic-era disruptions have roiled the real estate industry, but when it comes to compensation, the impact on CRE firms has just begun to be felt.
With new leverage in an era of labor shortages and increasing concern about diversity, empowered workers have made it that much harder for firms and human resources departments to find and afford the talent they want, industry recruiters and researchers say. As a Deloitte CRE survey put it, “the tight labor market is bringing workforce issues to the forefront.”
Competitiveness explains part of the shift. Everyone, it seems, is hiring at the same time. Per CEL data, 66% of private firms and 58% of public firms are hiring, and 78% of all firms expect to have a net increase in headcount when the year is done. That’s a sharp rebound from 2020, when 1 in 4 firms implemented a hiring freeze.
“Salaries haven’t yet flattened out, but I am not sure how high they will go,” said Carly Glova, president of Building Careers, a commercial real estate talent firm. “Companies are slowly adjusting to the higher compensation packages, so there may be a continued adjustment period into 2022.”
Commercial real estate firms also stumble a bit when it comes to hiring young talent. CEL research finds that 48.3% of firms will likely change their talent management plans specifically to attract younger workers.
Building Careers’ Glova said that despite the potential awkwardness of making equity part of new compensation discussions, opportunities for equity are becoming more readily available and tied to specific deal metrics, becoming a more prominent part of the compensation package.
Remote working, and the ability to do so, has also factored into the industry’s wide-ranging talent search. Not that many senior positions and hires have problems with receiving or demanding remote work privileges, especially in tech-related roles, while junior roles have a higher bar to clear to earn a similar schedule.
Ultimately, the in-office issue is part of the larger, and immediate, need for talent in the industry, from life sciences to acquisitions managers. A worker shortage at a moment when the industry is pivoting and becoming more technologically complex means that experience is in even higher demand than usual.
“[Firms] are looking for people with specific skill sets that can ramp up quickly as most don’t have time to train entry-level people,” Glova said. “Candidates with more experience are more sought after.”