Industry Insights

Hiring projections for 2020?

Hiring projections for 2020? Overwhelmingly, studies predict 2020 hiring will remain relatively unchanged year over year. Looking back on the last election year, 2016, the January Effect from budgets at full force and the mentality of New Year New Job will jump start 2020, as it did in the very lucrative 2016. Q1 bonuses will keep the momentum going with people who have cashed out and are at the point in their career a change is needed. April bonuses for young Analysts and Associates cause the yearly Bonus>Boom>Gone force as they move up to make way for the next crop of newbies. As we approach the 2020 election hiring will begin to pause if 2016 is any model. The real estate industry like the stock market thrives on certainty. The media will revel in signs of a recession as the slow down progresses. But if 2020 is like 2016, after the election and everyone has 2 weeks to process the results, hiring will make up for lost time. Susan Phillips, CEO, SelectLeaders Job Network.

To Read More Follow This Link: https://www.selectleaders.com/resources/2020-projections/

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Surprising Job Vacancy Costs You Can’t Afford to Overlook

It may be tempting to leave a vacancy unfilled in order to save money, but there are hidden job vacancy costs that will hurt you in the long run. Many of these hidden costs are substantial in and of themselves, but taken cumulatively, they could be catastrophic.

If you’re looking to calculate the cost of your vacant position or weigh the pros and cons of leaving a CRE position vacant, read on. Don’t run the risk of losing money you can’t reclaim.

A vacant position means payroll savings, right?

When someone in your organization moves on and leaves a vacancy, it might be tempting to leave it unfilled. After all, you have other people in their department who could share these responsibilities. Or perhaps you want to fill the position, b

ut now just isn’t a good time. At least you are saving on payrolls costs at present, right?

But as HR and hiring guru Dr. John Sullivan wrote about, the laser-focus on cost containment can create a blind spot for job vacancy costs that are only noticeable in the long term. This is especially true in sectors like CRE, because the emphasis is so often on cutting overhead. Yet overlooking these costs will inevitably cost your business far more than the payroll savings.

Typically, these job vacancy costs are overlooked because they are indirect, yet more expensive than you think. Trickling down, the liabilities of losing an employee or team member spread throughout your organization in surprisingly detrimental ways. This is why employee retention is so vital – especially in a competitive market.

6 Overlooked Job Vacancy Costs

These job vacancy costs fall primarily into six, specific categories. Each open, unfilled position will usually cost you in most or all six of these areas:

1. Revenue Costs

The most obvious job vacancy costs are of course related to the lost revenue from a position no longer being filled. Depending on the position, there may be associated costs from decreased response time, less innovation, underutilized assets, and inferior productivity that comes from others unfamiliar with the task filling in for the missing team member. A manager-level employee typically generates revenue equal to three to five times the amount of their salary. Leaving a position unfilled that paid only $50,000 annually could cost you $250,000 each year just in lost revenue.

2. Management Costs

Leaving a hole unplugged on a team means more stress and less productivity for team managers:

  • Managers spend less time managing and more time filling in on less valuable duties.
  • There is higher job dissatisfaction and turnover in management.
  • A multiplier effect often results in less productivity teamwide.

3. Personnel Costs

Other personnel receive mixed signals when a position is left vacant. As a result:

  • There are more sick days and tardiness.
  • Employees spend more time trying to learn skills related to the vacant position and do not excel at their own.
  • Quality of work decreases.
  • There is reduced creativity and innovation.
  • Frustration and turnover increase.

4. Customer Costs

Often, job vacancy costs surprisingly come in the form of a degraded customer experience. There may be less focus on the clients and customers. In turn, the reputation of your organization suffers. Long-term loss of market share is a common side effect of unfilled positions.

5. Competitive Advantage Costs

Eventually, if left unfilled, open positions communicate to analysts, potential clients, and potential employees that your firm is overvalued, vulnerable, or uncompetitive:

  • Corporate culture and morale suffer.
  • Partnership opportunities are lost.
  • Resources and assets can be overlooked and underused.

6. Team Costs

Job vacancy costs can mean a whole host of disruptions and liabilities at the team level. These equate to silent revenue drains that compound in the long run:

  • Team cohesion is undermined.
  • Underperforming team members are often retained or even given additional responsibilities.
  • The organization loses the ideas and skills provided by the unreplaced team member.
  • Teams hampered by vacancies often miss incentives and are less engaged and motivated as a result.

Surprising Job Vacancy Costs You Can’t Afford to Overlook Read More »

Time Off: Paternity Leave and Vacation Time

“We should take a page from the European script where holidays are a given and embraced by management.”

“The Wall Street Journal reported recently that Deloitte surveyed more than 1,000 US workers and one-in-three said they worried that taking time off would jeopardize their careers, and more than half said that if they used the parental-leave benefits available to them it would be seen as a lack of commitment to the job.”

Read the article summary here: Time Off: Paternity Leave and Vacation Time

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How to Choose the Best CRE Investing Career Path for You

If you’re trying to choose a CRE investing career path, and don’t know which one suits you, read on. If you want a career on the investment side of commercial real estate, this is for you. Understanding the advantages and disadvantages of each investment career and how suited you are to each path is crucial to your success.

We will discuss three primary career fields, break down the financial rewards and risks, and discuss key skills and considerations.

Choosing a CRE Investing Career Path

Maybe you’ve been considering a career in investment banking. Or perhaps you wouldn’t mind having a building or two with your name on the front. Or perhaps you are excited about working with capital and assets. Whatever brought you to commercial real estate (CRE) investing, knowing the path to choose can be confusing when you’re starting out.

The most common CRE investing career paths to choose from are in brokerage, lending, and on the principal side. Some have more risk than others, but also greater earning potential. And each requires different skills sets and work-style personalities to succeed. Let’s break down each to discover which CRE investing career path suits you best.

Brokerage

Working in brokerage is an open road to great money without a degree from a fancy school or a perfect GPA – as long as you know how to hustle and network. It allows you to work directly with assets and investors, generate significant cashflow, and eventually work for yourself making your own hours and schedule. Essentially, CRE brokers do what investment bankers do, but for properties rather than companies.

  • Personality Brokerage is a great CRE investing career path for those who desire autonomy and have the persistence and outgoing personality to make it work. Brokers can work on deals for years at a time before seeing results, so persistence is essential. You will most likely be out and about rather than behind a desk most of the time.
  • Compensation The sky is the limit when it comes to how much a CRE broker earns. If you’re are dedicated to the business and create and maintain a solid network of relationships and leads, you can make millions in a good year. Bare in mind though that most of these roles are solely commission-based, so your compensation is directly tied to your performance and ability to bring in and close deals.
  • Key Skills Brokers in CRE investing must be good at sales. Brokerage positions rely heavily on the ability to work with people and move deals. Also, whether you work as an analyst or associate or have someone filling those roles for you, you must understand basic financial modeling and deal analysis.

Lending

Lenders are fiduciaries to their companies or capital providers. This path provides a great back-door route to the finance industry with or without a degree from a target school.

  • Personality This CRE investment career path suits people who are rational decision makers with a lower risk tolerance. Successful CRE professionals in lending also enjoy building relationships with mortgage brokers, principals, and developers or other borrowers.
  • Compensation Income is rather stable in both up and down times and is largely composed of a set base with some upside.
  • Key Skills A lending career in CRE typically begins as an analyst or associate, so the ability to run financial models and perform deal analysis are critical skills for this role. Additionally, good people skills and the ability to build vibrant networks are indispensable to success in lending.

Principal

This is the CRE investing career path for you if you are interested in the ownership side of the industry. The principal is the firm or individual that puts up the capital to pay for the investment property. Working in this career path means you are the ultimate decision maker on moving forward with investing in deals, but it will require additional education and the ability to manage and evaluate investments.

  • Personality A principal, or individual working for the principal, must have strong persistence, as deals often take years to finalize. Relationship-focused people thrive, as this role involves matchmaking. Additionally, it helps to have a flare for negotiating, because this role requires hands-on involvement in deal making and negotiation. An analytical and strategic mind separate the successful investors from the rest as coming up with creative business plans/deal structures to align with company goals is the key to a profitable investment.
  • Compensation This CRE investing career path combines the best of both worlds, so to speak. There is typically a strong base salary as well as commissions and large bonuses, depending on your role on the principal side. The ceiling is even higher when you work for yourself rather than a firm.
  • Key Skills This role requires the ability to physically inspect and assess properties. Financial modeling/analysis is of course necessary to ensure profitable deals. And perhaps most importantly, it requires strong networking and capital-raising skills. The ability to raise investment funds and network with high-net-worth individuals is of the essence in this career path.

Sources:

How to Choose the Best CRE Investing Career Path for You Read More »

San Diego Developers Wonder When Boom Time Will End

San Diego development is still booming with exciting opportunities to bring more tech companies into the region. Last week’s panel emphasized how San Diego is still relatively cheaper than the rest of the West Coast and access to capital is plentiful.

Read the full panel recap here: San Diego developers wonder when boom time will end

Published in the San Diego Tribune by Phillip Molnar on June 19, 2019

San Diego Developers Wonder When Boom Time Will End Read More »

What the Nomad Economy Means for Hiring and Careers

Careers aren’t linear anymore in the new nomad economy. Instead, this new paradigm means employees and professionals can be expected to change jobs more frequently and employers view their responsibilities differently.

This has huge ramifications for businesses and professionals considering career prospects. What does career advancement mean now? How can employers remain competitive to shifting talent pools or retain the talent they already have?

The Rise of the Nomad Economy

Thirty years ago, an employee in the commercial real estate sector or in just about any industry could expect to work for the same company fifteen or more years. The expectation of a lifetime loyalty to the same company culminating in a fat retirement and a gold watch was a very real one.

Then the ladder of career advancement was straight and narrow. Hiring almost implied ownership. To get somewhere in your professional life meant company loyalty and moving up the ladder to bigger titles and pay raises.

But in the past decade or so, that has all changed. Even the past few years have seen this shift grow. According to the Bureau of Labor statistics, the average tenure of employees is just 4.2 years. Just a few years ago, it was 4.6. Removing the public sector, the average becomes 3.8 years. And it is expected this average will continue to plummet.

Leading talent strategy institute, Korn Ferry, recently named this phenomenon the nomad economy. Whereas leaving a job every few years was considered a sign of poor commitment or ineptitude, it has now become not only normal but expected. Professionals are expected to learn, gain from their experiences, and move into bigger and better roles – sometimes going into different career fields entirely.

Career advancement is no longer a ladder but a labyrinth. The path to success now requires lateral moves, occasional small steps down, and perhaps even jumping ship to leverage previous experiences for a new challenge. Companies are struggling to hang onto their best and brightest and find it difficult to justify investing in employees who are only going to move on in a few years.

What This Means for the Commercial Real Estate Businesses

2018 was a hugely successful year for the commercial real estate industry. Many businesses report a difficulty hiring or holding onto key talent. No doubt, the rise of the nomad economy is partly facilitated by the current strength of the US economy.

So how do commercial real estate businesses retain and attract top talent in a highly competitive market with professionals now viewing themselves more as free agents?

  • Allow Versatility In House Nimble and capable professionals prefer to change lanes often and work their way up. Give your people several roles to compete for or increase their responsibilities outside of traditional department boundaries. Allow them more opportunity for advancement within your organization to scratch that itch and keep them interested and committed.
  • Invest in Skills Development It may seem counter-intuitive to provide employee development programs in a nomad economy, but investing in your team is more important now than ever. Cross train and mentor talent to keep them invested and loyal.
  • Offer Competitive Pay Scales and Benefits It is crucial to be realistic about the value of top professionals. The commercial real estate industry is booming. Top talent is worth more now than ever. If you don’t incentivize ambitious professionals with top salaries and benefits, someone else will.
  • Remain Open to Candidates with a Non-Traditional Career Path

While it may not seem intuitive to consider new hires from alternative industries or departments,

hard skills and industry-specific skills can be taught. Soft skills and personality are inherent or

formed through various life experiences. Therefore, it makes sense to keep an open mind to folks

who, while they might require more training, align with your culture and may bring a new perspective.

What This Means for Commercial Real Estate Professionals

Brokers, builders, property managers, and other key players in the commercial real estate space have more options available then ever before. Professionals have the ability to explore curiosities, grow, learn, and make a more meaningful impact. Settling for 2-3% annual raises is no longer the norm when a smart career change every few years can bring about a sudden 10-25% hike.

So how do you stand out in the nomad economy as an exciting person to work with and entrust with key responsibilities? Some have boiled down the key ingredients to the acronym, PARLAY:

  • Purpose: Understand your personal motivations and keep your goals in mind.
  • Attitude: Be positive and giving in your interactions.
  • Relationships: Think of co-workers, bosses, and direct reports as part of an ever-expanding network that transcends your current work arrangement. Pay it forward.
  • Learning: Seek out and choose mentors and opportunities to advance your skills.
  • Awareness: Understand who you are, your strengths, and where you fit best.
  • You: Take charge. No one else is responsible for your career path except you.

For help navigating the nomad economy for yourself or your business, seek out the advice or help of a proven talent search firm who specializes in your space.

Sources:

What the Nomad Economy Means for Hiring and Careers Read More »

Does This Job Spark Joy?

Does this job spark joy?”

Now that the harsh San Diego winter is behind us, you might be thinking about starting your annual spring cleaning – getting rid of items in your home (or office) that you no longer need, asking yourself if it sparks joy. Made popular by author/cleaning guru Marie Kondo, this simple question can be applied to more than just old clothes and kitchen appliances.

In the spirit of new seasons and adventures, it might be time for you to ask yourself if you’re still happy at your current job, or if it’s time to start your own company. If so, you’re in the right place. Besides being home to some of the world’s coolest mission-driven companies, San Diego is also the perfect place to build a startup.” Well put by San Diego Regional EDC as they perfectly illustrate how San Diegans live, work, and play. #SDlifechanging

Does This Job Spark Joy? Read More »

2019 Economic Impacts of Commercial Real Estate

In 2018, commercial real estate generated $325.9B in salaries and wages and supported a total of 8.3M new and existing jobs.

Also, California was in the Top 5 states for development value in the office, industrial, and retail commercial real estate sectors.

Take a look at this video, which summarizes NAIOP’s findings in their “Economic Impacts of Commercial Real Estate, 2019 Edition”.

2019 Economic Impacts of Commercial Real Estate Read More »

NAIOP San Diego Developing Leaders Download: Q1 2019

Welcome to NAIOP 2019! We hope everyone is off to a great start! We are excited to welcome a number of new faces to the Developing Leaders Council and DL program this upcoming year. We have been hard at work setting up an all-star schedule for 2019. As everyone knows, the Mentorship Program is the backbone of the DL platform. We highly encourage all DLs to take advantage of this program. Each DL will be placed in a group of 10-15 peers with an accomplished real estate professional who will host happy hours, job site walk throughs, intellectual panel discussions, Q&A and one-on-one visits. Our mentorship program is designed to bolster technical acumen and develop long-term relationships by connecting young, motivated professionals within San Diego. In addition to the Mentorship Program, we will be hosting a number of fun events – happy hours, lunch & learns, charitable events, and NAIOPalooza. We’d also like to mention that NAIOP DL has a large charitable arm and has made significant donations in both time and money to San Diego nonprofits. NAIOP also has a legislative team whose goal is to educate its membership and promote policies which benefit our city and industry. If you’re looking to get involved, both the Charity and Legislative committees are great groups to consider! We want to thank all returning DLs, their corresponding companies and our Diamond Sponsors who continue to support our Developing Leaders platform. We appreciate your dedication to NAIOP and the commercial real estate industry! We look forward to seeing you all at our Mentorship kickoff event on February 28th. Thank you! Carly Glova & Preston Cavignac

View the entire newsletter including upcoming events here: DL Download: February 2019

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