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Unlimited PTO: The Pros and Cons

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There are three paid time off options to offer your employees: traditional, flexible, and unlimited. While there are pros and cons to all three options, unlimited PTO is a swiftly growing trend for many of the most competitive companies. Here’s everything you need to know about this popular policy.

The Pros:

Easier for HR departments

It’s important to note that paid time off is not purely vacation. This can include bereavement, sick days, vacation time, parental and family leave, short or long-term disability, and holiday pay– and keeping track of each of these allotments can become a logistical nightmare for HR departments. With unlimited PTO, while there should still be a system in place for approving time taken off, HR departments will not be bogged down with tracking and reinforcing hours taken and hourly limits of each category.

It’s surprisingly cost-efficient

Assuming employees don’t abuse the policy (which hasn’t historically been an issue– check the “con” list below for more information on this), unlimited amounts of PTO can save your company money. When there exists a specific amount of time that can be taken off, many employers will have to pay out the vacation days that aren’t used by the end of the year (or the end of employment, in some cases). With unlimited PTO, you will not be expected to pay out your employees for any vacation days not taken.

It’s a recruitment tool

As aforementioned, many larger and competitive companies are offering this PTO policy as an attractive recruiting tool. Unlimited vacation sounds good to everyone– including top candidates. In fact, in a recent PTO survey, 51% of participants indicated they would take a job for 10% less pay (all else being equal) if unlimited PTO was available.

Learn More: https://www.zenefits.com/workest/unlimited-pto/

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How To: Stand Out in an In-Person Interview

Leave a Comment / Blog, Interview Tips, Job Search, Set Yourself Up For Success

So you made it past the application, the phone interview…congratulations! Now you’re probably wondering how to stand out in an in-person interview? Coco Chanel says, “In order to be irreplaceable, one must always be different.” Sure, conventionality is safe and familiar, but is it memorable? Not always. But here’s a secret: they’re not mutually exclusive. You can be a traditionally professional candidate while still infusing extraordinary aspects to your interview. Be bold with your approach, and aim to not only be the most memorable candidate, but the best one too. Here are some ways to stand out in an in-person interview that the Building Careers RE team loves!

Stand Out in an In-Person Interview

Nail The “Tell Me About Yourself” Question

This will be one of the first questions you receive, and it’s a stellar opportunity to set the bar really high. Many people struggle with this expansive question, but if you can craft a narrative that speaks to your strengths, experiences, and interest in the job, you will be five steps ahead of the competition.

Find a Common Interest

Connecting on something in common is a great way for your interviewer to remember who you are. If you find a shared interest in documentary films, or maybe a love for a preferred app, take the time to make this connection clear. Just be aware of when it’s time to move on.

Learn more ways to stand out in an interview here: https://www.glassdoor.com/blog/11-unusual-ways-to-stand-out-in-a-job-interview/

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2020 CRE Outlook and What It Means for Hiring

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With a new decade upon us, many are concerned about the 2020 CRE outlook and how the new year will play out for hiring. Certainly, numerous factors will influence the commercial real estate market this year – from new local regulations to global trade wars to the national economic cycle. But will things be drastically worse, much better, or more of the same?

The research and reports division of CBRE – a prominent commercial real estate investment and data firm – recently released their outlook for 2020. Overall, the outlook appears positive. But there are a few bumps along the road as well as subtle winds and turns to prepare for. Let’s break down the primary sectors and determine what the 2020 CRE outlook is for the various market sectors and hiring.

The Economy

The US is currently enjoying the longest economic boom in recent memory, but it’s certain not to last forever. However, 2020 will likely not see an outright recession. Though growth will likely slow to near 2%, facing a trade war with China and waning fiscal stimulus, the slowdown will be barely noticeable. The commercial property markets should prove resilient, thanks in part to preventive interest rate cuts and other stimulating policy moves. Property market fundamentals should remain strong.

Capital Markets

The CBRE report predicts commercial real estate investment volume will remain high – on par with that of 2019. The cost of capital will remain low. This, combined with increased foreign investment, domestic investment into CRE, and lower interest rates, will mean most capital markets remain strong.

However, some sectors like multifamily may see some cooling off. And investment overall is expected to decrease at least 5%. This late in the economic cycle, it is understandable to see decreased risk tolerance in investors. Yet the search for yield combined with the significantly low cost of capital will likely bolster investment in some asset types such as alternative use real estate.

Office Space

While office-related hiring growth will slow down, the US is still likely to experience about .3% growth. This means office property completions will slow down, and downtown vacancies will increase. The primary demand for office space should continue to come from the technology sector – especially in markets such as Austin and San Francisco. Flexible office space inventory should grow by about 13% in 2020.

Industrial & Logistics

The 2020 CRE outlook includes a downturn in demand for industrial space. It is possible that supply will outpace demand by approximately 30 billion square feet. Outsourcing and industrial shifts are reducing demand for industrial real estate, yet vacancies should remain very low. Third-party logistics providers will likely fill this vacuum to some extent in the coming decade but not soon enough to impact 2020. Rent growth should remain around 5%

Retail

Consumer spending will remain strong slowing slightly to around 2%. Spending at this level will continue to support job growth and modest investment gains. However, with uncertainty in the world economy – especially in regards to the trade war with China – consumers may be more cautious, and retail demand will probably slow in many areas.

However, this year marks the beginning of a new trend for retail. Generation Z is increasingly turning to shopping malls and retail outlets in search of experience-based consumption. According to a recent study, over 80% of Gen Z prefer in-store shopping, which should drive traffic back to retail centers and malls.

Multifamily

2020 is expected to hold a slight downturn for multifamily properties. Vacancy levels should rise to about 4.5%, and demand should drop about 20%. Developers will still remain active, but the focus is on shifting to the suburbs. Rent regulations are also impacting some areas like California, New York, and elsewhere. San Francisco and Los Angeles both experienced slowing in multifamily after California enacted rent controls in 2018, and this year may see a further slowing for the same reason.

The 2020 CRE Outlook for Hiring

In light of these developments and trends, the 2020 CRE outlook for hiring is shaping up to be much like 2019. Hiring overall will remain high, but the field will require more talented and experienced professionals. As the economy begins to slow down, more unqualified applicants will cloud the talent pool. Now more than ever, an effective and strategic hiring process is vital in the CRE field.

On the job applicant side, prospective employees can expect a more stringent review process. Employers will likely be more selective as they brace for the coming slowdown. They will place more emphasis on cultural fit and experience.

The 2020 CRE outlook involves some minor shifts, but overall, it should be a great year. Smart companies and professionals who are paying attention will spot some new opportunities and continue to leverage old ones. Rate of growth will slow, but it will still be a growth year overall.

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Surprising Job Vacancy Costs You Can’t Afford to Overlook

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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.

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How to Choose the Best CRE Investing Career Path for You

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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:

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Is It a Good Idea to Accept a Counteroffer?

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Changing jobs is difficult, and whether or not to accept a counteroffer can be one of the most difficult parts of the process. Career changes are common in CRE, and they mean making difficult decisions.

But it’s worth thinking through the various facets of this question to determine what is right for you, your family, and your career. This can be an emotional and nerve-wracking ordeal, so let’s step back and break the matter down, piece by piece.

Why You Receive a Counteroffer

When you submit your resignation letter, your supervisor has real motivation to keep you on. That’s why approximately half of employers will respond with a counteroffer. Think about it from their perspective. You may have felt underappreciated or stunted or bored or underpaid – but the moment you resign, this is what your boss is feeling:

  • “This is horrible timing.”
  • “Perhaps I can keep him on until I can find a replacement.”
  • “What will this mean for morale?”
  • “Finding a replacement is going to be expensive.”
  • “How can he do this after all the training we have invested in him?”
  • “This had better not mess up my upcoming vacation plans.”

The people you work under have a vested interest to keep their company, department, and projects running smoothly. They are under a lot of pressure to maintain control of the situation and keep their superiors or stockholders happy. Your career is relatively low on their priority list.

And your resignation can be a wakeup call for them to do whatever it takes to solve this problem they now have. Chances are the concerns that caused you to initially explore the job market in the first place will not magically go away if you accept a counteroffer. You may even be viewed with suspicion if you accept the counteroffer and stay on.

According to Jim Stroud of the Bernard Hodes Group, your employer is thinking that “paying a little extra now is worth it in terms of keeping the train moving, versus the potential delays and issues that would arise from an empty cubicle seat.”

But this could be dangerous for your career.

Will Your Problems Be Solved If You Accept a Counteroffer?

When considering whether to accept a counteroffer, remind yourself why you chose to accept a new role to begin with.

  • Perhaps you were underappreciated and couldn’t get adequate compensation for your value.
  • Perhaps you wanted to work closer to home.
  • Perhaps you were bored or wanted a real challenge.
  • Perhaps you didn’t get along with your co-workers or boss.
  • Perhaps the company lacked culture or direction that aligned with your values.

Would a little more money really solve any of these and give you the fulfillment you seek? Are you just kicking the can down the road by staying? Or even worse, will you be laid off as soon as they find a suitable replacement?

Studies show employees who accept a counteroffer typically stay with their employer less than a year, according to Christopher Elmes of the Capital H Group, a human-capital consulting firm. They’re either laid off, or they continue to feel the same frustrations that drove them to leave in the first place. Elmes goes on to state:

“No matter what the offer or counteroffer is, if the underlying job dissatisfaction issues aren’t addressed, then it doesn’t make a difference…The sense of affiliation between the employer and the employee will be severed, and the employee may never be trusted again…Once you take the counteroffer, your relationship is now almost entirely predicated on cash, and that is not a healthy criteria.”

Stay the Course

If you were convinced about the new job, remember your reason for accepting, and stay the course. Politely inform your current employer that your decision was made carefully and based on many different factors. It is best for where you want to take your career. Consider avoiding disclosing details of your new offer in the first place (i.e. the new company name, how you found the role, or your new compensation details), when you give notice to eliminate the awkward position of a counteroffer. Be polite and professional, but firmly state that your decision is final.

Thank your employer your experience there first and foremost and also for their counter if it comes. Don’t burn any bridges. You never know what the future holds. But realize that reneging on your verbal agreement with your new employer can give you a negative reputation of not valuing integrity. In the end, the hazards of changing course after accepting a new job offer usually outweigh the perceived benefits.

The best response to a counter offer is usually a polite “No, thank-you.”

Sources:

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Summertime is the Best Time to be Hired

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In Select Leaders‘ most recent newsletter, they detailed why your odds of being hired increase in the summer. Read on for more of their insight.

Why successful candidates preferred to job search in the summer:

  1. More flexible start dates
  2. Less competition (Data shows that June is one of the best months to apply to a job and get hired, while December is at the bottom)
  3. Access to hiring managers (in the summer months, hiring managers and recruiters might have a tad more free time to engage with candidates that make that extra effort)
  4. Networking (slower months for getting business done, means more availability for lunches, dinners, and happy hours with your network)
  5. Ability to interview, without sounding the alarm with your boss.

Good luck landing those jobs this season!

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CEOs Share Their Most Helpful (and Unconventional) Career Advice

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Congratulations Class of 2019! You graduated and are ready to make your mark on the world. While your career path will vary greatly from your classmates’, This article provides more instinctual advice to landing and making the most of your first job out of school. Here are a few advice highlights from successful CEOs:

  • Choose a boss that you like and respect and who will motivate you and advocate for you
  • Accept a role with a supervisor who will be a good work role model
  • Make the most out of the position you are in and own it
  • Ask questions and don’t be afraid to ask for what you want
  • Find way to keep learning and challenge yourself
  • Be empathetic to others’ perspectives
  • Take risks; your network and support system won’t let you fall as far as you think
  • Be open to different paths, then commit to and go all-in on the one you choose
  • Assess the risks and follow your intuition

Read the full article here: CEOs Share Their Most Helpful (and Unconventional) Career Advice

Compiled by Chip Cutter and Vanessa Fuhrmans in the Wall Street Journal on May 10, 2019.

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Does This Job Spark Joy?

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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

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Challenges of Managing a Portfolio

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Real estate portfolios are often identified as the largest part of a company’s financial statement, specifically when owning and operating real estate is your business. Identifying opportunities to capitalize on investments is critical to maintaining a positive cash flow. However, like many investment strategies, there are challenges that must be assessed, reviewed, and overcome on a regular basis. Understanding the primary challenges that exist can assist an asset manager in creating a strategic approach to managing their commercial real estate portfolio.

Diversification in Assets

Each property type provides both advantages and disadvantages. For example, multifamily assets can prove to be at risk for vacancy and possibly negative cash flow, though their return can be higher than average. On the contrary, single tenant CRE properties such as a bank can provide stability yet a low return. A great asset manager knows that identifying and maintaining a balanced portfolio requires both risk assessment and market analysis. Incorrectly conducting either of these can create financial upset for the portfolio.

Investment Strategy

Taking into consideration a diverse portfolio paired with the ever-changing dynamics of the market presents a new challenge: determining an investment strategy to match your company’s goals. Not every investment strategy is the same. Some investors and companies may be seeking a high-risk portfolio, bringing them the highest return available in the market. Others may be long term investors, strategizing for the future.

Either way, there are three steps that must be continuously monitored to ensure that a portfolio is meeting benchmarks; this includes review of investment opportunities both current and future, analysis, and due diligence. It is important that your portfolio is constantly monitored in order to meet your current objectives. Real time market research can be time consuming, but vital to this strategic planning. Additionally, asset managers should be implementing growth strategies while understanding the needs of the company and/or investors, which is the key to continuously meeting their investment goals.

Regulations and Legal

With diversification comes a complex infrastructure of operational and financial documentation. Each asset in each market will have a specific set of city, county, and state regulations that may differ. Some companies will staff legal counsel to assist with this complex, changing system; however, this approach brings an entirely new challenge to the table – cost. At some point it may be necessary to hire an expensive, but knowledgeable and efficient team of attorneys, entitlements specialists, and 3rd party consultants rather than relying solely on administrative assistants to handle the complicated regulations.

Financial

The variation and size of a company’s portfolio directly impacts the challenges related to managing the financial aspect of the real estate. An effective asset manager will ensure proper management of their portfolios. They will be able to provide in-depth financial analysis, which includes an assessment of the P&L statements for all assets. For single tenant NNN assets, this can be as simple as deducting the loan from the income. However, for assets that require improvement and management, such as retail centers or apartment complexes, this balance sheet can become more intricate and complex.

Financial challenges also go beyond the numbers to evaluating the structure and workflow of the personnel and management. Inefficiency and ineffective employees can be the cause of financial loss to a portfolio, just as severely as a tenant not paying rent can. Wasted money needs to be identified and new tactics must be developed for growth.

The Truth: It Comes Down to the Team

Each identified challenge related to managing a portfolio can be broken down to one crucial component: the team supporting the portfolio. Real estate is not only a numbers game. It takes a team of qualified, knowledgeable, and hard-working individuals to ensure an optimal future for each identified portfolio.

From administrative support to hands-on property managers, all members of the team are an essential part of the future, and it is up to the asset manager to perpetuate a corporate culture that promotes teamwork, responsibility, and growth.

If you are an individual that feels like you have the skills to help an investor or company overcome their challenges with managing their portfolio, you can review open job opportunities here.

On the contrary, if you are a commercial real estate investor or company looking to expand your team, including seeking a new effective asset manager, working with Building Careers can help you expedite the process. Finding a team that can work together to overcome problems presented on all aspects while being cost effective is fundamental. However, finding this team of skilled and experienced applicants in itself can be time consuming and overwhelming. We can help.

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