The talent pool for commercial real estate professionals is dwindling. How can the industry curb the tide and bring in more professionals, more diversity, and more young people?
During the CCIM Global Conference in October 2018, CCIM Institute gathered a panel representing the construction, development, and education sectors to discuss the shrinking workforce and how to combat it. The panel included Dionne Edwards, CCIM, (moderator), vice president of corporate real estate, SunTrust Bank; Collete English Dixon, executive director of the Marshall Bennett Institute of Real Estate, Roosevelt University; Jeff Lyon, CCIM, CCIM instructor and chairman & CEO of Kidder Mathews; and Brian Murray, CEO, Ryan Companies.
Dionne Edwards, CCIM: NAIOP estimates that by 2025, the commercial real estate industry will be faced with a shortage of 15,000 to 25,000 qualified leaders without a significant number of younger leaders to replace them.
We know what the stats say about the shrinking workforce, but what are you seeing and how do you feel about the current talent pool?
Jeff Lyon, CCIM: I’ve got almost 800 total employees in the company, of which 380 are brokers, and there was a lull in getting young individuals into the brokerage business. We’ve had a resurgence of kids coming out of college that actually want to get in the business. But across the board in every one of our positions, it’s a real challenge finding talent.
Brian Murray: At Ryan Companies, it’s a very similar experience. We have 1,200 employees, and about 800 of them are construction, project managers, and superintendents. There’s an awful lot of competition in the marketplace for great talent, and we need to be able to differentiate ourselves to be able to attract and retain people with these talents in a marketplace where post-Great Recession, we lost a lot of people to the construction industry, and many of them went to other industries and never came back.
Collete English Dixon: As an industry, we have not done a very good job of creating a more transparent perspective of what are the skill sets, what are the opportunities, what are the roles that young people might aspire to do. I think it can go a long way to making a difference in building a strong pipeline.
Edwards to English Dixon: For a long time, you were an investment manager. Now you are an educator. How, if at all, has your view of the CRE workforce changed as you moved from investment manager into the education world?
English Dixon: It’s the same problem. It’s looking at how young people see a path and how we get them on it, how we keep them on it, and how we hire them once they get to the other side. I’ve also been able to see through a graduate program a little bit of bias in the industry’s viewpoint about what that entry-level talent looks like and expecting that it always looks like a 22-year-old right out of undergrad. There are a lot of people coming into the industry from other [ones]. They’re going to school to get the knowledge, yet it’s very hard for them to find a spot to stand in.
Lyon: We’ve been working with the universities up and down the [West] coast who have real estate programs or business programs and using [the students] as interns to get them to understand the wide range of options in our business. They hear about the brokers, they hear about the money that could be made, and they see everybody driving the cars and all the good stuff, but they don’t understand that it takes a long time to get there. Our business is very, very tough.
We have a program where we’ll bring in a runner for a year, and they have a mentor to learn the business, to learn what’s going on in the market. We need to reach out to the young people, show them the cross-section of our business and let them figure out where they want to go.
Edwards: What are you doing to attract and retain top talent?
Murray: Our culture is probably the most overarching attraction for people into our business. At Ryan, we have an inverted pyramid where our employees are at the very top, and we take care of our employees, who in turn take care of our customers.
From a recruitment perspective, we go to 25 different diverse career fairs at different universities. We have really made a focus in the last two years on diversity and inclusion. From the construction side, we’re probably 90 percent men and 10 percent women. On the real estate management side, it’s probably 75 percent women, 25 percent men. In our architecture and engineering, it’s probably 50:50.
We have an emerging leaders program where every year we pick anywhere from 10 to 20 of our young, up-and-coming leaders and put them through a year-long program.
Edwards: Brian and Jeff, How do culture, location, and technology impact retention within your firms?
Lyon: Our company is successful today because of our culture. We’re a very entrepreneurial company [and] have a very broad base of ownership. One of the things that retains our people is that they’re able to be a partner in the company. We’ve doubled the size of our company in the last three-and-a-half years, and we’ve attracted some unbelievable talent because of our culture and who we are.
Murray: At Ryan, our chairman, Pat Ryan, who is a third-generation Ryan leader in the business, often says that culture trumps strategy every time or culture eats strategy for breakfast, and we truly believe that. We also have integrated real estate solutions from beginning to end in the life cycle of a building – from initial design to the real estate and asset management on the other end. [That’s] another part of our culture that is unique and differentiates us in the marketplace.
Edwards: Collete, what are you hearing from your students about how factors like culture and technology influence their application decisions?
English Dixon: I think culture is incredibly important. When you have a student body like we do that’s incredibly diverse by every slicing and dicing of socio-economic demographics data, the idea that they can join a firm where they can find a comfortable spot, it is a big discussion. Some megafirms hit the mark really well, some don’t. Some small firms hit the mark really well, some don’t. That information does get around.
Technology – I think the question is new talent’s comfort [level] that a firm is cutting edge with its technology – [using it] to provide the sort of resources and knowledge that’s necessary to be successful – but not to replace people.
Murray: The construction industry is the second-worst industry in productivity over the last 40 years. If you think about the impact of construction and the challenges that we face in recruiting talent, technology is an opportunity that our industry needs to advance significantly. There’s technology out there that can make our workplaces safer.
As an industry, we’re seeing a movement toward modularization and prefabrication, but we have a long way to go. We have to embrace that, and technology can be an enabler moving forward and can help us to improve the concerns that many young people see in entering the workforce.
A big part of the challenge in the construction industry is getting people to enter the trades. We need to expose youth at a much earlier age to see this as an opportunity and use technology to create a work environment where they feel like they can thrive in, but also be safe and not take a toll on their bodies.
Lyon: We’ve been hearing for so long that technology is going to get rid of the real estate broker. But it really boils down to data – information that we have about the marketplace. We haven’t figured out how technology is really going to impact us yet. Is there an Uber of real estate out there? Is there an Amazon of our business that’s going to disrupt everything? The business really hasn’t changed that much, but technology has helped us be better at what we do. You still have to know the market; you still have to know your product; you still have to know the people – and bringing those three things together is how we do transactions.
Edwards: The commercial real estate industry is still lagging on diversity. How are your companies dealing with this?
Murray: We started in an accelerated fashion on diversity inclusion two years ago. The first meeting, we brought in our 200 leaders throughout the company to a conference, and hired an acting group to do skits describing conversations every single one of us have had in the workforce, or at home, or at a cocktail party that border on [being] offensive – what do you say or how do you interact or how do you have a perspective about people that are different than you, whether it’s a different sex, race, or sexual orientation? Those skits opened up conversations to enable people to realize that we all come from different perspectives, and we need to understand where our starting point is. The ultimate goal in our journey is for our workforce to be far more diverse than it is today.
We have probably 8 percent people of color out of our entire 1,200 employees. We’ve had every employee do an unconscious bias training. Our senior leadership group has taken an intercultural competence test that enables us to understand where we are on the continuum of understanding different cultures to help us work together as we move forward.
We’ve just begun a new organizational structure where an executive leadership team will elevate a couple of senior women in our business to have a seat at the table that didn’t exist today. We have a women’s network where women across all different functions get together to talk about women in the workforce.
Lyon: I’ve got the brokerage [side of my] business, and it is predominantly white males across the board. I look at my property management group, I’d say that 50 percent are women. It’s a real challenge to diversify in our industry. That’s one of the reasons we are going to the universities – because you go to universities and you look at the classrooms, and there’s a lot of diversity.
English Dixon: You need to start in the high schools that feed into the colleges to get some of this talent thinking about [the industry], and it means that you connect with diverse population high schools, diverse population universities. For a diverse employee base to be attracted to a firm, they’ve got to believe that the culture is accepting – it is not just diverse, it is inclusive. We tend to lump them together, but they’re very different.
Everybody in the industry who believes that diversity is important has an opportunity to help move the needle – it’s through young people we meet who are trying to figure out what they’re going to do. Let’s talk to them about the industry. Let’s consider mentoring some of them to pursue that. We’ve really got to build a house around real estate that looks hospitable and looks welcoming.
Edwards: What steps do you think educators can take to better prepare the next generation of commercial real estate pros?
Lyon: It’s easy to do internal rates of return and all the analytics and everything we learned in the CCIM courses. The biggest challenges are writing skills and communication skills. So many people get in the business and they don’t even know how to make a presentation, to make a pitch. In our business as a broker, you’ve got to be willing to make the call, and if they don’t have communication skills, they’re not going to make it.
Source: Catherine Simpson Olson