Property Has A Social Class Problem, And Middle Managers Have A Lot To Answer For
What is it about signet rings, the interviewee mused. “Clearly part of some family connection secret code that I’m excluded from.”
For the anonymous interviewee of a scathing report into social class in UK commercial real estate, the signet ring, the jewellery of choice for a certain kind of upper class male Brit, epitomises the problem the sector has when it comes to class diversity.
Every industry has a culture, a set of codes and rules forged over decades, even centuries, that govern how it works. In real estate, that culture is an issue, holding the industry back and creating broader problems for society. And the sector might be looking in the wrong place for solutions.
Data gathered in late 2020 shows that professionals in commercial real estate companies are drawn disproportionately from higher socioeconomic backgrounds. Social class has been somewhat overlooked in the efforts to improve diversity in the industry, but it is a vital issue, because it intersects with other areas where property is lacking, like ethnicity and gender.
Much of the effort to improve diversity in class and other areas has focused on the pipeline, getting a broader range of young people into the industry. Experts say this is important, and these efforts shouldn’t be abandoned. But they also perhaps miss the point.
“The focus on access is welcome, but there is no real connection between access and who actually gets in and even more so, who gets ahead,” Bridge Group Chief Executive Nik Miller told Bisnow.
Bridge Group undertook the first-ever survey of the socioeconomic background of workers in the property sector, with results that are worrying even if they aren’t surprising. The research was funded by the JLL UK Foundation.
Miller said instead of focusing on access, the sector needs to scrutinize those codes and rules that create a culture, ones the data now shows are stopping people from less affluent backgrounds from reaching the top of the sector, to everyone’s detriment.
The numbers from Bridge Group are stark. It collected data from 12 property companies, including brokerages, investors, developers and planning advisors, and found 45% of employees overall attended an independent or selective state school (28% and 17%, respectively). That compares to 7% of the UK population who were privately educated and 5% who attended selective state schools.
On average, the real estate firms in the research have a smaller proportion of employees from lower socioeconomic backgrounds (27%) compared with, for example, leading accountancy firms, finance firms and the population of UK CEOs, Bridge Group said.
Employee profile is less diverse the more senior the level. Among senior executives, 34% attended an independent school, and half attended an independent or selective state school — and among this group, 52% are from a higher socioeconomic background when analysing parental occupation. This is less representative compared with occupations such as MPs, FTSE 350 chairs and BBC executives.
Class and socioeconomic background have been overlooked in the conversation about diversity in real estate because unlike gender or ethnicity, they are not always easily visible.
“Unlike gender or ethnicity, social class doesn’t have protected status in legislation, and it is harder to define,” Canary Wharf Group Managing Director of People and Culture Jane Hollinshead said.
Hollinshead is from Liverpool in north west England and came from a working class family. Applying for her first job as property lawyer, she was told she’d be better off spending money on elocution lessons, rather than a suit.
That was some years ago. Mockery might not be so aggressive today, but Bridge Group found in its interviews with property professionals that jokes and “banter” about social class are still common and have a damaging impact on the self-esteem of those on the receiving end.
“The sector has done some good work on gender and ethnicity, is starting to get there on LGBTQ, but in the big companies there aren’t really any groups dedicated to social mobility,” Hollinshead said. “But class is a thread [that] draws together a lot of those other factors of diversity that real estate is trying to improve.”
This idea of intersectionality — the interconnected nature of social categorisations such as race, class and gender which create overlapping and interdependent systems of discrimination or disadvantage — is again borne out in Bridge Group’s research.
Men are 21% more likely to be from higher socioeconomic backgrounds than women in the property sector, it found. White employees are 40% more likely to be from higher socioeconomic backgrounds than those who identify as Black.
The data is striking, but it is also rare, and almost everyone to whom Bisnow spoke said that firms need to capture more data on the social background of their workers if the problem is going to improve.
That lack of diversity, in class or otherwise, has implications for society as well as the sector.
“The sector should be building places for the communities where they are working, asking and understanding what they want, and the quirks of those communities,” BAME in Property founder Priya Shah said. “You shouldn’t go in and assume.”
She gave the example of retirement living communities built in areas with large South Asian populations, where elderly relatives tend to live with families instead of specialised housing. The land could have been put to better use for the community, and the developer has built something that won't be profitable, Shah said.
More broadly, accusations of gentrification and creating unpopular new places are often levelled at the real estate industry, particularly when “regenerating” housing estates where much of the existing population comes from a lower socioeconomic background. This may stem in part from the lack of class diversity in the industry.
“You have to know your customer, and for that you really need to have someone who has grown up in that environment,” Hollinshead said. “Otherwise you get the groupthink that can lead to some pretty catastrophic outcomes.”
Beyond individual developments or projects, a lack of diversity could be holding back the industry in helping the world fight what may be its most pressing problem.
“The risk is you’re not attracting the brightest minds to the industry,” said Colin Peacock, Swallowfield Homes director and clerk of the Worshipful Company of Chartered Surveyors. “If young people are expressing anxiety about climate change, we need to encourage them to come and get involved in our sector, and help us get it right and do our bit.”
The Bridge Group report said while there is an issue in terms of making the pipeline of young people coming in to the industry more diverse, that is not the biggest problem what it comes to improving class and other forms of diversity.
“Those higher education courses most respected by real estate employers are, on average, no less diverse than other courses in this discipline in the wider university sector,” the report said. “It is therefore unclear that the lack of socioeconomic diversity in real estate is a pipeline issue: It appears to us that the sector also actively creates its own barriers and inequalities.”
Those codes and rules, the signet rings and insider knowledge, are hindering the progression of people that aren’t in the know, and in many cases are causing them to leave the sector.
“There are dominant cultures that need to change,” JLL UK Charitable Foundation Chair Mark Stupples said. “People get promoted not because they are the best, but because they look and sound right.”
Bridge Group’s Miller said the path to promotion and career advancement is more opaque than in the industries to which property should be comparing itself, like law or accountancy.
“I’d compare it to something like broadcasting, where there is a lot of emphasis on familial connections and how you get in,” he said. “The routes to how you get ahead are not clear, and a lot depends on what happens early on.”
Both Stupples and Miller agree that middle management has a big role to play in creating these problems — the people coming into the industry are diverse, up to a point, and top management might have affirmed strong diversity goals. But the middle managers taking the decisions on who does or doesn’t get promoted might be sticking to the same set formula of promoting people just like them.
The solution, Miller said, is to “formalise the informal” to make sure the promotion system and what is required to get ahead is as clear and transparent as possible, that everyone knows the rules, and advancement is based on achievement rather than the fact that you might sound right.
“You have to make sure that managers can’t game the system when it comes to choosing who gets ahead,” he said.
“While it is both difficult and problematic for organisations to try to dictate who builds relationships with whom in the workplace, they do have the power to decide the autonomy that senior staff have in bypassing, circumventing or ‘gaming’ formal processes regarding hiring (especially for experienced hires rather than entry level roles), promotion, progression and work allocation,” the Bridge Group report said.
To focus on the problems of retaining and promoting staff that are from a lower socioeconomic background is not to say that everything possible is being done to make the flow of young people into the sector is as diverse as possible.
“It’s not enough to just come in to a university like us and say, you’re welcome in the industry,” London South Bank University Director of Alumni and Development Olivia Rainford said. “You have to come in and explain how the system works, help them with the application process, basically change their social capital.”
LSBU has a well-established real estate degree programme, but its students tend to be of lower socioeconomic background than the average across British universities. Rainford said that 99% of the students at the university are state educated, and a majority are the first in their family to go to university.
She said that while some big real estate firms with graduate recruitment programs engage with the university, attending careers fairs and coming in to talk to students, by no means all of them do, and sometimes they go about it the wrong way.
“We don’t always make it easy for them — universities can be complex organisations to navigate when it comes to graduate recruitment or industry engagement — but we are only about a mile away from where most of these firms are headquartered,” she said.
“Putting on a drinks reception is great, but a lot of our students are older, or work part time to fund their studies. Are they going to get a babysitter or miss a shift to come to an evening event? You need to understand people’s lived experience. Why not come to the source of diversity, we have it right here.”
Various organisations are working to directly match firms with those sources of diversity. Among them is Building People, an initiative supported by the Worshipful Company of Chartered Surveyors.
A social enterprise, the Building People platform aggregates built environment resources, events and job vacancies, and connects these opportunities to a network of more than 36 organisations/initiatives that have the reach into diverse and under-represented audiences like women, BAME people, ex-military, LGBTQIA+ people, ex-offenders and young people, plus a new group focused on health, safety and wellbeing. It is trying to simplify a fragmented careers landscape and enable equality of opportunity via a one-stop shop that promotes and takes users to aggregated careers opportunities.
“The industry has done a lot of talking,” Building People founder and Chief Dot-Joiner Rebecca Lovelace said. “But it is time to stop talking, engage and get practical.”