CRE Diversity’s Supply-And-Demand Problem
Real estate companies are stepping up left and right with pledges to improve the diversity of their largely white workforces. But when recruiters tell them that commercial real estate has a supply-and-demand problem for diverse talent, are they willing to put in the hard work needed to bring about change?
Collete English Dixon is executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University, a graduate program at a university with one of the most diverse student pools in the country. For Dixon, the real estate industry needs to do a better job of explaining what it does, and it needs to grab the attention of young people earlier: By the time they are in college, it is already a bit late in the day.
Doing that takes work and can't necessarily be done using the virtual tools increasingly common in recruitment but is vital if real estate is truly going to improve its record on diversity.
"The talent pipeline is just a matter of where you’re looking, what the feeders are that feed into that pool where you’re looking, and about how we can simplify those feeders to make sure there’s a reasonable way in" for Black students and students of color, Dixon said.
She added that the solution to a homogenous talent pool could be as simple as tweaking a company's recruiting approach. But at some point, and maybe soon, the industry will have to reckon with a deeper problem: promising young candidates who would be ideal fits for roles in CRE might not want jobs in the industry. Because of its inherent barriers to entry, they might not know what it is.
‘A Lack Of Resourcing Where There Is Potential For Diverse Talent’
“I started my career in the industry a few decades ago and I’ve realized there’s really no prescribed academic background that determines if someone will or will not be successful in this industry,” Dixon said. "There are so many different disciplines and sub-disciplines of jobs and careers that can utilize your talent even if they may be very different than your academic pedigree."
With that in mind, especially when hiring graduates straight out of college, she said companies must keep in mind that firstly, students of color may not have the same exposure to real estate, and secondly, students graduating from business school may have everything they need — but for a sense of the industry that a good candidate could pick up quickly with the right guidance and mentorship — to excel in a CRE role.
"The 'pipeline' question is often manifested through: 'We have a job offering out there, and it doesn't seem as though any people of color or Black people have applied for it.'"
In this case, she said, there is the tendency for CRE to default to sourcing from places that hiring parties are already familiar with: their own networks or alma maters.
“There are disciplines in the industry that have historically done very well at filling openings through internal recommendations, which tend to perpetuate a very homogeneous talent pool,” she said. “So, I look at this as, ‘If you keep doing this the same way over and over again, you get the same results.’”
In other words, the pipeline problem may be more an issue with a company’s talent pool than with the world at large.
But, she added, the problem is certainly deeper than nepotism: “I do see a lack of resourcing where there is potential for diverse talent,” she said.
While few to no historically black colleges and universities have dedicated real estate programs, many do have very solid business schools, Dixon said. Because CRE draws on such a diversity of skill sets and academic backgrounds, companies that seek diverse candidates may do well starting with these programs.
Meanwhile, Roosevelt is not an HBCU, but it ranks among the top 15% of higher education institutions in the U.S. for diversity, and Dixon is working through marketing and partnerships to further increase diversity in its undergraduate- and graduate-level real estate programs.
Virtual Recruiting Is A Barrier
"Recruitment is an interesting effort right now. The whole idea of companies regularly showing themselves at career fairs at multiple programs around the country that could attract talent is not really what I’m seeing happen," she said.
Instead, she said, students in her programs become aware of opportunities because of her own preexisting relationships with firms who reach out to her directly about available roles.
"We have been fortunate to create some very solid relationships with the major global firms — CBRE, JLL, Cushman & Wakefield and Colliers — and we’ve got students who graduate from the program at all of those firms."
Otherwise, she said, the whole process is moving online.
Even before the coronavirus pandemic, virtual career fairs were a growing trend. Dixon said she saw companies increasingly axing their in-person, roving recruiting teams — the teams who would show up to job fairs and talk to students one-on-one about opportunities and about the industry.
And as the coronavirus pandemic forces everything that can be remote to be remote, recruiters showing up in person on campus will be even more of a rarity.
“So much of [recruitment] now is digital and virtual engagement," she said. "A lot of the initial contact is through platforms like Handshake. Companies post their openings, people apply directly, and it goes from there.”
That may not be enough for companies that are serious about prioritizing diversity in their recruiting and hiring. "I do think that for firms who decide they’re going to broaden the attempt, there needs to be the personal outreach to some of these new college platforms to build that awareness," she said.
Familiarity With The Industry Is A Barrier
"The other problem we have is the limited awareness in Black and communities of color in this industry about this industry, and about the skill sets that can be very successful in this industry,” Dixon said.
“How do you get into those industries? What are those roles? What kinds of career paths are there? What kind of skill set do you need as a broker versus as a property manager? What is a property manager?” Dixon said. “That complexity is also a barrier.”
There are a number of programs cropping up to help address this and to pique the interest of more young talent from more diverse backgrounds in general.
For example, in 2019, the Urban Land Institute launched its Foundations of Real Estate online certificate course to a pilot audience of more than 100 students pursuing studies as varied as economics, sociology, geography, psychology, humanities, and political science at Colgate University.
According to Colgate Assistant Vice President for Career Initiatives Teresa Olsen, many initially approached the experience with the assumption that real estate is about "putting up a building and then being done."
Via ULI's FoRE program, they learned that, rather, it involves "creating a community and thinking about the ethical and social impacts of what you will create," Olsen said in a ULI news release. "Our students were surprised to learn that real estate could be an arena in which one can address social issues or sustainability challenges or find a ‘green’ career."
She added that there will always be students who are drawn to brokerage and investments, but using the course as an introduction to the industry helped Colgate students "conceptualize a different career path involving real estate, to see real estate as a way to connect all their other professional ambitions.”
The barrier applies to any young person unfamiliar with CRE, but it disproportionately affects students of color. “It’s the repetition of the historical model," Dixon said.
"Young white people often see this industry through relationships with their families," while students who don’t come from families that are already involved in commercial real estate "often don’t understand the industry well enough to understand if this would want to be a role they would want to do, anyway."
There’s a fix for that, but it is not a quick one: "You have to bring this knowledge — this exposure — to young people when they first start thinking of what they want to do," she said.
Marshall Bennett has offered a graduate real estate program for 20 years, but just in 2018, it launched its undergraduate program, in hopes of addressing this problem.
There is more yet to be done.
The Earlier, The Better
"Roosevelt is an incredibly diverse university. It has really prided itself on providing education across a very diverse universe of students," she said.
"One thing I notice that has been challenging is I’ve got a decent pool of students in my undergraduate program, but still they are predominantly white."
Despite nearly doubling the higher education industry average in ethnic diversity with 87% of Roosevelt students coming from diverse backgrounds, these proportions still are not reflected in the real estate program.
"We haven’t spent a lot of time engaging on the high school level," she said. "We’ve got to figure out quickly how to expand the industry’s outreach into high school programs, especially."
The past two years, the school had up to 50 students enrolled across its undergraduate and graduate programs, Dixon said.
“I’m really happy about the momentum we’re getting, but I am still trying to find the right combination of efforts to get in front of young people,” she said, and to reach and inspire students who might not have considered a career in real estate otherwise.