CRE Talent Crunch Has Meant Higher Pay And Better Benefits
The tumultuous last 18 months in commercial real estate has, like so many other industries, empowered workers during a talent shortage, pushing CRE firms to ramp up compensation and benefits in response.
“There's a real war for talent, and it's impacting the things we do," CBRE CEO Bob Sulentic said during an earnings call last week.
Many of the forces at play in the larger labor market, including pandemic-era burnout, the worker shortages and the so-called Great Resignation, have impacted CRE and the market for specific roles within the industry.
“There’s a push for a culture revolution within companies,” said Building Careers President Carly Glova, who heads a recruiting firm focused on executive CRE talent, and finds more candidates expecting expanded benefits that support better work-life balance, along with higher pay. “If I’m not immediately impressed by the numbers or growth opportunities or culture, I’m looking elsewhere.”
Many firms have struggled to fill starting-level positions and property management roles. Roughly 60% to 70% of all CRE firms face talent and recruitment challenges, according to CEL & Associates CEO Christopher Lee.
Existing issues with the talent pipeline are making it harder and slower to pivot during a period of flux, potentially weakening any recoveries. In response, companies are reassessing compensation packages to make sure their offers and benefits stand out and suggest they are making long-term investments in new hires.
“As a whole, commercial real estate hasn’t made employee benefits and culture a priority,” Glova said.
Firms are discovering the high costs of recruiting and replacing top talent, CRE Recruiting principal and founder Allison Weiss said, which can range from tens of thousands of dollars to twice someone’s annual salary.
“Extensive turnover can cause reputational or employer brand damage, loss of client relationships, and low morale among remaining team members shouldering the burden of additional work,” Weiss said.
Increased competition — especially for roles in in-demand sectors like industrial and life sciences and those that involve more technical knowledge or expertise with proptech — are pushing firms to offer more, CRE recruiting experts told Bisnow.
Glova said the fact that many developers are starting to reassess comp packages, going beyond leadership and management to offer bonuses and additional pay to positions across the board, suggests more competition is helping workers. She highlighted a San Diego-based firm, H.G. Fenton, that has prioritized a robust HR and benefits program for the past decade, with a lifestyle and culture team in place that focuses on employee satisfaction and retention.
“Salary increases have been dramatic,” she added. Now is the time of the year when annual bonuses are on the table, so firms are trying to be extra aggressive when recruiting, she added, to make sure new hires don’t merely come on board and then leave early in the year.
Glova said she is seeing great demand, and significant salary increases, for construction managers; one recent candidate saw a 20% increase in their compensation when they moved to another firm.
“Middle management is where most companies are hiring,” Glova said. “Salaries have gone up, but not to the same extent as executives. There’s a little more willingness to ramp up and train for these roles.”
Firms feel pressure to pay higher salaries to keep and retain talent, Keller Augusta Senior Managing Director Kaitlin Kincaid said. The recruiting firm’s recent survey found half of employees considering a career change.
There is also increasing demand for “jack-of-all-trade” roles, with job postings asking for more multifaceted talent, reflective of the more tech-focused nature of many jobs. There is heated competition among larger firms for proptech and data analysis and analyst roles, favoring younger talent and sales staff with more tech expertise.
To woo employees, firms are going beyond traditional benefits, incorporating wellness, mentorship and training opportunities, and mission-driven programs, Kincaid said. Firms are also open to recruiting outside of traditional avenues for high-demand roles, which may place them in competition with the compensation and benefits packages of other industries.
But there are limits to the industrywide benefits boost. For instance, expanded childcare is far from guaranteed, Glova said. While a norm is forming around a hybrid, three in-office days-per-week schedule, that increased flexibility still leaves some gaps for caregivers. According to research from CREW, workplace shifts have had a significant impact on female employment in CRE; while 38% of members of the national women’s real estate network felt the pandemic has stalled progress for women in the industry, 39% said they’ve seen better compensation.
“There is still a big delta between what employees want and what companies are willing to provide,” Glova said. “It’s closing, but there’s still a gap. Companies need to be more flexible with what they’re considering.”