With Job Market Juiced For Workers, CRE Firms Should Focus On Retention
“That’s what the money’s for!” Companies have clearly moved past Don Draper’s reductive vision of how corporate motivation and compensation work. But in the midst of a significant, Covid-era upheaval in the market for talent, it’s career development, recognition, and yes, cold, hard, cash, that are driving an increased effort in commercial real estate to hold on to workers who are suddenly remote and re-evaluating options.
“Even before March 2020 and all the things that happened after, we were hitting a period where the unemployment rate was so low that these issues were already starting to happen,” said Kathleen Quinn Votaw, CEO of TalenTrust, a strategic recruiting and human capital consulting firm. “Covid has just exacerbated everything.”
The top three reasons employees leave a job are lack of recognition (which often includes compensation), problems with other people, and employee fit (the worker wasn’t the right person for the job), Votaw said.
None of these are necessarily new during the pandemic, which is why Votaw said the Covid era merely underscored and exposed the root issues management has with their workforce. Giving recognition and appreciation, it appears, is hard.
It has also exposed many issues in HR common across industries, and the broken recruiting, hiring and onboarding processes. A recent PwC study found 46% of women and 34% of men searching for jobs right now are citing compensation as a top issue. Clients who hold multiple rounds of interviews and hold a long, drawn-out interview process will lose out to more transparent, decisive and fast-moving companies.
“Because it was an employer-driven market, they started taking things for granted,” said Kathleen Duffy, president and CEO of Duffy Group Inc., an executive recruiting firm with expertise in recruiting research. “Now that the table has turned like we’ve never seen — I’ve been doing this for 30 years — the way candidates are in the driver’s seat.”
Within CRE, many of those susceptible to making moves and looking elsewhere may be those who are the most loyal, longest tenures, CRE Recruiting founder and principal Allison Weiss said. In an industry with lots of movement between firms, those who stay put are likely only receiving cost-of-living increases and perhaps a larger bump every few years with a promotion.
Early to mid-career CRE professionals are also likely to leave or be recruited by other firms, Weiss said; higher-ups are more tenured and risk-averse, while more junior employees are more likely to see the organizational chart full ahead of them, and react positively to news of a strong, pro-worker market. In addition, those with less stable, more transaction-based compensation, such as traditional brokerage, CRE-tech/proptech, office leasing or hospitality brokerage professionals, tend to be much more open to moves during market uncertainty.
“When I call someone who’s been at their company for more than three-to-five years, it’s extremely common that they’re at the very low end of the compensation range for their current role, unintentionally penalized for their loyalty to a company,” Weiss said. “When I let candidates know what market rate is, they often feel betrayed.”
What can companies do to respond to an unsettled labor pool and workforce? Weiss suggests CRE firms embark on a thorough review of both company sentiment — via a wide-ranging survey, holding listening sessions or utilizing employee sentiment analysis tools — as well as compensation, and erase glaring issues and inequities. It’s better to adjust compensation before another job offer forces you to counteroffer. In addition, the pandemic has reinforced the value of benefits and flexibility with where and when to work, especially for caregivers.
But that can be taken too far, said Breakthrough Properties Executive Vice President of Business Operations Susie Harboth said. She believes the hybrid model, with a deliberate focus on culture-building opportunities in the office, is a fundamentally sound strategy for CRE. Growing culture and loyalty are key, she said, and it also has so many second- and third-order effects.
Offering career growth and upskilling can also provide loyalty and stability during an uncertain time. Carly Glova, president of Building Careers, a commercial real estate talent firm, suggests firms consider devising employee investment plans that lay out things like career road maps, mentors, and company-supported education goals and timelines for staff.
“I think that it’s important for companies to better understand how this time has impacted their people, because for many, it has prioritized their lives,” Weiss said. “Companies have an opportunity to step up and be heroes right now, not just with compensation, but also with policies that protect employees and show appreciation for their contributions to the company.”