Data Science Will Be CRE's Next Hiring Wave
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Rudin Management Chief Operating Officer John Gilbert knows he is facing an uphill climb when it comes to hiring for the firm’s technology company, Prescriptive Data.
“Within the field of data science right now, you can go and work for Google and try to refine algorithms and measure how impactful advertising is,” he said. “It’s hard to compete wage wise.”
Prescriptive Data created Nantum, an intelligent, mobile, machine-learning system that integrates all building operations using prescriptive and predictive analytics. What Gilbert banks on to staff the company is offering data scientists something many crave: a fresh, complex challenge.
“The opportunities are new and raw because no one has really explored this," he said. "The type of work and the built environment, it’s a huge marketplace ... You can come and work for Prescriptive Data where you are really beginning to solve humanistic and society’s problems."
Data and technology are reshaping the way commercial real estate companies are building, planning and marketing their businesses. Now, the big challenge for these companies is hiring the people who can help them do that. Finding smarter, faster and cheaper ways of doing business and leveraging data to make more efficient choices is fast becoming a top priority for real estate companies around the world.
It’s big business too. Venture capital firms dropped $12.6B on real estate tech firms in 2017, a huge spike from the $4.2B invested in those types of offerings the year before. It is a fast-moving game, and it means hiring and recruiting the right people can be particularly challenging.
“Data is the new oil … it’s going to power everything that we do,” Silverstein Properties Chief Information Officer Sandy Jacolow said.
He pointed to new concepts like figuring out how many people open an email to creating facial recognition in the lobbies of buildings.
“The key part is getting people that understand the data scientist aspects and be able to understand the business side," he said.
Silverstein looks for the right people through the usual channels of networking and LinkedIn, but its recruiters also go to events like the Real Estate Board of New York’s PropTech hackathon and work to develop relationships with the colleges that are producing the sort of talent they want and need.
In some ways, he said, it is important to adapt company culture to be appealing to the demographic with the needed skill set.
“They want remote access and flexible hours," Jacolow said. "They want to be able to have their snacks.”
But while recruiting is key, Jacolow said Silverstein is also working to mentor and grow talent from within the company. Programming is one of the few jobs a computer cannot be taught to do, so the firm sent members of the application team — who he said already had strong business acumen — to coding classes to develop their abilities for the company.
One project Silverstein is working on, Senior Applications Analyst Denise McDonald said, is analyzing data to examine the return on investment for renovations at the firm's luxury rental building, Riverplace.
“It’s trial and error, there are a lot training materials, and the on-demand training materials work the best,” McDonald said of developing her data abilities within the company. She took coding classes last fall, and combining that with the business knowledge makes sure data analysis is being used in a helpful way. “[You need to ask] the right questions that the user doesn’t even think of."
Looking outside the traditional commercial real estate sphere for new hires will be crucial to getting ahead. Cushman & Wakefield Chief Information Officer of the Americas Melanie Kirkwood Ruiz is proof.
Appointed to the role in November, Kirkwood Ruiz has spent most of the last decade working in the tech and gaming industries, but she jumped to commercial real estate because she saw enormous opportunities to have an impact.
She believes it is important to hire more technical business analysts, technical program managers and people who come from the innovation and emerging tech world. Those will generally be people who are progressive and younger, recent college graduates who are “thirsty” and into technology, she said. But she echoed Gilbert's sentiment that a job offer is not enough.
“They have to be incentivized, people who are in tech don’t think about commercial real estate. I had the same issue,” she said.“You have to find people that are driven by the opportunity … [it will help that] I have a network of people that trust me.”
As technology and data take a greater hold on the industry, there has been growing concern that some jobs will become obsolete. In the residential brokerage world, the increasing use of digital lead generation and the growing number of online platforms have sparked concerns that agents will be cut out of the picture altogether.
Still, many argue the relationships-driven world of real estate is too complex to see brokers’ jobs cut out completely.
Aaron Block, the co-founder and managing director of MetaProp NYC, an accelerator dedicated to growing startups focused on commercial real estate, said there is no denying there is a “fundamental shift” happening with jobs across the real estate industry.
“The are entire layers of middle management [to be] wiped out … coordinators, people taking information or reports and repackaging it,” Block said.
He added that it may seem like things are happening quickly, but it is no different than what has happened in industries like financial services or education: Members of senior management will be closer than ever before to the front lines of the customer experience.
“Anyone’s whose job involves a lot of paper or Microsoft Word, filing, monitoring, reading meters, inspecting, classifying, observing — these are the types of jobs that will have change and people will have to move up the value chain in order to survive," he said.