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NYC Pay Transparency Law Offers Glimpse Into What CRE Pros Are — Or Aren't — Making

New York City’s new pay transparency act had a shaky rollout and met with criticism from many in the business community, but it also touched off a wave of CRE professionals eager to find out how their paychecks stack up and arm themselves for compensation negotiations.

This new access to compensation information is part of a growing movement in the U.S. and reflects a shift away from the old notion that the very subject of pay is taboo, offering a glimpse into how others are paid and potentially contributing to a talent shakeup in CRE and beyond.

“Candidates seem to be on a fact-finding mission to ensure their compensation is in line,” said Building Careers President Carly Glova, who heads a recruiting firm focused on CRE. “They have been reaching out to us in droves, not necessarily with the intent to move positions, but with regards to their market compensation. Many are taking the initiative to have those conversations with their supervisors before getting to the point of a counteroffer." 

A new pay transparency law in New York City will likely impact CRE salaries.

With some of the largest markets in the country, including California and Washington, soon to be under such rules, and an effort by advocates to increase pay equity, it’s likely firms nationwide will see this as an evolving part of job posting, recruitment and, especially in early days, retention.

“It’s coming down the pike,” CRE Recruiting founder Allison Weiss said. Her firm has already made all of their positions in New York state compliant to the new standard.

A handful of companies and industry groups with large presences in New York City responded to Bisnow’s inquiries about the pay transparency act: Savills had no comment, REBNY said it wasn’t the best source of information, and CBRE said “we are in compliance with the New York City salary transparency law." JLL, Rudin Management and Colliers didn’t respond to inquiries by press time. 

A review of CBRE postings for jobs in New York City on Nov. 7 found some positions, such as Fund Portfolio Manager, including a salary range of $150K to $170K and an explanation of potential bonus compensation, while others, such as Workplace Experience Coordinator, initially didn’t include any salary or pay information. After being contacted by Bisnow, CBRE has updated its NYC listings.

On JLL’s website, seven of 10 New York City job postings include salary information, including a vice president position that simply lists compensation as based on commission. Salary information was spotty for open positions at Savills, while Marcus & Millchap didn’t appear to list any such information on a dozen open listings (a spokesman responded that the firm is “actively working on it and will of course comply.”)

The law, which went into effect on Nov. 1 after a six-month postponement, mandates that firms of four employees or more — covering a third of employers and 90% of workers, per the state Department of Labor — include a good faith salary range in every job posting. Violations can be anonymously reported to the Commission on Human Rights in New York City, and businesses then have 30 days to fix it. Those who don’t can face civil penalties of up to $250K for each violation. 

Partnership for New York City CEO Kathryn Wilde, whose group has pushed back against the law in the past, told The Wall Street Journal that members of her business group are “either resigned or enthusiastic or something in between.”

The goal, according to its authors, is to increase pay equity over time, especially for women and people of color, ultimately leveling the field and avoiding liability and lawsuits later on. The National Women’s Law Center found women still make 83 cents for every dollar their male colleagues make, and according to the National Partnership for Women and Families, that figure is 64 cents for Black women, 54 cents for Latina women and just 51 cents for Native American women.

CREW, a group dedicated to promoting women in CRE, found in a 2022 survey that equal pay assessments were identified as the most critical thing companies can do to advance gender equity at work.

Many firms are bracing for uncomfortable conversations, as employees realize they are underpaid compared to their colleagues. Contributing factors to these imbalances include seniority, being hired during the challenging pandemic labor market (which one study found benefited in-demand female executives), traditional biases and a propensity for many women and people of color to ask for lower salaries than their White, male counterparts during the hiring process. 

Weiss believes that most of the bigger CRE firms are waiting to see if the law is actually enforced. 

“Compliance will only be driven by how much of this is enforced and how afraid companies are of that enforcement,” she said.

The law will make salaries for new jobs more transparent, but it could create retention issues.

But the impacts on commercial real estate, which like many industries, relies on headhunters such as Weiss and private searches for executive talent, and often makes bonuses a substantial part of compensation, may be more complicated. Brokers, for instance, have long had a primarily bonus-based compensation structure, which can favor those with connections and experience and lead to wide disparities, especially for new hires.

Rob Gilman, a partner at Anchin, a firm that does consulting for large commercial real estate companies, said there’s going to be significant friction at first, as employees see salary ranges from job posts and realize they’re underpaid, or find competitors offering better pay than their firms.

“Do I believe there will be people switching jobs from companies that need to increase their pay?” he said. “Yes, I do.”

Lisa Flicker, Jackson Lucas partner and head of real estate, said firms are worried about being “the first ones to get caught,” but they’re also talking about altering compensation and hiring practices. Many firms across industries are expected to sidestep the law by outsourcing more hiring.

Weiss noted that some of the shortfalls of the rule include the stipulation to include good-faith salary ranges, a term that many companies have loosely defined. Some of the listings Flicker has seen for broker positions have ranges up to $150K, making it less than apparent where a specific candidate may fall within the spectrum (a widely mocked Citibank posting in the early days of the rollout listed a job as having a “$0 to $2M” salary range).

Gilman believes that, going forward, there’s going to be a lot of creative language around bonus structures, especially for broker roles and others that rely on commission, seeking to explain to job seekers that while the base pay is low, high performers can see exceptional rewards.

The real potential of the law, Flicker said, is if firms do abide by realistic, helpful salary ranges, which will enable candidates to tailor their search to firms and compensation they want and feel they deserve.

“The job search process is an emotional meat grinder, so anything that we can do to save people from that kind of experience is good,” she added.

This new complication for companies looking for talent may make some smaller CRE firms and family businesses lean more toward consultants and firms that can handle talent searches, Flicker said. Larger brokerages have the staff and resources to figure out salaries and pay structures, but smaller firms may not and, wanting to avoid fines, may hire consultants and therefore be less transparent. A survey by the Society for Human Resource Management found large firms already routinely conduct pay audits, while less than half of small companies follow suit.

In addition, larger firms may be able to list salaries more aggressively, Jackson Lucas Managing Partner Chris Papa said, making applicants overlook gigs at smaller firms, who will struggle with standardizing hiring and salaries when their pay system was more ad hoc to begin with. It may simply lead to smaller firms seeking to hire consultants to handle hiring. 

“This is going to hurt smaller firms,” he said.

Many HR and hiring experts have said such a rule will have a kind of retroactive impact on current salaries, as existing staff will compare their pay against what’s being offered to new hires. This again could hurt smaller firms, which likely lack the resources to match pay discrepancies, which may drive some talent elsewhere once they get a better sense of who’s getting paid what. 

A similar law was introduced in Colorado at the beginning of 2021, focused in large part on remote work and guaranteeing even compensation. Initial corporate reaction was unfavorable, with many postings for remote positions specifically excluding Colorado residents (as one website tracked). But more importantly for the long-term impact of these rules, the number of total fines levied for those violating the statute have been low, just three as of this July, underscoring the need for enforcement to uphold the law’s larger purpose. 

At the same time, a similar effort to make it illegal for hiring firms to ask about a candidate’s past salaries also started in New York and California and has now been widely adopted, with supporting legislation in approximately half the states.

This current economic climate might actually make compliance easier, Weiss noted, since there will likely be less hiring. CBRE, for example, announced $400M of cost cuts including job losses, while JLL announced cost reductions, but didn’t specify if there will be job cuts. But it also may be imposing extra costs that could impact smaller firms, Flicker said.

“​​It feels like companies are working hard to hold on to their talent right now,” she said. “I feel like it's going to be a tough time to take the hit. Because I think what companies are going to now have to do is pay somebody to interpret the law for them. And then they're gonna have to figure out how this affects their strategy.” 

UPDATE, NOV. 9, 10:40 A.M. ET: This story has been updated to reflect CBRE's changes to its job postings.