The U.S. economy has enjoyed a record expansion cycle, having eclipsed in 2018 the 1990-2000 prior record surge. So, as commercial real estate navigates a choppy top-of-the-cycle period, recruitment and retention continue to be foremost priorities for companies across the industry.
How are company leaders and boards attracting talent amid change?
Whether executed internally or externally by a search firm, recruiting is largely a marketing campaign where you must identify the strengths and selling points of your firm, the role, the team and the intangibles, and make certain those benefits are clearly and effectively articulated to prospective candidates.
In our work helping both large and small real estate firms, we’ve found the following key attributes are essential for attracting top tier candidates:
Company Strength and Differentiation
How well capitalized is the client firm? In light of the level of current capitalization, will it be viewed by candidates as a stable to growing enterprise? Savvy candidates will research and analyze the ownership structure to determine the primary source(s) and type(s) of investment capital, along with the amount of corporate-level and property-level debt, financial performance and other relevant factors. Stability and opportunity for future growth both matter.
Committed, Engaged Executive Leadership
Stable leadership matters to those candidates who are evaluating the opportunity to join a firm, as well as those folks who are already there. A constant barrage of leadership changes and endless procession of re-organizations signal that certain elements exist at the company that may present challenges or impediments to good career longevity. While excessive turnover presents the obvious challenges to recruiting top talent, however, conversely, the presence of executive leadership teams that have been together and in place for too long suggests there may be either slow or limited upside potential to ascending to higher levels of responsibility and reward.
A Gold-Standard Reputation
Generally, the most highly regarded firms attract and secure the best talent. Everyone wants to work for firms that are “best-of-breed” in reputation, performance and culture.
For example, we see a clear difference when conducting a search for a well-recognized and respected firm versus one that is less well known or has weathered some sort of storm. The bottom line is that we spend less time on “selling” a highly respected firm as an attractive opportunity, whether it’s reflected in awards for leadership, business success or workplace or whether it’s simply a well-earned reputation from a long and successful track record. Not every client we represent has a successful story to tell, but those firms that look to retool themselves by hiring fresh talent may be viewed as a perfect fit for the executive who seeks a long-term opportunity to make a real difference within a firm.
Salary matters but perhaps not as much as you may think. During candidate interviews, it is rare to discuss compensation beyond either what the candidate currently earns or has earned in their most recent position, or what he/she might expect to earn in their next position. Once a job offer occurs, however, typically, deals are not made or broken over compensation as long as fair market compensation packages are offered. However, top talent in all functional areas of the real estate industry expects a small increase over current cash compensation plus a small equity stake in either the company or in transactions, which is seen as assurance that they will benefit from the upside he/she creates, at least partially, through their good efforts. The best candidates want to know “if I help you make money then I will make money.”
Intangibles, Made Tangible
As elementary as it might sound, every candidate or current employee has a set of intangibles which affect the way they feel about a role. Employers should ask, “What is it about the role, the culture and the team that will motivate a top-notch professional to jump out of his/her bed each day and be eager to come to work here?” Identifying and infusing these intangibles into your company culture is a sure way to attract and retain the best talent.
As real estate firms endeavor to continue to attract best in leadership for the current and next business cycle, it will also continue to be important for those firms to identify their best strengths and selling points and incorporate them into hiring strategies. A best-practices approach in this regard makes the difference in achieving positive outcomes to both hiring and retention.
Bill Whitlow is a partner with Terra Search Partners in their Washington DC office. San Francisco-based Terra Search Partners is an executive search firm focused exclusively on the real estate business.