REAL ESTATE NEWS

CRE firms that want to get the best out of their employees can do better by intensifying their focus on how they recruit, retain and develop their staff, according to a new survey-based report from NAIOP Research Foundation.

That includes extending their search beyond hiring experienced professionals and devoting more attention to new associates, said NAIOP, the Commercial Real Estate Development Association. "Nothing is more important to a firm's long-term success than investing in and retaining talent," said president and CEO Marc Selvitelli. It can be difficult for firms to prioritize training and recruitment amidst the pressure of revenue-generating activities like closing deals, he noted, but failing to do so limits a firm's ability to shape its workforce to meet strategic objectives.

Based on respondents' comments, the survey found commonalities among firms that successfully recruit new associates. "They invest in recruiting in a manner befitting its strategic importance, craft hiring plans with organizational objectives in mind, and avoid letting convenience dictate how they look for talent."

This includes figuring out what human resources they need to achieve their objectives over a five to 10-year span. It also means diversifying their recruitment channels to include not just graduates of college real estate programs, but also those pursuing degrees in other fields like architecture, business, engineering, construction management and urban planning, along with business administration and finance. Sources at trade associations can also be valuable.

Recruitment is just the start. Indeed, the report stated, firms' long-term success may depend on their ability to train employees to take on increasingly complex tasks and to grow professionally, including familiarizing them with organizational hierarchies. Such training may be of an informal or formal nature, though relatively few respondents mentioned formal training programs within their firms.

"The process of developing a training program was purported to yield insights into a firm's core values, desired employee behaviors and prospects for long-term success," the report noted. "Particularly in small and medium-sized firms, respondents reported a tendency on the part of executives to dismiss training programs extending beyond orientations as resource-intensive luxuries. This prevented investment in formal training, leaving a gap in the systematic development of new associates' skills," the report found.

Informal training could take the form of shadowing senior personnel – the most common type. It could also involve assigning new associates low-risk, recurrent tasks that encourage self-guided learning.

"Training is not a one-size-fits-all enterprise," the report stated. "The optimal combination of formal and informal methods is likely to depend on a firm's size, resources and culture." But it found training is least likely to be effective when it is withheld as a kind of "trial-by-fire" for new associates or gives them too little autonomy to identify what interests them.

Ongoing training through graduate programs that a firm may pay for or executive education programs may also be useful.

The report also discussed how respondents evaluate new associates' performance. While most respondents rely on annual or semi-annual performance evaluations, others are moving away from this approach because of administrative or assessment drawbacks. Instead, many are switching to continuous performance evaluation that involves ongoing, two-way communication, with frequent, informal check-ins designed to keep new associates on track.

They also enable supervisors to see whether training initiatives are working. Respondents also addressed how best to retain employees. "Retention strategies can be nuanced but appear to generally involve paying employees competitively, planning for their professional growth, promoting them according to those plans, providing them with adequate resources, and remembering they are people, not just employees," the report stated.

"Respondents were quick to acknowledge that employee retention starts with compensation. Helping employees understand how compensation decisions are made was said to go a long way toward addressing perceived inequities. Well-rounded approaches to compensation were described as striking a balance between pay, meaningful work and career development opportunities."

Mentorship was identified as playing a vital role in employee retention. Use of advanced technology was also important. "Proptech, climate tech and design-build tech are all now part of the real estate development lexicon. Respondents recognized this trend by calling on firms to use emerging technologies as a means of empowering and retaining their top performers." A high-quality office physical environment was also important. "Respondents stated that office space can serve both as a recruiting and a retention tool in a world where employees increasingly expect modern design, mixed-use settings and resort-style amenities in their place of business," the report noted.

Finally, firms were advised to consider their missions. "[Employees] may be motivated by financial benefits, job titles, work assignments that align with their social values, or a host of other things. Respondents called on firms to operate in ways that authentically embrace the missions and values that attracted employees to their organizations in the first place," NAIOP counseled.

Other skills may soon be in demand, as well, as firms work out the potential of AI.

Blackstone,for example, has suggested that generative AI could improve dealmaking by letting analysts quickly work through data to evaluate deals.

And at least one program, Project Destined, is working with high school and college students to provide training, mentoring, and job placement in the CRE industry.

Source: GlobeSt/ALM