The solution to the potential shortage is tapping talent from Generation Y, the 46.7 million people born between 1982 and 1993. That means re-focusing company practices to bring them in greater alignment with the values of the incoming workers. "To successfully recruit members of Generation Y, real estate companies must develop and communicate their vision and differentiate themselves from their competition. Based on Gen Y's interests, companies should promote their sound values, technologically advanced workplaces and global scope," they note.
Chicago-based FPL Advisory Group predicts most real estate firms will be hiring this year, despite fallout from the credit crunch. The outlook is particularly strong in the commercial sector, perhaps in anticipation of the imminent talent shortage.
About two-thirds of senior US real estate executives responding to FPL's annual hiring and compensation survey state they expect to add staff in 2008, says Bill Ferguson, FPL's co-chairman and co-CEO. The number jumps to 75% among just those who self identify as commercial ownership/services firms, while 5% plan to scale back. Ferguson says double-digit pay raises are becoming less common, although most respondents expect pay levels to increase at least moderately industry-wide.
Considering the well-publicized problems in the debt markets and generalized concern over the health of the economy, Ferguson concedes the healthy hiring outlook seems counterintuitive. However, he notes that strong underlying fundamentals and the continued availability of large amounts of equity capital are keeping hiring levels robust. "One of our clients has seen its stock price drop 40% in the last two months, but the underlying business is still good. They're still hiring," he says.
The challenge for the real estate industry is finding new ways to attract talent, especially Gen Y. Deloitte & Touche says there are several issues for real estate firms to consider. Generation Y, more than earlier generations, values flexibility and work/life balance. They want:
- Long-term career development and multiple experiences within a single organization
- A sense of purpose and meaning in the work
- Availability and access to mentors and other company champions
- Tech-savvy work environment
- Social networks that embrace open/honest communication
FPL reports that CRE firms are putting heavy emphasis on people and positions aimed at enhancing the core value of their operations. Top objectives include asset/portfolio management and property management functions. However, there still is significant demand for talent to support acquisitions, development and other growth functions.
"Historically, when the industry hits hard times, you see a pull-back in demand for acquisitions talent and a renewed focus on asset and portfolio management. This time around, supply and demand are generally in balance, there's a ton of equity capital seeking deployment, and globalization is fueling growth," he says.
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