Achieving Pay Parity in Commercial Real Estate

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A recent white paper from Commercial Real Estate Women (CREW) Network entitled Achieving Pay Parity in Commercial Real Estate compiled data about lasting pay disparity between men and women in the U.S., as well as data about the benefits of a gender diverse leadership team and strategies for closing the gender pay gap.

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The recent white paper cites a study from the American Association of University Women (AAUW) that showed full-time working women in the U.S. were paid 20 percent less than men as of 2016. Furthermore, “At the rate of change between 1960 and 2016, women were expected to reach pay equity with men in 2059—but progress has slowed in recent years. If the current level of growth continues, AAUW warns that women may not reach pay equity with men until 2119.”

A CREW Network 2015 benchmark study report entitled Women in Commercial Real Estate stated that within the commercial real estate industry, “the industry median annual compensation for women was $115,000 USD compared to $150,000 for men—an average income gap of 23.3%.”

That benchmark study, which summarizes a survey of the CREW membership, is performed every five years. Although the 2015 survey showed that the gender pay gap has decreased since the initial release of CREW Network’s benchmark study in 2005, “it persists and is strongest for respondents earning less than $100,000 and above $250,000.”

Additionally, the 2015 study found that “only 28% of women aspire to the C-suite versus 40% of men.” Most respondents felt that having a mentor or sponsor within their company was important for advancement, but “women in the industry are 54% less likely than men to have a sponsor who can provide career advice or help advance a career path.”

Furthermore, Commercial real estate recruitment and staffing firm RETS Associates’ 2018 Women in CRE Survey found that almost two-thirds of women did not take action after being bypassed for a job, assignment or listing.

Benefits of a gender-diverse leadership team

The recent CREW Network white paper, completed in late 2018, states that “companies with gender diverse upper management outperform homogeneous companies in return on investment, and they carry less debt. Where women account for the majority of top management, businesses show superior sales growth and higher cash flow returns on investment.”

The paper cited a study from international financial institute Credit Suisse showing that organizations where women account for 50 percent or more of senior management have “outperformed less gender equal firms each year since 2009.”

The World Economic Forum’s (WEF) Global Gender Gap Report 2017 offered complementary data, saying, “sales per worker are 6% higher for every 10% increase in the share of women in the workforce, and the value added per worker increases by approximately 8%.”

The 2018 CREW Network white paper also cited a PwC global study that showed gender diversity aids in recruitment of women, an increasingly important advantage considering the majority of college graduates now are women.

Within commercial real estate, real estate investment trusts (REITs) may be leading the charge, naming a record number of women to board positions in 2018, with 49 women filling the spots of 94 REIT directors, according to reporting from The Wall Street Journal.

Additionally, The World Economic Forum’s (WEF) Global Gender Gap Report 2017 examined data from LinkedIn to conclude “the legal, finance, and real estate industries have all increased the rate at which they hire women for leadership over the past decade.”

Closing the gender pay gap

CREW’s 2018 white paper called out a recently-conducted survey by executive coaching firm Challenger, Grey & Christmas of 150 human resource executives, which found that “nearly half were reviewing their compensation policies in light of the current social movements.”

The paper also cited pay data software company PayScale’s suggestion that one reason the gender pay gap happens “is because women ask for raises less frequently than men, which has a cumulative effect as women progress in their careers.”

The white paper goes on to point out, “According to the 2015 CREW Network benchmark study, men in the commercial real estate C-suite earn 29.8% more than women at the same level. If executive level men and women are negotiating their salaries equally, this may indicate women are starting from lower offers and basing negotiations on salary history rather than their skills, abilities, and experience.”

Sixty-two percent of respondents to a 2016 CREW Network white paper survey believe that “pay would be more equitable in commercial real estate if employers were required to share compensation information.”

As part of CREW’s mission to support and educate women in commercial real estate, chapters around the country and world, including CREW San Diego, implement programs to level the playing field. These include member benefits like education and leadership seminars, dynamic networking events and member-to-member referral programs. Also, through CREW Careers and UCREW, members work with students to help develop their career aspirations. More than just tracking progress, CREW is making progress happen.

Lauren Slatinsky is the 2019 CREW San Diego President. The views expressed here are the author’s own and not that of ALM’s Real Estate Media Group.