The CRE Talent War Is Escalating
Companies are shifting compensation plans and recruitment strategies as the CRE talent war escalates. Since the downturn in 2020, the commercial real estate industry has bounced back, albeit amidst a shortage in qualified talent that has seen rising salaries and restructured expectations.
The Talent Shortage
The labor shortage has extended to the commercial real estate (CRE) industry, and companies are facing the reality that it will likely escalate in 2022. Already, approximately half of CRE companies report hiring challenges have impacted their company moderately or severely, according to a recent CPE 100 survey.
In the same survey, approximately half of industry leaders reported frustration with the available talent pool, stating it is adequate for some searches but inadequate for others. Additionally, a full 25% of respondents said the talent pool simply doesn’t have what they need for their job openings in commercial real estate.
As a result, many companies have been forced to shift recruitment policies over the past year or more to be more flexible and diverse in their expectations. As more and more openings chase fewer and fewer qualified professionals, the CRE talent war escalates.
Rising Compensation Expected to Continue
Professionals in all CRE roles can expect salaries and compensation packages to continue rising. Talent is at a premium, and firms must reset their expectations to stay competitive. Nearly 90% of real estate firms offered merit bonuses in 2021. Attracting CRE rockstars is requiring companies to change their work environments, as well as role expectations and pay.
One way firms are changing their expectations is in the area of diversity in hiring. It’s becoming more and more apparent that companies want to hire diverse candidates, yet those candidates come at a premium, simply because they’re hard to find. Likewise, approximately half of CRE companies are changing their talent management plans to attract younger talent.
Meanwhile, overall, salaries have yet to flatline. It is likely that companies will continue to adjust to the CRE talent war, raising salaries throughout 2022. A new trend in the CRE space is for hiring companies to offer equity, even to lower-level positions to make them more competitive.
Countering the Shortage
Creative strategies are called for to counter the shortage. Companies that allow for more remote-work flexibility and an enhanced focus on work-life balance will attract a larger pool of job prospects. Competitive CRE firms are also renewing their push for higher retention levels among existing employees. Those who recruit from within, ask for employee referrals, and actively leverage personal networks, both online and in person, will have a competitive edge.
However, while in-house HR teams and hiring efforts can still have some success, successfully sourcing from a shrinking pool in these highly competitive times requires an edge. And maintaining a working relationship with a proven CRE recruiter is a proven tactic for companies to combat this talent shortage.
Some of the key advantages of going with a professional headhunting firm include:
Trust and confidentiality
Help with role structuring
Better talent access
Repeated hiring success
With the CRE talent shortage on the rise, short-term solutions won’t do. Competitive firms in the commercial real estate space are looking to the future with the assumption that the talent shortage won’t resolve in the near future. With long-term flexibility and strategic planning, future unknowns will pose less of a challenge.