The commercial real estate industry faces an era of exciting revitalization. But a pivot will be necessary in order to take advantage of it.
A variety of interrelated factors—demographic ideals, changing workplace expectations, and the lingering effects of the Great Recession—has meant the industry has found it difficult to recruit young employees in recent years.
The 2015 NAIOP Commercial Real Estate Compensation Survey found that 77 percent of real estate firms are having trouble hiring young, new talent. And according to the latest census data, the average age of a commercial real estate professional in the United States is 51, underscoring the severity of the upcoming talent shortage. As the baby boomer generation retires, more millennials enter careers, and urbanization focuses on new development, commercial brokerages will need to adapt to changing trends and demographics.
Finding new strategies for replenishing the industry’s talent gap is the most immediate issue. However, at least one recent industry survey indicates that few millennials aspire to work in commercial real estate. Here’s what industry leaders can do to attract a new generation of enterprising young talent in order to improve the current hiring trends.
1. Leverage New Technology
One way commercial brokerages can attract younger employees is to offer them new tech tools.
- Digitize: Using modern tools such as business apps, internet portfolios, functional employee interface websites, and remote mobile technologies can help sustain productivity, client communication, and customer satisfaction. A 2014 Pew Research Center study reports that 46 percent of online workers feel they become more productive with digital tools. The report also mentions that more than half of internet-using workers say such assets increase the number of people they communicate with each day, and 35 percent of workers say the tools influence them to work more hours.
- Create mobility: Mobile technologies and apps allow millennial workers to access work resources from anywhere. If an agent needs to provide information to a client, they can quickly access it via a web-based platform on a mobile device. A study from the University of Southern California and London Business School reveals that most millennials want the opportunity to travel and work remotely. Commercial real estate can capitalize on a far-reaching market by making this a smoother process.
- Implement leading-edge technologies: Virtual reality will soon impact many lifestyle sectors. In fact, a recent analysis from Goldman Sachs indicates that by 2025, virtual and augmented reality software will be a $2.6 billion market in the real estate sector. Commercial real estate companies can implement virtual tours or simulations of neighborhoods where clients are interested in buying homes. Real Estate Tech News reports that we’ll see a wave of new tech in listing and search services, marketplaces, tech-enabled brokerage, leasing-management software, data valuation and analytics, mortgage technology, investment, and property management. Being ahead of the curve on implementing new tools like virtual reality will help the industry attract younger workers and clients.
2. Promote Purpose and Workplace Culture
Many millennials strive to align their professional work and their personal values, which offers a challenge and opportunity for employers seeking to attract younger workers. A Deloitte University study shows that millennials desire to work for employers with ethics that benefit society. A Gallup study confirms that one way commercial real estate firms can offer intrinsic value to their workforce is by promoting purpose and motivation through workplace culture.
A simple way to inspire and motivate millennial workers is to offer supportive and healthy workplace environments, which should include these elements:
- Purpose beyond profit: Brokers can gain loyalty and motivation from young recruits if they offer an ethical purpose that benefits their employees and society at large. For example, focusing on the future of green energy and sustainable design in real estate will likely draw fresh minds to the industry, especially because sustainability is a priority of the millennial generation.
- Mentorship: Offer support to new recruits. If they are having trouble parsing real estate analytics or need to learn new skills, offer them advice and anecdotes that will inspire questions and thoughts. When you foster a supportive work environment, millennials are more responsive and more eager to do well. Six in 10 millennials are currently benefiting from having somebody who offers them advice or helps them develop their leadership skills. This varies by market and appears more prevalent in emerging (67%) rather than mature (52%) economies.
- Development opportunities: Offer ways for new recruits to learn on the job. Whether it’s working through a sales pitch or practicing a mock tour, helping new recruits become confident is necessary to sustaining company morale. Take time to invest in new agents. Gallup finds career progression is important to the 88 percent of this demographic and PwC notes they are eager to develop learning capabilities. Offering opportunities for further education can help millennials feel more grounded in traditional real estate industry practices.
- Steady practices. Finally, consistency is as important as any other millennial retention strategy. Inconsistent corporate policies yield an inconsistent workplace culture—which younger employees may interpret as insincere.
3. Offer Healthy Work-Life Balance
Independent contractors will be an increasingly important demographic for the future, and that puts the real estate at an advantage. But commercial brokers need to understand how they can address the needs of millennials seeking flexible work schedules while still meeting the needs of the company. The long-term goals of millennials are more traditional than you might expect. PwC’s research finds they plan to own homes, have a stable partner in life, and strive for the financial success that allows them to save for a comfortable retirement. When evaluating job opportunities, millennials’ first need is a good work-life balance.
Flexible schedules and remote work can help satiate the lifestyle appetites of new recruits. A 2016 Deloitte report finds while 75 percent of millennial workers either frequently work remotely or would like to start doing so, just 43 percent of them are able to do so. More than half of the survey respondents say productivity will increase if people are allowed to work from home more often. Provide days when agents can work remotely with new technology or give them the opportunity to work during the hours when they feel they can be the most productive. Communicate with new recruits to negotiate a schedule that works for everyone.
Millennials are dramatically changing our notions of work and company culture. By 2020, the generation will comprise half of the global workforce. Because millennials bring a lot of talent and technological ability to the table, commercial real estate companies must adopt new and improved technology, structures, and strategies. These factors will not only attract millennials to a new field but also create incentives for them to grow within the real estate industry. Winning the game of attracting young talent will be a key competitive advantage for commercial real estate firms that are leaders in the industry.