As most industry veterans will admit, the roots of the real estate profession are profoundly “old school,” characterized by a reliance on longstanding networks and relationships, an aversion to new technologies and a marked deference to industry veterans. But as Baby Boomers begin to retire en masse and new technological solutions become seemingly unavoidable, real estate professionals are in for several major paradigm shifts. Remember, old habits die hard.
Perhaps one of the most significant challenges facing the industry is the inability to attract and secure young talent on a long-term basis. This, of course, isn’t a recent trend. With the abundance of firmly established lifelong real estate veterans with 20, 30 or even 40 years of experience under their belt, fresh-out-of-school employees are often left with the proverbial scraps, forced to jump from opportunity to opportunity in hopes of grasping the next rung on the career ladder.
In years past, there may have been some macroeconomic explanations for the transience of our youngest real estate professionals. The market downturn in 2008 dragged hiring to a screeching halt, and low-level employees might have been considered superfluous or unaffordable. Plus, Millennials’ reported typical abandonment of company loyalty in favor of personal aggrandizement didn’t help their cause.
However, such a cynical justification is unlikely to spur change (let alone grow one’s practice), and in fact, the data does not back it up. In the past year — as the real estate market has rebounded in earnest — employee retention in the profession has sunk to an alarming level. According to Nobscot Corp., a global HR technology company that specializes in retention management and development, the turnover in the real estate industry was 40.6 percent. For context, the rate throughout all professions in the Northeast was a much lower 32.4 percent.
Clearly, it’s past time that real estate executives reassess their strategies for internal talent development. If there’s a widely held notion that the next generation of professionals has a diminished sense of loyalty, perhaps we should ask why.
After decades of success with the Old Guard, so to speak, many traditional real estate firms simply do not have the mechanisms in place to effectively harness junior-level talent. Without a clear company-wide objective for promoting from within, it’s far too easy to lean heavily on longstanding employees without an effective internal growth plan.
At GFI, we have enacted a variety of initiatives to actively promote growth from the ground up while attracting educated and driven young professionals, based on several core business principles:
- Tap into higher educational institutions: Proactively targeting educated real estate prospects can reap long-term rewards. Targeting events such as Virginia Tech University’s Property Management Fair and New York University’s real estate seminars can begin to foster a long-lasting dialogue with talented young professionals.
- Embrace new communication methods: As aforementioned, today’s real estate space tends to lack a robust online and social media presence. The upcoming generation of professionals not only embraces sites like Twitter, Facebook and LinkedIn, they often rely on the sites as the primary professional networking tools. Neglecting online communications could mean missing out on today’s top technology-driven real estate talent.
- Set up a structure for retention and promotion: At GFI, we target a 75 percent internal promotion rate for our property management practice, actively developing and mentoring our pipeline of young leaders. Recently, GFI Management Services implemented the A.S.P.I.R.E. Awards (A Successful Performance Inspires Renewed Energy), a program designed to reward and recognize performance, and we’ve seen the benefit both in morale and overall customer experience.
- Encourage a sensible work-life balance: The real estate industry rewards hard work – that’s no secret. However, the round-the-clock, often commission-based nature of the business far too often leads to employee burn-out. It’s up to top-level executives to create a culture that supports going above and beyond while encouraging a rational level of personal time.
For real estate firms—traditionally predicated on trust, industry experience and interpersonal relationships—handing the keys over to a new generation may well be a jarring concept. But, while some companies remain steeped in these traditions, others are finding new ways to cultivate young talent for the long-term health of their business. These progressive initiatives aren’t simply noise— they’re a competitive advantage.
