At its heart, a company that embraces diversity, equity and inclusion is one that welcomes people from all walks of life without fear or favor. While the real estate industry has made great strides in improving diversity across all disciplines, there is still plenty of work to be done.

Data from surveyors’ institution RICS shows that qualified female professionals make up only 18 percent of the UK’s built and natural environment workforce, although that is up from just 5 percent in 1990. Similarly, only 1.2 percent of people working in the built environment in the country identify as Black, Asian or minority ethnic, compared to 14 percent of the wider population.

Few disagree that hiring people from different backgrounds, ethnicities and genders is a good principle from an ethical and moral point of view, but there is increasing evidence to suggest that teams made up of a wide variety of individuals actually improve business outcomes.

“We have found that a diverse workforce demonstrates its benefits through boosting employee engagement and happiness and improving employee retention,” explains Ghislaine West, associate director at Foundation Recruitment, which places people in jobs across the real estate sector. “It also helps drive innovation, increase productivity and helps achieve superior financial results.”

Her thoughts are borne out by a report published by management consultancy McKinsey & Company in 2020 which analyzed the performance of more than 1,000 companies and compared it to their diversity statistics. It found that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile.

Despite this, more than a third of the companies in its data set had no women at all on their executive teams.

In the case of ethnic and cultural diversity, it reported that top quartile companies outperformed those in the fourth quartile by 36 percent in profitability. Businesses are increasingly alive to this disparity.

Good for business

Natasha Soobramanie, vice-president of equity, diversity and inclusion at BentallGreenOak, believes hiring a more diverse team helps the business bring on and retain the best people. She says: “We know that in this market that is so highly talent-competitive, where people are starting to really center their own personal values in the employer that they choose and the work that they choose to do, that we need to live up to those expectations.

“We know teams that are diverse are more resilient and they make better decisions. Through the pandemic, many of the organizations that already had a focus on diversity were able to pivot more quickly and function more successfully because they already had so many of the necessities built into their infrastructure to operate in a covid environment.”

The catalyst for many of the changes the company has put in place originated from the merger of Bentall Kennedy and GreenOak in 2019, she explains. That moment provided an opportunity to assess the merged firm’s priorities, with DE&I built into its corporate values.

Soobramanie says: “We also came out pretty early with some specific metrics around how we wanted to see diversity through our hiring, and it is a bit of a cliché, but what gets measured gets managed.”

Having a workforce made up of people from different backgrounds and cultures can also help colleagues relate more effectively to a varied client base. Sonny Kalsi, co-chief executive of BentallGreenOak, goes further, suggesting that without a diverse team, the company would fail to engage properly with the businesses and individuals it comes into contact with.

“We invest in fast-growing, cosmopolitan markets where our tenants and the markets they serve are often even more diverse,” he says. “Diverse teams at BGO bring a wider breadth of understanding to the factors that make our buildings places of choice for businesses and families.

“Having a blind spot to these factors due to a lack of diverse analysts, researchers, asset managers and decision- makers is simply bad for business.”

Similarly, for Devin Glenn, global head of diversity, equity and inclusion at Blackstone, diverse and inclusive teams are a crucial part of how the company builds value for its shareholders. “We know that inviting new voices and different experiences to the table expands your vision and can help you identify new markets and opportunities,” she says.

Fresh perspectives

Blackstone’s Future Women Leaders Program and the Diverse Leaders Program introduce first and second-year university students to finance and the firm through seminars, technical training, networking events and mentorship, for example.

Glenn says: “Within the firm, half of our primary businesses have a diverse professional as one of their top two leaders and approximately one-third of our leadership team is diverse.”

Companies have a variety of ways of tackling the diversity shortfall in the wider industry. For example, Brookfield Asset Management has set up a number of networks to connect less-represented groups and give them learning opportunities and a sense of community, which it says improves the overall work culture. These include a women’s network, Brookfield Pride for LGBTQ+ employees, and networks for Black and Asian employees.

A Brookfield spokesperson says: “We understand that diversity needs to be a shared responsibility which starts with strong leadership at the top, which is why our senior leaders take an active role in encouraging diversity and supporting our progress.

“This approach is aligned with our collaborative culture, long-term focus and provides for a more dynamic and interesting work environment that attracts and retains top talent.”

But its commitment to creating this more diverse environment extends beyond its own team.

In 2021, Brookfield’s real estate group launched Partner to Empower, a program designed to support Black and minority business owners who want to open and maintain successful brick-and-mortar stores in its retail locations, with the ambition of making those locations reflective of the diversity of the communities in which they operate.

The program provides two types of support: financial support and resources to provide guidance and networks. The company has committed $25 million to this scheme over the next five years, which will be used to support the build-out and merchandising of physical retail stores. All of this is part of building a diverse ‘ecosystem,’ which ultimately benefits everyone, the company explains.

Real change

There has been much debate in the past about whether setting quotas for diversity hiring is unfair or biased in its own right, but Glenn suggests that Blackstone’s success in this area has been helped by setting distinct targets. “The best way to improve diversity is to set goals, create actionable programs and measure progress,” she says.

“Metrics inform our processes for talent and recruitment, showing us where we are getting it right and where we can continue to improve. We set a target of at least one-third diverse representation on portfolio company boards for new control investments in the US and Europe and we also launched a program to create career opportunities across our portfolio for people from underserved communities.”

This has helped drive incremental change, she says, enabling the company to double the percentage of women in its analyst class globally between 2014 and 2021. Almost half of its 2021 US analyst class was racially diverse. Progress has been helped by broadening the number of universities and programs it recruits from.

At BentallGreenOak, hiring a diverse workforce starts from the job advert, explains Soobramanie: “We want to think about what we can do to make the hiring process that much more inclusive, whether that is the language in our job descriptions, or enabling the managers making those people and talent decisions more bias-free in their approach.”

As well as bringing people in from outside, the company wants to make sure it is holding onto the diverse talent it does have by offering them a fulfilling career path. “We are thinking right now about what we can be doing during promotion and compensation season,” she says.

Kalsi agrees: “We want to be asking: can we help them grow, can we cultivate them and help them reach more senior levels, so that they are not just represented at the entry level positions or the mid-level positions, but that we have got a really diverse senior team.”

Despite good progress, the real estate industry still has plenty of work to do in order to build truly diverse workplaces.

“I’d say that one of the barriers in any efforts to progress a work force can be the lack of buy-in from the senior leadership team,” West says. “If the importance of DE&I isn’t advocated from the top, often due to other contending priorities, this naturally trickles down and, likewise, when the initiatives and changes are led from the top, people naturally follow and understand its importance.

“A company needs to live and breathe its values in everything it does. The commercial real estate market has traditionally been male dominated and in the current climate we have a fantastic opportunity to counter this and deliver a talented, equal and diverse future workforce.”

Kalsi is cautiously optimistic about the future. He compares the changes in DE&I work to the progress made in climate change.

“I believe where we are from a DE&I perspective is now in a similar place to where we were with the environment seven or eight or nine years ago, but I think it is going to move much faster,” he says.

“I feel good about it, but I won’t really be happy till I see the data that shows that we, and the industry more broadly, are doing better.”