According to a 2021 survey by recruiter Ferguson Partners and a number of industry associations, women now represent 15 percent of executive positions in real estate investment management, up from 12 percent in 2016. Meanwhile, minorities – both male and female – also represent 15 percent of those in executive positions today, up from just 10 percent. And, promisingly, 30 percent of senior level professionals are now women.
“There isn’t a company out there that I am aware of that isn’t looking at DE&I as a priority,” says Victoria Robinson, partner and head of workforce strategy and culture at services firm PwC.
So, as the DE&I conversation advances, what will the future look like for commercial real estate? Here are three key trends to watch.
Using DE&I as a strategy for success
It is no secret that having a variety of different skill sets will make a company better equipped to handle adversity and therefore be more profitable.
Research from consultant McKinsey & Company in 2019 revealed 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 – up from 21 percent in 2017 and 15 percent in 2014.
The report also found that in terms of ethnic and cultural diversity, top-quartile companies outperformed those in the bottom by 36 percent in profitability.
Natasha Soobramanie, vice-president of equity, diversity and inclusion at BentallGreenOak, says: “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.”
Jeffrey Marcus, global head of people for CBRE Investment Management’s real estate business, agrees that diversity is a tool for success, but warns that unconscious bias can hinder a DE&I agenda: “My core belief is that our differences make us stronger and with all elements of diversity we have to be very alert to the unconscious biases that can creep into decision-making.
“This is true at every point in the talent process, but particularly in recruitment. The objective must be to take this through to a senior level, but it is easiest to start at a junior level and build from there.”
Mentoring diverse talent
Mentoring programs can be a way to retain diverse talent and ensure those from minority groups reach more senior levels. Data from the Harvard Business Review shows that mentoring programs boost the representation of Black, Hispanic and Asian-American women, as well as Hispanic and Asian-American men, by 9 percent to 24 percent.
Sophie van Oosterom, who leads Schroders Capital’s real estate team, notes that her firm is in favor of reaching out to new pools of talent to diversify its hiring. “We are involved in a number of projects that exist to attract diverse talent into the industry at junior level. That may be through apprenticeships or offering work experience to people who may not otherwise be aware of the opportunities on offer.”
During the pandemic, commercial real estate services firm Avison Young introduced an internal mentoring program focused on DE&I. Joan Skelton, the firm’s global director of diversity and inclusion, says: “The mentoring program also helped us retain our employees. We saw a decrease in turnover and increased retention in 2021 that was attributable, at least in part, to this mentoring program.”
Real estate firm Hines is another major player to develop its own mentorship program. Darnell Jones, global director of diversity, equity and inclusion, adds: “We know that a lot of times it is who you know and can learn from that really matters in terms of how well you progress, so it is very important to put more women and underrepresented minorities in front of the people that matter at the firm through these mentorships.”
Dan Winters, senior director at ESG performance benchmarking organization GRESB, agrees that managers are prioritizing DE&I through various schemes and initiatives: “Fund managers are rapidly advancing formal DE&I programs in an effort to retain and attract top talent. Interestingly, Asia has the highest ratio of female senior executives at 32 percent, followed by North America at 25 percent, with the EU lagging at 16 percent.”
Reaching into the community
Firms have a duty to offer support to their employees. This is an idea that was emphasized amid the pandemic. LaSalle Investment Management’s global head of human resources, Darline Scelzo, argues that covid has made people take more notice of company culture in order to decide whether it is the right fit for them.
“We saw lots of concerns that were interrelated,” says Scelzo. “People cared about not just their own experiences within the organization, but also wanted to know what we are doing in our communities.”
Creating networking groups or programs designed to build a sense of community and offer guidance to employees can be one way to ensure a positive company culture.
Scelzo adds that creating this culture can also have a positive impact on the wider community: “[We] really took on the social aspects of ESG and we are starting to see clients asking us, as owners of the building, to help them organize and drive community-type events. They are also asking about the programs that we use for DE&I.
“So, we are investing in helping the tenants of these buildings in our portfolio become more effective at community connection, taking a page out of the ‘culture of care’ playbook; showing them how we do it and helping them take it forward.”