Coping with the Shortage of Young Talent in the Real Estate Industry
We are facing a talent crunch in the real estate industry. Speaker after speaker at NAIOP's development '06 conference in San Francisco last October thought so and Rick Gillham, president, Gillham, Golbeck and Associates, Inc., Dallas, Texas, a real estate search firm, concurred.
According to Gillham, the most obvious reason has to do with the age shift in the working population. Predictions from the U.S. Bureau of Labor Statistics indicate that large numbers of the baby boom generation, which accounts for about 60 percent of the workforce between the ages of 25 and 54, will retire over this and the next decade--and the next generation of workers is too small to replace them. Specifically, by 2015 there may be 10 million more jobs than people to fill them.
The real estate industry is already seeing a shortage of talent-particularly among people with three to 12 years of experience in commercial real estate. Reasons vary according to the industry segment.
Here is Gillham's assessment:
- Accounting and some real estate finance personnel are scarce today partly because of changes in degree requirements. As of the late 1990s, eligibility to sit for the CPA exam required a master's degree in accounting, for those who were not grandfathered under the prior requirements. Accredited colleges and universities began to phase out bachelor's degree programs in this major. As a result, many students elected to obtain alternative business degrees and pursue the glamour of dot.com companies in IT, marketing or analysis where the compensation was higher.
- Subsequent to 9/11/01, as the economy slowed down, real estate was also significantly affected. This limited the number of talented young people being recruited into more transactional areas, like development and brokerage roles. Real estate companies have never been aggressive about college recruiting or formal training, and since there were few new positions available, a limited number of people entered real estate at that time and are now coming up through the ranks.
- Operational personnel are scarce for other reasons. Schools do not specifically teach the skills required to operate today's projects. The multiple disciplines involved must be learned on the job, for the most part. There are "seasoned" people in this industry segment, but it is not an easy field for novices to enter. Training takes time, money and commitment by property management employers, where profit margins are already thin.
What can be done about the growing shortage in the real estate talent pool? Gillham noted that keeping the boomer generation in the work force for a while longer will help in the short term. However, real estate -elated companies will need to market the advantages of entering the real estate field, actively recruit from colleges and institute their own training programs to employ the best and brightest in the future. Once young talent is on board, these individuals must be offered the chance for professional development, fair compensation and excellent supervision-or they will seek and find other opportunities.
For more information: www.realestatejobs.com
To post your commercial real estate job opening, visit the NAIOP Job Bank. Pricing packages are available for multiple postings. Employers receive $25 off when they place a job listing through the NAIOP Web site.
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