- Who We Serve
There is no going back. The commercial real estate industry has fervently embraced technology and integrated digital tools into daily business operations—and year after year, the industry continues to advance technology adoption. This year, JP Morgan Chase highlighted proptech as a solution to inflation, rising interest rates, and the labor shortage, and Deloitte said commercial real estate companies were prioritizing technology as a tool to innovate and improve efficiency. In the last three years, technology has become a pillar in the commercial real estate business.
Technology adoption, however, is not a layer atop standard business operations. It’s a game-changer, transforming the entirety of an organization, from workplace strategy to recruiting and staffing. To leverage the complete benefits of a digitally supported enterprise, professional talent, and hiring practices must also transform. With accelerated technology adoption, the need to restructure talent is more urgent than ever before. Commercial real estate investors and developers should make these three considerations as they rethink the team dynamic in favor of a truly digitized workplace.
Adopt Alternative Talent Models
A diverse professional team is essential to properly integrating and utilizing new technologies. However, a report from Deloitte called CRE talent structure “archaic.” To begin, the industry has a high median age. Nearly half of employees are over the age of 55; however, across all industries, workers over the age of 55 account for only 24% of the talent pool. In addition, only 4% of CRE industry professionals are aged 19 to 24. To put this into perspective, for every Gen Z employee hired, the same firm hires three Baby Boomer employees. When talent is concentrated in one age demographic, expertise, knowledge, and strategy is skewed toward that group. When the age demographic is older, as it is in CRE, processes and innovation can evolve at a slower pace or stall altogether. This is one reason for the industry’s early hesitancy to embrace technology.
Outdated job roles are the primary symptom of this problem. Job titles and responsibilities must evolve alongside digitization and automation. The right technology infrastructure will reduce low-value, repetitive administrative tasks. Northspyre clients have reduced administrative work by as much as 70%. As such, companies must adjust professional roles and team structure to reflect the changes in workflows and responsibilities. As a Deloitte report on talent adaptation in the CRE industry explained, “As responsibilities shift, the skills and qualifications needed for each role are expected to evolve, too. At a minimum, each role would require technology or analytics coursework, for example, a bachelor’s degree or certification in big data or real estate analytics. In addition, employees will need to excel at soft skills such as critical thinking, problem-solving, communication, presentation, and relationship building.”
Deloitte has a series of models to demonstrate how typical roles should evolve. Leasing agents, for example, will use predictive analytics to identify opportunities for lease optimization and improve building management through the use of building sensor data. Valuation advisors will use AI-assisted valuation models and alternative data sets to deliver deeper insights into current and future valuation trends.
And development project managers will use management software like Northspyre to gain better control over the lifecycle of a development project by using a combination of predictive analytics and automation to achieve targeted outcomes and deliver projects on time and on budget.
Adapt Talent Recruitment
Hiring the right professionals is critical to adapting teams to meet digitally supported operations. Companies must target professionals fluent in technology and eager to adopt new software tools. Unfortunately, CRE companies have not integrated technology acumen into standard job descriptions, instead prioritizing traditional skills and job functions. In open job applications, REITs and brokerage companies only list advanced data and analytic skills in 1% and 3% of jobs—and private CRE companies typically lag behind industry leaders.
These numbers are grim, and yet, in a survey from Ernst & Young, 53% of CRE firms said that they lack the proper in-house talent to successfully adopt technology. New hiring processes can change that. To ensure professional talent is compatible with the company’s technology infrastructure, CRE companies must recognize the importance of tech expertise across job functions and seek applicants with the appropriate skills.
Interestingly, many companies have increased the pace of technology adoption to attract employees. Ryan Hartsell, Managing Partner at Oxford Partners and former president of SIOR’s Independent Brokerage Group, said that recruiting and retaining talented brokers was a major challenge for the industry. New brokers entering the industry are looking for “automated and tech-focused systems,” according to Hartsell, and brokerage firms offering robust technology will have a competitive advantage. If companies are investing in technology to attract workers, it makes sense to also seek the professional that will benefit most from it.
Align Progressive Workplace Strategies
The good news is that commercial real estate companies are already transforming the recruitment process. In the last three years, a commitment to diversity and inclusion has taken hold in the industry. In fact, a survey of major CRE organizations found that 94% of companies have adopted DEI initiatives to transform corporate culture, professional talent, and talent recruitment. In addition, companies are improving workplace wellness practices to support employee mental health and improve work-life balance.
Likewise, technology should permeate throughout an organization’s culture, with an emphasis on learning and employee experience. Companies can align progressive hiring practices to create a strong and well-rounded workforce that benefits from diversity, diverse experience, and future-proof skill sets.
While updating the recruitment process is an important aspect of crafting a progressive workplace strategy, existing employees need not be left behind. Instead, reskilling and upskilling existing roles and training and educating employees on new technologies is an important node of tech talent transformation. As Deloitte research notes, companies should “develop a strategic learning road map, revamp existing training curricula, redefine expectations and skills, and develop effective measurement criteria.”
Commercial real estate was one of the last industries to enter the digital world and understand the enormous benefits of technology adoption. To truly reap those benefits, companies must now transform their workforce by redefining roles, modernizing talent recruitment, and retraining existing employees. The industry is only at the beginning of its digital transformation. By taking these steps, companies will advance toward a bright future.
Want to learn more about how to secure the best talent in the industry for your development projects? Download our white paper, How Real Estate Developers Can Recruit Top Project Managers, for tips you won’t find anywhere else.
Tag(s): Real Estate Technology
Other posts you might be interested inView All Posts
April 14, 2022
Real Estate Development
Which Commercial Real Estate Project Types are Hot Right Now?Continue Reading
February 14, 2023
Real Estate Development
Three Key Trends Shaping the 2023 Retail Real Estate MarketContinue Reading
January 11, 2022
Real Estate Development