Commercial real estate’s archaic practices are turning the next generation of talent away, and unless the sector starts thinking strategically about the way it combines people and technology, it risks becoming irrelevant to talented workers.
Not only are available jobs unappealing, but the skills, culture and existing working practices of current CRE employees are outdated, according to a new report by Deloitte. Unless the sector starts to use technology to create modern-day processes fast, young people will pursue a career elsewhere.
“I think the gap between commercial real estate and other sectors is growing, not shrinking,” Deloitte Consulting U.S. Real Estate Consulting Leader John D’Angelo said. “An interesting thing is that there does seem to be an increase in awareness of the gap and that something needs to be done, but an unawareness about what to do and how urgent it is.”
The solution? The sector needs to pursue both talent and digital transformation, using technology to create the roles that today’s young people seek, Deloitte said. Traditional roles should be out, replaced by “a hybrid human-machine combination” and a working environment that appeals to all ages. The result could be more efficient businesses and staff able to make more informed, effective decisions. And thanks to the global pandemic, the evolution is going to happen even faster than predicted, like it or not.
What Current Recruits Look Like
Deloitte’s review of recently collected data highlights CRE’s reliance on older employees. In 2019, 45% of employees were aged 55 or older, compared to 4% aged 19-24. In comparison, only 24% of the banking and insurance workforce is aged 55 or older, according to the Bureau of Labor Statistics. Recent hires also still rely on recruits from older age groups.
For this to change, the sector needs to evolve hiring and operational processes. More than 31% of real estate respondents to Deloitte’s 2020 Human Capital Trends survey indicated their companies had made “little to no progress in modernizing their HR processes, technology, and capabilities in the past 10 years.” Instead, they are using overly administrative processes and are unable to create “the desired employee experience,” respondents said.
“Naturally, the current cohort of workers has to be replaced with the next generation,” D’Angelo said. “But there is a different dynamic when hiring digital natives, finding ways to bring them into the industry and keep them in the industry. They have a lack of appetite for manual, repetitive work that can be automated. In parallel, the next generation of leadership is also coming, who thinks a bit differently about how work is done, how to organize people around collaboration and teams.”
Rather than hire for “traditional skills,” Deloitte’s report argued, firms need to consider recruiting for skills such as data analysis, software development and cloud computing. The global pandemic is likely to speed up commercial real estate’s talent evolution; Deloitte predicted roles could evolve by 2023 if not earlier, having previously estimated 2025. The coronavirus has “shone a light on process inefficiencies that you don’t necessarily see when people are in the same place,” D’Angelo said.
The Future Of CRE Jobs
To paint a picture of what a future, technology-enabled job in real estate could look like, Deloitte spelled out how several roles could become more automated, with more emphasis on analysis and insight generation. For example, right now a leasing manager manually enters and extracts lease data. By 2023, Deloitte said that “a leasing manager would manage integrated digital lease data using cloud-based software.” Similarly, today’s task of interpreting and sharing information using spreadsheets will turn into “use of predictive analytics to identify opportunities for lease optimization.”
“People need to see the value in rethinking processes, having analytics sit alongside human judgment,” D’Angelo said. “The industry needs to shift its continued focus on doing the same things that have always been done. We’re starting to see a change; skepticism is lifting.”
Across roles, Deloitte argued that use of technology will improve data accuracy, enhance efficiency, free up employee time, provide deeper, more forward-looking insights, mitigate risk and strengthen relationships with clients. Before panic sets in that the robots are coming to steal jobs, however, Deloitte emphasized that technology “could be a key enabler.”
“There are already tools and platforms that could be used and a wealth of things that could be learned from other industries,” D’Angelo said. “The issue is that any investment needs to be seen to make financial sense. Do we shift human effort to a higher value activity by finding ways to free up time? You need to have an element of intellectual curiosity about how you could free people’s time up.”
The Actions You Should Take Now
Deloitte listed several direct actions that companies could take. Firstly, access new skill sets by broadening recruitment. For example, consider tapping into the gig economy or using contractors. The report contains a whole section on digitalizing talent processes, with suggestions that range from the extreme (use virtual reality to advertise positions) to the mechanical (digitally store employee information and plot “talent analytics”).
No. 2 is to promote a culture of continuous learning, perhaps upskilling — or reskilling — existing employees. No. 3 also focuses on employee retention with a suggestion to “reimagine the employee experience” — namely, offer flexible working and other factors that appeal to younger workers such as more collaboration, greater agility and data-driven decision-making.
The last suggested step is to “blend in wellbeing and belonging initiatives.” Wellbeing has become a buzzword across industries in the last few years and the global pandemic has exacerbated the trend. Virtual work environments pose clear challenges to safeguarding employee wellbeing and a sense of belonging, but Deloitte argued that employers need to develop a hybrid work environment mixing office time and working at home.
For a traditional industry, embedded in networking and face-to-face contact, the concept of digitization might take time to take root across the sector. However, Deloitte’s message is clear: “being digital” is the only way to secure the talent needed for future success and relevance.