Almost two years after the onset of The Great Resignation, the commercial real estate (CRE) industry still faces the effects of ongoing labor shortages. During this 2-year period, each CRE market segment, from industrial development and construction to property management and financial analysis, has been impacted by the record-breaking number of job resignations.
The sudden nationwide departure of talent can be credited to recent market shifts, stagnant wages, lack of advancement, employee disengagement, poor work culture, and financial uncertainty, among many other factors. Regardless of employees’ reasons for leaving, research shows that the labor shortage currently affects about 70% of all commercial real estate firms.
The labor shortage, though challenging to navigate, has brought light to the need for innovative, forward-thinking strategies to attract and retain talent. The Great Resignation has further exposed another ongoing challenge in CRE: technology. While many industries have readily adopted technology, commercial real estate has been historically slow to embrace new tools, processes, and systems. However, post-pandemic and with evolving workforce expectations, technology is no longer a luxury – it’s a necessity for CRE firms who want to win the war on talent.
The Historic Relationship Between CRE and Technology
For years, the commercial real estate industry has thrived solely on personal connections and manual processes. As a result, many CRE professionals have a “if it’s not broken, don’t fix it” mentality, which has contributed to the industry-wide skepticism towards technology.
Today, 68% of asset management executives say their firms are resistant to adopting new technologies. Many firms do not view technology as an integrated part of the business. Instead, they consider it a backup tool to be used only when deemed necessary. But tech is becoming increasingly necessary in order to effectively adapt to market shifts and, now, to attract top talent. Thus, the industry’s hesitation concerning technology has only made the recent talent shortage harder to conquer.
One expert predicts that the Great Resignation will last for approximately eight years, due to the cyclical effect, i.e. not ending anytime soon. As it continues, many firms are being pushed away from outdated processes and strict cultures and towards technology-driven and flexible work environments – both of which appeal to modern work culture.
The Great Resignation’s Impact on CRE
In commercial real estate, firms are experiencing difficulties with filling open positions while keeping current employees happy and satisfied enough to stay. Before the pandemic, organizations could likely attract candidates without adjusting to meet the workforces’ demands. However, The Great Resignation has led to more than 11 million job openings in the United States – or nearly two open roles for every available worker. Essentially, the overwhelming exodus of workers has created pressure for employers and recruiters. This situation also means that jobseekers have the upper hand and are using this knowledge to negotiate their salaries and benefits and find the best career opportunities.
So what does this mean for CRE? The Great Resignation is just one of the industry shifts that has made technology adoption a requirement that commercial real estate firms can no longer ignore. Without tech, it’s nearly impossible to operate at peak efficiency. Additionally, access to high-quality tech solutions minimizes manual processes and enables employees to devote more time to value-add activities, making their jobs more meaningful and rewarding.
The Great Resignation’s impact on commercial real estate can be felt in both talent acquisition and employee retention:
In today’s job market, candidates are highly selective and are not settling for just any company or position. According to a recent Bisnow survey, 65% of commercial real estate hiring managers and HR executives report difficulties in finding the right candidate. As the labor market tightens, finding and bringing commercial real estate talent onboard will continue to be a challenge.
Employee turnover rates have also skyrocketed as a result of The Great Resignation. Believe it or not, 44% of your organization is looking for a new job; so, it’s critical that you prioritize your team’s happiness and job satisfaction. Studies prove that when employees are valued, respected, and heard, both productivity and work quality improve while turnover decreases. In fact, 79% of employees leave their jobs due to lack of recognition. Employees, especially those from younger generations, are also looking for jobs that enable them to do meaningful work – not just manual, repetitive tasks.
Embracing Technology and Flexibility for a Competitive Future
The job-resignation trend is predicted to continue well into 2023, meaning there is no time to slow down or become complacent in the quest for talent. The commercial real estate firms that will successfully navigate today’s unusual job market have two things in common – technology and a solid plan.
Hiring and retention have never been easy, but today’s labor market has increased the level of difficulty. Jobseekers have more opportunities than ever before, especially with the rise of remote job opportunities. Because digital innovation has transformed the demands of the modern workforce, organizations must embrace and invest in the technology and flexibility that workers, specifically Millennials and Generation Z, desire to be competitive.
Here’s how your firm can embrace technology and flexibility for a competitive edge in both talent acquisition and employee retention:
An organization’s tech stack can be a critical factor when it comes to both attracting and retaining talent. A Microsoft survey found that 9 out of 10 Millennial workers consider the tech stack when choosing a workplace and over 40% would leave a company because of inadequate technology.
Today, professionals seek employers who can provide access to modern solutions that allow them to perform their jobs better and more efficiently. CRE business leaders need to evaluate each new solution they use to determine if it is right for their business. Consider whether a platform or tool simplifies daily execution, streamlines workload, boosts communication, and helps reduce employee turnover.
Post-pandemic, flexible work schedules are the norm; thus, winning the war on talent requires most firms to invest in new benefits and create new policies. For modern talent, a remote work environment and flexible schedules are highly desirable. A recent survey by Future Forum reported that 95% of employees prefer the ability to create their own schedules and 78% of employees want to choose where they work. A cloud-based platform such as Lobby CRE enables team mates to work from anywhere at anytime, simplifies collaboration in a hybrid world, and ensures data security.
Technology is a major aspect of the employee experience. Commercial real estate organizations that embrace technology and promote flexible work environments will be well-equipped to survive The Great Resignation.
Read Digital Transformation Is Revolutionizing the Commercial Real Estate Industry to learn about how technology is shifting the CRE industry as we know it.