April 27, 2016
By Kent Elliott
In this edition of The Hiring Squad, Kent Elliott, principal of RETS Associates, a leading national real estate recruiting firm, shares hiring and compensations trends in commercial real estate that evolved over the first quarter of 2016.
Just as property investments have continued to increase, the cost of acquiring and retaining talent has skyrocketed, which has resulted in sticker shock for some companies. In one instance, a West Coast firm seeking an asset manager expected to pay a salary in line with its current employees, but discovered that competitive salaries had grown by $30,000 to $40,000 beyond that level. They had to bring in someone at a much higher compensation – and of course that created its own problem. Ultimately, they gave raises to all their star performers.
Entering 2016, demand continues at the same feverish pace seen last year, causing compensation to rise for new and existing employees.
During the past three years, compensation packages have increased an average of 15% to 25%, and in tighter, more competitive markets like San Francisco, they have spiked by 40%
Several factors driving the remarkable increases:
- Low unemployment at all positions in the commercial real estate field. A or B players are fully employed and bring bargaining strength to the table.
- Less new talent is entering the commercial real estate industry.
- Interim or temporary positions are slow to fill because most CRE professionals are employed; often the temporary staff are booked 30 to 60 days ahead.
- The current, most active positions are in Asset Management, Construction/Project Management, Financial Analysis and, of course, the field property level positions.
For Q1 2016, RETS has seen the following trends emerge:
- Recruiting remains strong, with open searches unchanged from 2015
- Northern California represents 50% of the open searches
- Asset Management roles are in the greatest demand, as are Financial Analyst positions.