The Hunt is On
- Jun 29, 2015
What a difference four years makes. In 2011, as the economy struggled to emerge from recession, 71 percent of real estate employers reported flat or reduced hiring plans, according to a survey conducted by Select Leaders, a job network website launched by Anthony LoPinto, global leader of Korn Ferry’s real estate practice. In a startling reversal, 73 percent of the 988 professionals surveyed expect to expand hiring in the coming year.
“I’ve been in the market for nearly 30 years, and this is the best job market for candidates in 20 years,” declared Michael Rosenblatt, president of The Quest Organization, a New York City-based executive search and consulting firm. “But if you’re hiring, it’s also one of the most difficult. The C-suite is always tricky, and the talent is few and far between.” What companies want from an executive today: leadership with authenticity; the ability to look ahead strategically and with vision; a penchant for collaboration and team building; and a global perspective.
Jennifer Ashley, global director of human resources for CBRE Group Inc.’s 55,000 employees, agrees. While there is a foundational platform of skills that is expected in the C-suite, leaders must also demonstrate adaptability and flexibility.
“We have many different types of individuals and five generations working for us now,” she said of CBRE. “You need to have a
proven ability to get things done and move the ball forward in a progressive environment.”
Craig Robinson, president of Colliers International USA, evaluates not only the IQ of a C-suite candidate but also that elusive quality of emotional intelligence. “You need to be able to understand and support different perspectives while ultimately bringing them into alignment with the company,” he explained. “The tricky thing, though, is that this skill set is hard to test for when recruiting.”
Increasingly significant is vision. “Focusing on dogma and the way things have been done in the past is a limiting factor,” he said. “A leader’s ability to be open to change, embrace that change, and ultimately bring a point of view or vision on where that change will take us is sometimes more important than being an ambassador for what we’ve always done.”
Potential recruits should also grasp the technological revolution underway in commercial real estate, and understand how best to put today’s new tools to work, Rosenblatt added. “Companies are looking for executors, as past performance is an indicator of future performance,” he said. “So have the ability to adapt to change, look to continuously improve processes and challenge everything you come across.”
Inevitably, the hunt for executive talent is being influenced by the real estate industry’s current wave of consolidation. In early May, DTZ and Cushman & Wakefield Inc. revealed plans to join forces in a deal valued at an estimated $2 billion. That announcement came on the heels of January’s merger of DTZ and Cassidy Turley, which operates under the DTZ name and has 28,200 employees. And last year, Savills plc and Studley Inc. formed Savills Studley in the United States, giving the combined companies access to more than 27,000 employees in 60 countries.
Among their other effects, these acquisitions noticeably shrink the pool of experienced C-suite veterans, Ashley noted. “It’s also much tougher to retain them,” she said. “There are a lot of companies in the market looking to buy talent that they don’t have and want to get—and they have the money to do so.”
That makes it crucial to keep executives happy to reduce the chances of temptation by recruiters or competitors. “The market has shifted to where the employee really has the power,” she said. “It’s not a buyer’s market anymore and we need to adjust to that.”
Robinson warned that companies that depend on buying talent are in danger of becoming victims of their own success. “Recruits who are always looking for that extra dollar are not the kind of people we’re looking for,” he said. “Instead, we seek those who fit our culture and want to grow professionally.” He’s found that executives are more focused on the upside and growth of a company and will place a bigger premium on longer-term opportunity than on short-term compensation.
Last year, Colliers hired about 1,000 professionals globally in client-facing positions, many of them in executive and key leadership positions. Robinson himself was recruited in April 2014 after serving as president of corporate services for the firm previously known as Cassidy Turley. What firms like Colliers sell every day is talent, expertise and insight, he said. “The good news for us is that today’s best talent is attracted to growth, wants to challenge the status quo and is progressive in how they think about client services,” he said.
In May, Colliers acquired CASE Commercial Real Estate Partners, a boutique firm based in Dallas, to bolster its presence in the city and supplement its operation in North Texas. That followed the April acquisition of Madison, Conn.-based Strategic Building Solutions, a move designed to expand Colliers’ project management expertise in the Northeast.
Paul Massey, president of New York investment sales for Cushman & Wakefield Inc., offered a telling observation last month during EisnerAmper and Real Estate Weekly’s Dealmakers Forum in Manhattan. The company he co-founded, Massey Knakal, was acquired by Cushman & Wakefield last December, and Knakal predicted that consolidation will continue. But he also noted that firms seeking growth and fresh talent reach a point where they can no longer move the needle exclusively though acquisition, whether of companies, teams or business lines.
Looking Beyond the Box
Though the most common source for real estate executives is the industry itself, talent can also come from elsewhere. “There are only so many players in a small pool, and at some point, you exhaust that pool,” Ashley said. “Bringing in executives from other industries adds a whole other perspective.”
For instance, in August 2013, CBRE hired chief information officer Mandy Edwards, who had spent much of her career at General Electric and at the telemarketing and outsourcing firm Sitel. That same month, it also hired Paul Suchman as chief marketing officer. He was previously a business-to-business marketing expert at advertising agency network BBDO Worldwide.
Colliers is also willing to take a chance on “rising star” leaders whose ideas, passion and leadership qualities more than compensate for a shortage of formal C-suite experience, Robinson said. That sometimes means bringing in someone from outside. Colliers executive managing director of workplace innovation and corporate solutions Keith Perske, who joined in February, was previously with Johnson & Johnson. Chief economist Andrew Nelson, on board since January, came from Deutsche Asset & Wealth Management.
While companies often consider candidates with non-real estate backgrounds, Rosenblatt recommended keeping perspective on the qualifications of outside recruits. A financial services executive is likely to grasp the dynamics of real estate dealmaking more quickly than someone making the transition from a consumer products company. He says his firm is also casting wider geographical nets for potential recruits.
One tool gaining more traction in the hiring world is the personality profile, which can help assess the credibility and fit of a candidate. “If you’re hiring a chief financial or investment officer and you discover they can’t handle their own personal finances, it’s a red flag,” Rosenblatt explained.
More participants are taking part in C-suite recruitment than in the past. Those contributing can range from board members and executive search specialists to accounting firms, Rosenblatt noted. Though these reinforcements expand the resources for the talent hunt, there is also at least one potential drawback: “It’s challenging to get everyone to agree.”
The Compensation Game
Compensation is frequently a game-changer when it comes to both hiring and retention. According to the 2015 “SelectLeaders Network Hiring Trends Survey Report,” traditional compensation—based on experience, location and individual performance—last year shifted to a greater focus on increased revenue production. Sixty-nine percent of respondents anticipate an increase in their total compensation in 2015; 56 percent received a year-end bonus entering 2014; and 53 percent saw a base-salary increase last year.
(For more survey results, see chart on page 26).
Ashley noted that CBRE offers the best possible balance of cash, equity and incentives. “But it’s more than just the dollar side of the equation,” she said. “For many executives, it’s about what they’re doing within the firm, how they’re doing, and how the company is moving them forward. The relationships our employees have with these C-suite executives are what creates stickiness and loyalty.”
While compensation is up, most firms are focusing on building performance-based perks like stock options, Rosenblatt added. “If the stock goes up, compensation goes up and there might even be bonuses, which makes sure that executives are aligned with the interests of the company.”
But good employees often get counter-offers, and that raises the stakes for incentives. “We break down compensation for our clients to the finest detail and align that with what they’re considering,” he said. “So when they go to resign, they’re well prepared for the counteroffer, which often includes bonuses and other guarantees.”