50% back to office already - rest will return in New Year en masse

Talent Management Meeting takeaways

Oct 19-20, 2021


Half of real estate investment managers are mandating in-office attendance for the vast majority of their employees already – while the other half expect to return en masse after January 1, 2022.


A poll of members at NAREIM’s annual Talent Management meeting this week showed that 47% of firms were already back in the office for most employees, except where there were health and personal exemptions. Another 47% said they’d wait for the New Year to begin.


On vaccinations a similar split among management firms appeared, with 49% requiring employees to be vaccinated against Covid-19. The rest didn’t require vaccines, but 14% were asking for proof of vaccination to enter the office or routine testing.


As the industry – and world – begins to return to travel, offices and not working remotely full-time, NAREIM members discussed the impact of Covid on recruitment, retention – and how to better engage employees and help with their daily challenges.


The meeting, which comprised breakout room and whole room discussions on DEI practices, learning and development, benefits, compensation and retention, raised key issues for all firms, including the future of flex work, retention in today’s tight labor market and the focus on well-being and inclusion.


To download the presentations from the meeting, click here


Key highlights from the meeting, included:


Flex work:

According to the poll, a third of managers expect 3-2 (three days in the office, two days at home) to be the long-term strategy compared to a quarter who said the long-term policy was expected to a full return to the office all week.


Retention when remote

Members highlighted one of the challenges of onboarding new, particularly junior talent while remote. One firm commented the lack of opportunity to collaborate, work and talk in-person had impacted the retention of associates – with another saying they were requiring new associate and analyst hires to do one month of training in one of their key offices before being allowed flexibility.


Focus on well-being and DEI

Compensation isn’t the only tool that helps retain talent. During a presentation from Willis Towers Watson’s Carrie Khan, members discussed how well-being and inclusion should remain at the forefront of talent management decisions – and how inclusivity should be ingrained in culture. “Total rewards and well-being are synonymous [today],” said Khan.


Key tactics included focusing on well-being as part of leadership learning and development programs, and providing leaders and managers with training on how to help team members cope with stress and anxiety post-Covid. Fireside chats among leaders and managers were also helpful, to help spread skills focusing on employee physical, emotional, financial and social well-being.


76% see headcount rising

Three-quarters of NAREIM members expect total headcount to increase during 2021 – after a year when 42% of firms experienced flat or declining employee numbers.


The news isn’t surprising, not least given the performance of investment management firms in 2021 with net AUM growth and capital raising on track to rebound to the levels of 2018 and 2019. 


However, amid the current tight labor market, recruitment and retention of talent is more challenging than in years prior.


Recruitment & Retention: key issues

During a presentation on margins and total compensation trends by Erin Green and Austin Morris of Ferguson Partners, members raised key issues and questions, including:

  • Expanding the CRE talent pool. Members raised issues of looking beyond CRE for new hires after it was revealed 40% of all voluntary resignations in 2020 left the commercial real estate industry. Data from Ferguson highlighted that of all the new hires made at junior levels in 2020 just 35% came from outside CRE. By the time you get to the executive management level, that figure reduced to 11%.

  • Regions and compensation compression. Members spent time discussing the impact of remote work on regional differences in compensation as well as policies for handling compensation compression between entry-level, junior and mid-level professionals given the tight labor market.

  • Better incentives. Non-cash retention incentives, including the expansion of carry to junior-level participants and co-investment opportunities, were discussed by members, including questions about what is the best incentive for junior to mid-level talent is as they look ahead over the coming 5-10 years.


To download the presentations from the meeting, click here

Only designated members are allowed to access the Compensation presentation from Ferguson Partners. Please contact Zoe Hughes zhughes@nareim.org for more information.