Managers need to stay calm. Significant market adjustments to base-bonus were made in 2021
NAREIM Talent Management meeting: Key takeaways
July 12, 2022
Most real estate investment managers made significant adjustments to base and bonuses in 2021 – and now predict cash compensation to rise only slightly in 2022.
The NAREIM Talent Management meeting discussed the results of the latest NAREIM member survey on compensation, benefits and inflation during the meeting on July 12 – with attendees largely agreeing that significant market adjustments had been made in 2021, with many firms ensuring all employees were paid on par with the market.
While member firms said there were always key groups that you would “pay up for”, one member said it was critical to ensure employees were paid at or above P50 (50th percentile of the market) – with defined functional groups paid at P75 (75th percentile/top quartile) and above.
The meeting also revealed that 60% of member firms were offering base salary increases of between 2% and 6% in 2022. The full data from the member survey on compensation and benefits, can be accessed here.
Other key takeaways from the Talent Management meeting included:
Culture is huge
Members said employees, particularly junior professionals, were giving more feedback on culture with many firms focused increasingly on health and wellness. One member provided monthly team building exercises, including a Peloton instructor session, while another provided free sessions on the BetterHelp mental health therapy app. The member said 18% of employees had taken up the BetterHelp sessions.
Other members also stressed the importance of providing teams and employees with functional-group team building opportunities or networking sessions, as well as sessions for certain seniority groups. Happy hours though were not wanted by employees, one added, instead firms were doing regional gatherings of analysts/associates, or functional group overnight offsites.
It was critical to manage the expectations of young professionals particularly regarding compensation increases, with one member it was important to tell recent hires, who may have only been in the industry or work for the past 2-3 years, that the current increases were not sustainable in the long-term.
Managers advised to remain calm when employees leave
When employees did leave purely for compensation reasons, HR leaders advised managers not to panic. “We cannot be reactionary to what they are seeking,” said one member.
Another added that their firm was having to “level-set” expectations of some employees who heard colleagues or friends were paid more. They said often the employee didn’t appreciate the skills and experience difference – or the different roles. But they also said, when an employee did leave for more money, they wouldn’t be forced into a “counter-offer culture”.
Member survey on base, bonus and benefits:
NAREIM invited members to share their compensation and benefit best practices and mid-year adjustments between June 20 and July 11, 2022.