Safety is key for any return, and so is team mental health
NAREIM Talent Management online roundtable, May 11
Real estate investment managers are conducting employee surveys to assess the comfort level of returning to the office, as parts of the U.S. and industry start returning to the office.
Almost two-thirds of real estate investment managers are targeting a phased and partial return to the workplace through the summer, however all managers said the process would be slow and in sync with the comfort of employees.
During the NAREIM Talent Management online roundtable this week, members revealed employee surveys and town hall meetings were being conducted regularly to assess employee feedback on issues ranging from work from home, protective equipment to how people travel to work. The key, the members said, was to ensure people “felt safe”.
In preparing for possible outbreaks, some firms are introducing a desk ticketing system, to allocate desks on a daily basis to accommodate significantly reduced capacity and allow for some tracing in the event of an infection; converting a conference room into an isolation room in the event of an infection/worsening symptoms during the work day; daily health attestations.
The mental health of employees was also discussed, with one member saying the firm had provided one free day off – which had to be taken by the end of June – to all employees to ensure they were disconnecting from work while at home. The carry-over of paid time off (PTO) was also being relaxed by many firms, with some members moving to an unlimited PTO schedule for 2020. One member also provided three additional days for employees to do community service.
Other key takeaways from the NAREIM Talent Management online roundtable included:
Summer interns: Internships have typically continued, although in a virtual manner for almost all managers. Some firms have reduced the intern program time frame, such as from 10-weeks to 5 or 6-weeks, although they have continued to commit to paying interns for the full 10.
Quick win ideas:
Team up with other real estate investment managers to share virtual programming for interns. One NAREIM member is working with another manager to share a virtual speaker series and case studies for interns.
Interns have successfully postponed apartment lease agreements where programs have been delayed. Some firms will consider helping pay for the leases if interns cannot cancel agreements in the event they cannot go into the office.
Assign two mentors to each intern, with mentors meeting virtually once, twice a week or daily for private discussions and catch-up sessions.
Capital raising: Direct capital flows to managed real estate vehicles were down 30% in Q1 2020 year-over-year. Covid-19 didn’t impact the U.S. until March, however, and so the real estate investment industry is expecting allocations and commitments to decline further through the remainder of 2020. Sectors such as industrial and multifamily have performed better than others food groups.
Revenue: Given capital raising flows and slower transaction volume, real estate investment management revenues will be impacted, with expectations for a 10% fall in 2020 if not greater.
Recruitment: The majority of real estate investment managers have implemented a soft hiring freeze in the wake of Covid-19, with opportunistic hires in frontline areas, such as asset management, property management for vertically-integrated managers and investor reporting.
Retention: Almost all real estate investment managers have kept teams and salaries intact during the Covid-19 pandemic. During the financial crisis, average turnover among real estate investment managers was flat, although there was heightened conversations surrounding the alignment of executive pay in an effort to retain key, senior players.
The group said some of the key questions today relate to performance metrics, and which ones are the right ones for 2021 and beyond?
Do vesting periods and other financial incentives need to be over a longer time period? Which metrics require more subjectivity? Do we require spot incentives focused on team retention?
HR heads also forecast the need, later this year, to balance the performance of teams stepping up in immediate aftermath of Covid-19 against revenues received during 2020.