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Tying manager performance to DEI key strategy for improvement outside of recruitment

NAREIM-Ferguson Partners DEI Survey briefing

February 18, 2021

Real estate investment managers see the recruitment of diverse candidates as the key strategy for tackling diversity, equity and inclusion (DEI) within the corporation.

However, two-thirds also believe that tying manager performance to DEI metrics and implementing mentoring programs for women and minority professionals in the leadership pipeline are among the most beneficial strategies after recruitment, according to an analysis of the NAREIM Diversity & Inclusion Survey by Ferguson Partners.

During a member briefing of the 2021 Survey results yesterday, Ferguson Partners’ Lindsay Pankratz and Erin Green highlighted key policies being implemented by real estate investment managers – and where survey participants saw the greatest area for improvement:

On bonus metric for managers:

  • 10% of companies tied manager performance to the development and retention of diverse employees. Yet 67% said their company would benefit from the policy, according to the 2021 Survey.

  • Asked how managers were implementing such a policy, Erin Green, managing director, at Ferguson Partners said managers are initially expected to align with a firm’s DEI policy and support the development of greater diversity within groups, but that performance could increasingly be tied more qualitative metrics such as employee engagement survey and DEI-specific survey scores.

  • It was critical, however, that firms develop clear, pre-determined criteria for how performance is judged in general – before layering on top DEI metrics.

Key highlights from the DEI briefing yesterday included:

Investors are looking for progress on DEI, and not specifically at the total numbers. They are expecting a plan to be in place and for managers to show improvements and progress in relation to the DEI plan/strategy

A majority of firms are focused on the recruitment pipeline when it comes to DEI, particularly at junior levels where candidates often come from the same schools and have the same background. To mitigate that bias, Erin Green highlighted practices being implemented including:

For the pipeline

  • Increasing the use of employee referrals:

  • Increasing the number of organizations you partner with to attract diverse talent (CLICK HERE to see the list of more than 100 organizations firms are already working with, donating money to and developing mentoring programs with on the NAREIM DEI website)

For the recruitment process

  • Change the job title to ensure it’s not turning off diverse candidates (one example, a post for a development analyst was changed to financial analyst after it attracted zero female candidates. All other criteria remained the same, but the results were dramatically different)

  • Remove bias from the process – remove identifying information

  • Implement diverse hiring panels

Strategies for improving inclusion within organizations typically starts by collecting data from employee engagement or DEI-specific surveys to understand how included people feel in decision-making and corporate culture.

That could be supported with smaller focus groups to ask how people feel they are treated

Fostering a sense of inclusion by creating affinity groups or employee resource groups, which can make recommendations to the organization on how to improve inclusion over time.

The DEI briefing follows the release of the 2021 NAREIM Diversity & Inclusion Survey on Feb 2. To read the executive summary of the Survey, click here.

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