CREJ - Office Properties Quarterly - June 2016
Let’s face it, commercial brokerages are aging. With the median age of commercial real estate professionals approaching 60 years old, it’s no secret that brokerages must restock their talent pools with younger employees. This is especially urgent because so few new brokers entered the profession during the most recent recession – resulting in a glaring absence of young brokers at many firms. To ensure their viability and future success, brokerages must aggressively deploy policies and practices to not just attract the next generation of brokers, but also to cultivate and retain them. Last year, Pew Research revealed that millennials now comprise the largest share of the U.S. workforce. These workers – roughly aged 18 to 35 – eventually will make up a greater and greater proportion of your brokerage as baby boomers retire. But to keep the most talented members of this generation, brokerages must adapt. One challenge lies in the fact that millennials’ habits and values are different from those of older workers – and on the surface, many of these preferences also seem incompatible with the prototypical commercial real estate brokerage. Generally speaking, millennials are tech-savvy, risk-averse, collaborative, skeptical of authority and hierarchies, and more casual in their demeanor and appearance. They also are burdened by record-breaking piles of student debt and increasingly are cynical about the American Dream that invigorated the career ambitions of their forebearers. However, there are certain aspects of commercial real estate that make it an attractive option for millennials. Two defining characteristics of working as a broker are flexibility and autonomy – qualities with great appeal to millennials. The younger generation also is civically and politically engaged, and they place a high value on work that they consider meaningful. A career in commercial real estate, helping small-business owners find spaces and being a part of the wider community of planning, development and sustainability, can provide the kind of purpose and meaning that millennials desire in their work. Not only is this generation of young workers different from its predecessors, but also the nature of the labor market has changed in ways that make it more difficult for brokerages to attract talent. In years past, there was less competition for the most entrepreneurial and ambitious young workers. Commercial real estate was an appealing and lucrative industry, with rewards and attributes that helped it compete favorably against banks, consulting firms, ad agencies and insurance companies for top talent. However, the recent college graduates who may have entered commercial real estate a generation ago increasingly are attracted to software, biotech or whatever startup lets them chase after an IPO windfall in the comfort of jeans and a t-shirt. To vie for the very best millennial talent – not only against other industries, but also against other commercial brokerages – you must be willing to take steps to shift your culture, processes and workplace expectations. If you haven’t already, take some time to contemplate and evaluate your brokerage on these key dimensions. Culture. Millennials distrust rigid hierarchies and rules. If you want young brokers to work at your firm, eliminate bureaucracy, show respect to even the least-experienced employees, and build a culture where diverse opinions are not just tolerated but celebrated. You also must create a culture that embraces technology and seeks new ways to use it to improve efficiency and results. Technology has been incorporated into every aspect of millennials’ lives since they were small children, and they will not thrive in an environment that relies on obsolete tools and manual processes. Communication. Transparency and honesty from their leaders are crucial. Millennials desire a level of visibility into decision-making and strategy that may exceed what you’re used to or comfortable with. They also want their voices to be heard. In exchange, though, they will inject much-needed vitality, creativity and passion into your brokerage. They value feedback, but they’re not looking for constant praise or validation, contrary to common belief. They grew up using modes of technology that provide instant gratification, and they expect continuous feedback, both positive and negative, at work. Relying too heavily on formal review processes will frustrate and alienate them. Collaboration. Creating a truly collaborative working environment is key. Meetings should be for interactive problem solving and decision-making, not for issuing directives or paying lip service to consensus building. Consider redesigning your office space to support team-based work and spontaneous interactions. Make sure you also deploy technology – like Slack and Google Apps – that facilitates the kind of cooperation and camaraderie that millennials need in their workplace to be both productive and content. Compensation. While millennials actually are less concerned with how much money they make than you might think (relative to other factors, anyway), they do generally prefer a steady paycheck to a commission-only job. One reason for this is burdensome student debt obligations. So you should consider offering loans or draws to mitigate this. They do appreciate the control and potential that comes with a commission-based career, so it may just take a bit of a safety net to help them overcome the perceived risk and, instead, focus on the possibilities.