A competitive jobs market for in-demand real estate professionals is pushing salaries and overall jobs costs, according to the London-based senior MD and head of Europe at a talent recruitment specialist.
Serena Althaus of Ferguson Partners briefed colleagues via an internal summary of industry events in which she said European firms face wage inflation of 20% or more just to retain existing staff and hire new talent in a very dynamic market.
‘Firms have increased bonuses by more than the rate of inflation, across the board, for the first time since the GFC,’ she wrote.
‘Although it is a hackneyed expression, the “war for talent” is very real and businesses across the industry recognize the disrupting effect of losing not just key talent, but any talent when investment activity is so strong.’
She added that long-term incentive plans were ‘proving their value’ as retention tools because employees consider the ‘friction cost’ of leaving behind significant equity in such a heated market.
‘Firms which do not have existing equity plans in place will struggle to attract and retain talent, even if there is a plan to create equity mechanisms in the near future as the risk cost to the individual is too great.’
The talent management expert also said hiring was focused on ‘beds, sheds, meds and debt’.
Also, alternative real estate sub-sectors are absorbing a high percentage of talent as firms seek to specialize in specific asset classes.
‘As seen in other parts of the world, the real estate sector is experiencing a surge in demand for human capital in this space: Housing, as “beds” continues to establish itself as an investible asset class covering affordable housing, social housing, senior living and student accommodation; Data centres, given the major growth in digital technology and communications; Cold Storage – given the increase in online grocery orders and the transportation of temperature-sensitive pharmaceuticals; Life Sciences – highlighted by the pandemic; and the on-going demand for Logistics.’
‘Debt funds have emerged as a substitute or complement to mainstream lenders. There is increased growth in debt intermediaries among brokers and advisors as the number and variety of debt providers becomes increasingly broad.’
In the wide-ranging summary, Althaus covers succession planning, the working from home culture, the need among real estate companies for a different style of asset management, the recruitment of in-demand skills from outside the property industry, plus diversity & inclusion, and geopolitics.
'Given the current situation between the Ukraine and Russia it is hard to anticipate what the rest of the year may hold. With a backdrop of rising interest rates and inflation, the real estate industry is entering uncertain territory.'
