Women across the nation are switching jobs at the highest rate ever witnessed. Women in leadership positions are particularly mobile—and at a higher rate than men in leadership.
To put the scale of the problem in perspective: for every woman at the director level who gets promoted to the next level, two women directors are choosing to leave their company, according to research from McKinsey & Co.’s Women in the Workplace 2022. (The survey collected information from 333 participating organizations employing more than 12 million people, surveyed more than 40,000 employees and conducted interviews with women of diverse identities, including women of color, LGBTQ+ women and women with disabilities).
The commercial real estate industry isn’t immune from the churn. In fact, since the start of the pandemic, one in four women professionals (27 percent) surveyed by CREW Network has taken a new job at another commercial real estate company, while eight percent interviewed for a new job but did not switch, according to the organization’s 2022 industry research paper, Building the CRE Workforce of the Future. The research study gathered insights from more than 1,200 commercial real estate professionals across five countries, in more than 25 specializations and 10 sectors.
Of the 27 percent who left to take a new position at another company, 51 percent sought better opportunity/career growth, while 22 percent said their values/priorities no longer aligned with their previous company. Only 13 percent left for better compensation/benefits.
There has been some minor improvement in recent years. A 2022 research survey from the National Association of Real Estate Investment Managers (NAREIM) found that in North America, women now represent 42.5 percent of the commercial real estate workforce, a 3.7 percent jump from 2021. There was also a slight increase in Black and African-American women in the industry, at 3.7 percent, up from 3.1 percent the year prior. The study found that of the firms it surveyed 95 percent were addressing DEI issues, and almost nine out of 10 firms had set specific quantitative or qualitative goals to gauge their success. (NAREIM’s study included participation from 192 unique firms, representing more than 375,041 full-time employees in a cross-section of various commercial real estate businesses, sectors and locations).
However, women leaders in general are more than 1.5 times as likely as men at their level to have left a previous job because they wanted to work for a company that was more committed to DEI, according to McKinsey.
“Many women have moved on to other opportunities that are a better fit for their career aspirations and lifestyle,” says Wendy Mann, CEO of CREW Network. “This has been dubbed ‘The Great Aspiration’.” The implications of this trend on commercial real estate businesses are significant. If companies cannot hold onto the women employees they have today, particularly women leaders, their futures as diverse and inclusive workplaces will be in jeopardy. That is particularly true of commercial real estate, where women represent 37 percent of the overall workforce and hold only nine percent of the industry’s leadership positions.
“Young women are even more ambitious, and they place a higher premium on working in an equitable, supportive and inclusive workplace,” states McKinsey’s Women in the Workplace 2022. “They’re watching senior women leave for better opportunities, and they’re prepared to do the same.”
The global consulting firm found that more than two-thirds of women under 30 wants to be senior leaders. Additionally, well over half say advancement has become more important to them in the past two years.
“DEI is not a nice-to-have,” Mann says. “It’s a must-have in the world we live in today, not just because it’s the right thing to do, but because success depends on having diverse, innovative people within their organizations. Research has shown that the bottom line is 10 percent better with women in leadership.”
“Broken rung” is still broken
The scarcity of women leaders is partly attributable to the “broken rung”—a term used to describe the first step from entry level to manager. Consider this: for every 100 men who are promoted from entry level to manager, only 87 women are promoted, and just 82 women of color are promoted, according to McKinsey.
Mann notes that the percentage of women in the commercial real estate industry has remained static over the past five years. Even more alarming is the fact that the percentage of women leaders hasn’t changed in the last 15 years. This lack of progress reflects the unrelenting challenges that women face as they ascend into leadership roles.
“When the pandemic hit, we felt like progress really derailed for women, or at the very least, progress was delayed,” Mann says. “However, our recent research tells us that women are experiencing greater satisfaction with their careers because employers are doing salary administration and providing salary transparency. This is positive progress, though it’s still slow going.”
More than table stakes
When it comes to DEI, many people toss around the term “table stakes.” In this context, table stakes refer to the minimum DEI effort required to have a credible position in the marketplace. Examples of DEI table stakes include tracking representation and attrition by gender and race, conducting equal pay assessments and making adjustments as needed, and setting clear and specific evaluation criteria for hiring and performance reviews.
More than 92 percent of respondents in CREW’s 2022 survey said their companies are inclusive (for the purposes of the survey, inclusive refers to the practice or policy of providing equal access to opportunities and resources for people who might otherwise be excluded or marginalized, such as those having disabilities or belonging to other minority groups).
It’s important to note, however, that 44 percent of respondents described their companies as “somewhat” inclusive. A much smaller percentage have progressed to leading DEI practices such as setting goals for representation in management and senior leadership by the intersection of gender and race (e.g. women of color), providing allyship training and establishing formal sponsorship and/or mentorship programs specifically for women and/or women of color.
An even smaller percentage of companies—less than 30 percent—have implemented emerging DEI efforts. Examples include providing financial incentives to senior leaders for making progress on diversity metrics and having a bias monitor sit in on candidate reviews for hiring and promotion decisions.
Multifamily developer and manager The NRP Group is part of the small percentage of companies that have embraced emerging DEI efforts. For example, the Cleveland-based firm established a Diversity Leadership Council and uses a DEI scorecard to track its progress, according to Jennifer Baus, principal and executive vice president of design and entitlements for the firm.
“We’ve made steady progress over the past few years with DEI, and we’re committed to continuing to improve,” she says.
Currently, women account for 40 percent of NRP’s and 59 percent of NRP’s managers. Women and people of color represent 45 percent of the firm’s executive and senior leadership.
Imagining a place for themselves
When it comes to recruiting women and women of color, DEI professionals often talk about representation. When potential employees cannot see themselves in the commercial real estate industry—when they see no one who looks like them—it’s difficult for them to imagine a place for themselves.
“When I joined NRP, I looked around, and I didn’t have someone of the same gender who I looked up to or that I could go to for advice,” Baus says. “There were a few women who were my equal, but no one ahead of me.”
According to CREW Network’s most recent benchmark study (2020), women in commercial real estate rank the lack of a company mentor or sponsor as one of the top three barriers to their advancement in the industry. Only 56 percent of 2022 survey respondents said they had access to a mentor or sponsor in the last two years. The number was significantly lower for people of color—only 21 percent had a mentor or sponsor in the last two years.
These personal connections lead to relationships that can transform and advance careers. With the help of mentors, it's much easier for talent to develop strong working relationships with their managers, peers, and other key stakeholders.
Baus, after years of dreaming of launching an employee resource group for women, founded NRP’s Women’s Inclusion Network (WIN) in 2018. The group’s mission is to “bring women in, promote them up, and keep them there,” she says.
WIN initiatives include: NRP Legacy, a series of fireside chats held in conjunction with Cleveland State University about the power of mentoring; Curiosity Conversations, panel discussions with industry leaders around relevant topics that impact the business; and Limitless, discussions that delve into leadership and emotional intelligence.
Baus is certain that WIN has contributed positively to NRP’s ability to recruit and retain talented women at all levels. “I think it helps to entice candidates and encourage them to come to NRP because we are showing them that we are so welcoming,” she says.
She also credits WIN with helping to advance women within NRP, herself included. Two years ago, she and Chief Information Officer Rachel Johnson joined the firm’s executive team, and earlier this year, both women were named principals—the first women to be welcomed into the partnership in the firm’s 25-year history.
“Now that Rachel and I are principals, I hope our employees, especially our women employees, can see that their interests are represented and protected by other women,” Baus says.