Like every other sector of the UK economy, the real estate market is under pressure in the current disrupted environment. But however challenging the landscape is right now, shrewd property businesses and their investors are taking a long-term view. There are plenty of exciting pockets of opportunity.
The bright spots include student accommodation and retirement living – both of which present long-term opportunities underpinned by demographic shifts. In these segments and others, there will be more demand for experienced leadership talent and skills than there is an available supply. And across the industry, smart players are looking beyond the immediate turbulence to plan for the future.
Hiring strategies need to reflect these developments. It is a priority for businesses to identify the must-have skills that, once secured, will position the business for new growth when the bounce-back begins. Much of the mood at MIPIM 2023 reflected this mindset. For the first time since the pandemic, the industry assembled in large numbers to take stock, network and look to the future.
On the ‘road to zero’
One key trend on everyone’s minds, both at MIPIM and other industry events: the need for an increased focus on sustainability and ESG. All eyes are on how companies can accelerate their progress on the road to net zero by transforming the built environment to a more sustainable model. A feature of MIPIM was the lively discussion covering aspects of ESG ranging across development, design, investment, and the rise of circular approaches encouraging re-use.
Related skills in areas like holistic development, logistics, connectivity and more will be in high demand. Hot topics like the ‘15-minute city’, the need for tech-enabled collaborative workspaces that suit hybrid working, and the role of government in the public realm are likely to feature high on the agenda. Finding skills relevant to all these issues will often require searches that look beyond core real-estate and drill down into other sectors.
Progressing beyond diversity to equality and inclusion
Referring back to MIPIM, it was heartening to see more women among the delegates than in previous years – but there’s still a long way to go to reach a true gender balance, let alone diversity in other dimensions. While progress has clearly been made, the priority now should be for talent strategies to raise their sights to target not just diversity, but equality and inclusion in leadership teams.
There is a clear need to bring in people from different socio-economic backgrounds and with different life experiences and perspectives. There was a lot of debate at MIPIM around how to create a more inclusive industry workforce – mirroring the need for regeneration and growth that benefits all in society.
Maintaining the momentum
Despite the immediate headwinds facing the industry – the crisis in the banking sector was a frequent topic of discussion at MIPIM – there are clear grounds for confidence in the long-term outlook. There’s plenty of capital in the market looking for investment opportunities.
So there’s still strong momentum and pausing is not an option. The overarching priority continues to be finding ways to be smarter about both investing and hiring, not just for now but also for the future.
Given the environment we’ve described for real estate companies, how can your business create a talent strategy that will best position it for future success? We would recommend three steps.
- Take a long-term view – When identifying and recruiting the talent you need, don’t get sucked into short-term thinking or focusing just on the next six months. The only way to build the diverse, multi-skilled teams that will be pivotal to future success is to look beyond the immediate pressures and take a longer-term view, including in areas like CEO succession planning. Boards that fail to do this will simply build up greater risks for the future.
- Widen and diversify your lens on talent – As we’ve highlighted, cross-sector moves are on the rise across the real estate ecosystem, and the momentum towards greater workforce diversity is both growing and unstoppable. At the same time, new and more varied skills in areas ranging from ESG to organisational restructuring are at a premium, and in many cases are located outside the current real estate industry. All of this means it’s vital not to restrict your search criteria to the usual sectors and candidates. Instead, you should open them up.
- Increase the focus on assessment – Amid today’s volatile conditions calling for talent with new and different skills and qualities, the importance of rigorous pre-hiring assessment has come to the fore. Building the right leadership teams for the future demands deep insight not just into candidates’ skillsets and work experience, but also their psychological and behavioural traits. Assessment processes that include elements such as psychometric testing are vital in minimising risks and maximising the chances of making the right choice.
The watchwords: Innovation and flexibility
For market leaders, innovation and flexibility will be key to finding opportunities in real estate markets – and exactly the same qualities will be needed in the talent space. It’s time to widen the aperture and refocus on a more diverse future. The most forward-thinking players are doing this already.