You might recall that my last article highlighted what I believe is happening in the real estate market and the economy at large. It treated how these factors are affecting the outsourcing business. The biggest change I see coming is change itself, and over the next few months, I'm going to tackle various subjects that I feel will help the corporate real estate professional prepare for the change that I believe is upon us.

This month, I want to discuss training--something I consider the best and cheapest method of corporate survival--and sadly, the most ignored. If you're in CRE management, one issue I guarantee you're going to face this year is employee turnover. In a 2001 paper titled "The Retention Dilemma," the Hay Group, a global organizational consulting firm said, in effect, that employee satisfaction with career growth; training opportunities; and coaching/counseling made the biggest difference between workers who were loyal to the company and those who left. The study went on to say that as a rule, each manager or professional who leaves a company costs the equivalent of 18 months salary to replace.

Training on the other hand, is relatively cheap. For example, an annual $1,500 training budget for an employee making $50,000 per year is only 3% of that employee's salary. Sounds like a no-brainer, doesn't it?

Well, then consider this: In the excellent 2003 book "Impending Crisis: Too many Jobs, Too Few People," three futurist and organizational-specialist authors concluded that the annual turnover rate for middle-performing individuals was reduced by half--and almost 60% for top performers when an organization is committed to training and development. Moreover, training and development is directly related to the employee retention rate. In other words, if you don't train, you will not retain. Johnny Cochran would have liked that one!

The reason I bring all this to your attention is this: I have needs. I need your excellent real estate and facilities-management employees and I know one day they'll be coming to join me. Sure, I'll hire them on my payroll when you outsource your CRE and Facilities business to me. And these employees will do a far better job for you than when they were yours. Nothing has really changed-they sit in the same seats, they do the same work, their compensation and benefits are substantially similar. Only now they work for me. I can provide them career growth and training opportunities that will give them tremendous job satisfaction. And it cost me $1,500. And it may have cost you your job. Did I get your attention? As a CRE manager, here's what you can do with regards to training:

Skill Assessment and Improvement. Make skill assessments part of your annual performance-appraisal process. Highlight areas for improvement and make it incumbent upon the employee to manage their own training and development (albeit with the company's money). Set targets and evaluate employees on the basis of their achieving their own training goals. Tie future training opportunities and budget to employees who are motivated. The employees that can't or won't attain their own goals will obviously find their own way to the door.

Industry Affiliation.Establish industry affiliations with those CRE organizations that are core to your business, whether retail, industrial, office or facility-related. Creating affiliations and purchasing training in bulk can lower your overall cost and maximize your individual training dollar. Plus, the industry linkage assures that you're learning from and giving to other forward-thinking real estate professionals and firms.

Internal cross-training. Short on cash? Boss a tightwad? The final defensive training strategy involves cross-training: making sure everyone can do everyone else's job. Teach your lease administrators to negotiate leases; teach your CRE managers to abstract leases (good luck with that, by the way); teach your facilities managers how to evaluate lease vs. own decisions. Even though this method is not the best deterrent to employee turnover, having a good, cross-functional team will ensure that exiting employees leave dents rather than craters in an otherwise stable organization chart.

Next month: Collaboration--Building Strength Through Vision.

Based in Anaheim, CA, Vik Bangia(vik.bangia@cbre.com) is a managing director in CB Richard Ellis' global corporate services organization.

Instant Insights /

Corporate America Must Get Into Training

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