ATLANTA—“Firms that want to attract the best talent need to expand their talent pool.” That, in a nutshell, sums up the focus commercial real estate firms must adopt if they are to remain relevant.

The quote is taken from a research report produced by SVNIC earlier this year entitled, Gen Y: How Commercial Real Estate Firms Can Attract and Retain Millennials. It continues: “They can do this by contacting universities with real estate programs or looking to diverse candidates in other industries; for example, healthcare and pharmaceuticals or staffing, where women make up nearly half of the sales force. Firms can also look for diverse talent in other areas of commercial real estate. Simply searching on LinkedIn for the skills a firm needs and not for faces that look familiar can help expand a talent search. CRE firms should not settle for who shows up in the hiring queue; they must make an intentional effort to diversify.”

The report, written by Diane K. Danielson, chief operating officer with SVNIC, was just the beginning, she says. For indeed, the search for talent has to—in her words—extend beyond the traditional white male base if commercial real estate companies are to remain relevant to a new breed of client. We caught up with Danielson days before the CCIM Thrive Conference here, where she will be a speaker, to discuss the brain drain the industry faces, and what you should be doing about it.

GlobeSt.com: You've mentioned dinosaur companies. Define, please.

Diane Danielson: Any company founded before technology really took hold in this industry risks that name. There can be older companies that aren't at all dinosaur companies, so it's not at all an age thing. But it's tied to the technology and a dinosaur company doesn't embrace technology. It tolerates it.

GlobeSt.com: I'm surprised you stopped at tech. I thought you'd mention embracing the ways millennials work.

Danielson: But you can't separate the technology from that. My office sits in my carryon bag. It's an iPhone, a laptop and an iPad. I do bring a pen and paper once in a while but even that's getting less and less. There's a different way of working, but much of it is tied to technology. For a millennial to be told that they have to sit in traffic for 90 minutes in Boston or New York to get to the office by a certain hour when they could be working at home and be more productive is frustrating.

That said, SVN has core hours and core days when we want all hands on deck. We do believe that you can learn by interacting face-to-face with other people. Those days are Tuesdays and Thursdays. But I also know that all of our employees are adults and they're doing their work on their own. Rightfully so. We're a results-oriented industry, so we should appreciate this more than most people.

GlobeSt.com: But today aren't those who don't embrace the change in work and tech really in the minority?

Danielson: Our business is one of the slowest to adapt. Not that they reject it, but they tolerate it and it's not celebrated or embraced. You can be in the business and have your Rolodex of important names and still do an amazing business. Until we can't do commercial real estate that way at all, we're not going to fully embrace it across the board.

GlobeSt.com: Why does all of this matter?

Danielson: The average age of a real estate broker today is in the mid-60s. So in the next five years, we're going to see a massive wave of retirement. If we don't attract the next generation there'll be a major lack of talent, a major brain drain. We're headed for new challenges, and real estate touches upon all of them: climate change and the changes in flood areas, infrastructure and how our clients work today. We have to start thinking about these things, and we want the best and the brightest. Real estate firms need to be where younger people want to work.

GlobeSt.com: But we're not talking just about millennials here, correct?

Danielson: As an industry we recruit people we know. So if we are white male brokers we're going to recruit our sons who fit that model. We need to cast a wider net in a very insular industry, and that's not easy to do. We also need continuing education and an emphasis on certifications for women and minorities. That's why organizations like CCIM are important.

We need more women and people of color in the pipeline so there are more options for role models. Everyone needs mentors, role models, sponsors, people to give you advice, to put your name forward and someone to look up to. If you're a woman or a person of color, there aren't too many people who look like you in the upper echelons, so it's hard to find a role model. It's not that someone different can't be a mentor, but they'll certainly have a different viewpoint or experience. We tend to mentor people we're comfortable with.

GlobeSt.com: What's the bottom line here? How do we make all of this happen?

Danielson: We need to recognize that we do have a brain-drain problem and that it's an issue the whole industry needs to address. We have to understand where the issues are. That's what we're working on at SVN, and we're putting resources around finding answers to these questions. The millennial study was just the beginning. We're hoping to have more research done by this spring.

GlobeSt.com: Toward what end?

Danielson: We're a franchise operation with a lot of small to medium business owners, and we feel it's a great way to run an office with a global brand and all the resources that go with it. Some of our workforce is going to retire and we want to make sure we're a viable organization going forward. We as an industry have to recognize that it's not just the right thing to do but it's the right thing to do for business.

Instant Insights /

How to Avoid the Coming CRE Brain Drain

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