NEW YORK CITY—If hiring in commercial real estate represents the proverbial canary in the coal mine when it comes to the broader employment market, the yellow bird may be a little nervous at the moment. The latest SelectLeaders Job Barometer reports that CRE job postings fell 38% between last May and the end of the year, with a reversal of the trend in January. It may portend a pullback in hiring generally, just as the slowdown in CRE job postings in early 2007 anticipated the broader market correction.

“Commercial real estate employers became tentative in their hiring starting in mid-2016, and the question is whether the reversal we saw in January is a temporary blip or a true reversal in confidence,” says Dr. David Funk, managing editor for the SelectLeaders Job Barometer, adding “Development-related jobs continued to decline, adding credence that employers may feel the cycle is heading towards the retrenchment stage.”

The reversal at the start of 2017 may also be typical of the “January effect” in CRE hiring, where job postings tend to surge as the year gets underway and then ebb in the spring before rising again during the fall hiring season. “Hiring budgets and the slow down during the holiday season certainly impact this hiring trend that has held relatively consistent since we began tracking the data,” says Susan Phillips, CEO of SelectLeaders, which powers the GlobeSt.com Career Center.

New to the Job Barometer is the COMMERCIAL REAL ESTATE EMPLOYMENT CYCLE, developed as a resource to understand real estate employment dynamics. It identifies seven real estate market stages that correspond to distinct hiring activity as well as five employer mindsets the evolve during a full CRE employment cycle. Specific job functions, such as development, asset management and acquisitions, experience peak hiring demand based on stages in the cycle.

“Our decade-long research into CRE employment activity has revealed a clear connection between employers' mindsets, the span of their expectations in new hires, and the nature of jobs they post based on where we are in the cycle,” says Funk. SelectLeaders research shows that toward the top of the cycle, employers tend to hire for niche job functions in specific sectors, such as a multifamily acquisitions specialist. Conversely, at the retrenchment and recovery stages, hires are expected to fulfill multiple job functions across more than one sector.

“The pace of hiring and the nature of the job postings that we are seeing predominate now argues that we are at the 'cautious optimism' stage in the CRE Employment Cycle,” Funk says. He points out that current hiring levels could indicate slow growth and stability rather than a transition into retrenchment.

There's a close correlation between increasing job offers and compensation as the market cycle moves from recovery to boom. Riding a parallel track is the employer mindset, which evolves from that of cheerleader to recruiter to poacher during the up cycle.

“We've also found that new applicants to commercial real estate, that all-important pipeline of talent, drops dramatically during the retrenchment through recovery stages,” says Phillips. She notes that such swings in new entrants can create talent gaps that endure for years. Click here for the complete SelectLeaders Job Barometer.

Instant Insights /

CRE Job Slowdown Hints at Broader Hiring Pullback

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