Diversity will not work without inclusion. Even those CRE firms with diversity initiatives and programs still have inclusion problems. So how do you build inclusion into your business? Below are a few outlines suggestions and examples to help.
IF YOU CAN’T CHANGE THE PEOPLE, CHANGE THE SYSTEMS.
In 2015, we surveyed SVN® Advisors (brokers and salespersons) and asked how they got their first job in real estate. The results were not wholly surprising. Most women came to their first job in real estate through formal procedures (e.g., applying to an advertised opening) and often didn’t come in as brokers. By contrast, almost every male advisor came into the industry informally through friends and family. Some may argue that women just need to network better. But, is putting the responsibility on individuals traditionally excluded by a closed network really fair?
This fairness issue is why we included a follow-up question, “how did you get your second job in real estate?” The answer: the majority of both female and male advisors networked their way into their second job in equal numbers. This result indicates the big problem is getting women and other underrepresented populations into the business in the first place. For this to happen, the system needed to be changed.
Armed with this information, the first thing we did at SVN International Corp. was to standardize our intern and new advisor hiring practices. Instead of putting the responsibility on women and people of color to break into an informal system, we made the system more formal for everyone. With the help of an on-line augmented writing platform, we rewrote our brokerage job descriptions to be more equally engaging to millennial men and women and then promoted them at colleges and community colleges across the country. That summer, we documented that our offices not only hired more interns, but also hired 30% women and 30% people of color. While those numbers aren’t record-breaking, they are above the standards for CRE brokerage.
Since implementing this program, our quarterly SVN | Jumpstart training sessions for CRE advisors who are new to the SVN brand have had, on average, approximately 30% to 40% women and people of color in attendance.
HIRE FOR SKILLS AND PERFORMANCE, NOT FOR PERCEIVED FIT AND POTENTIAL.
In addition to leveling the playing field for hiring where possible, CRE companies need to work towards hiring for skills and not existing “cultural fit.” Studies have shown that men apply for jobs when they have 60% of the skills required and women when they have 100%. Based on that alone, women should be given a fair shot any time their application is in the ballpark. Unfortunately, studies have also shown that men are hired and promoted based on future potential and women on their past performance. Instituting an even-handed skills-based assessment should be a step towards eliminating the two separate standards.
SVN research has found that successful CRE advisors, regardless of gender, possess a combination of grit and a growth mindset. If candidates have demonstrated these characteristics, it is likely they will succeed no matter what they look like, provided they are granted equal access to opportunities and resources.
While personality and behavioral testing is one way to identify skills, another way to detect grit and a growth mindset, based on SVN research, is through prior evidence of mastery over something that is harder to pursue than it is to give up. For example, elite sports success has been a sound source of CRE brokerage talent, because it tends to demonstrate the two elements of grit: “perseverance of effort” and “consistency of interest.” While recruiting athletes has skewed male over the past decades, there is no reason this has to be the case. Title IX, which has created equal funding for women’s sports, has been in place for over 45 years, and there are many women and people of color who have proven they have grit out on the playing field. SVN research also discovered other experiences that, like sports, can be indicative of the grit and growth mindset needed for success as a CRE advisor including the mastery of an instrument; exemplary, multi-year employment experience (at any level and in any industry); fluency in a second language; and/or a military career of distinction.
When you focus on skills and past performance, and not stereotypical cultural fit and perceived potential, you will not only improve the quality of hires, but also create a larger talent pool and the beginnings of a pipeline for diverse talent. However, for non-traditional candidates to succeed, you will still need to provide them with an even playing field.
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CREATE A COMPANY CULTURE OF ABUNDANCE AND TRANSPARENCY
Diversity and inclusion efforts don’t start and end with recruiting. It is what companies do after they hire that matters even more. In order to implement a culture of inclusivity, companies must create a mindset for abundance, where transparency is the cultural norm.
STEP 1: Eliminate the scarcity mindset.
Scarcity mindsets happen when employees are focused on the competition and keeping what they have out of the hands of others. It’s the belief that for you to win, someone else must lose. It’s the fear that to diversify an organization, qualified white men will lose out to underqualified “tokens.” This does not have to be the case. A recent PwC study of Boards of Directors found that many of the boards that are diversifying are doing so by adding seats, not by replacing current directors. They are also expanding the qualifications to focus on skills and not just relying on the narrow, “former CEO” qualification.
The “locked door, locked drawer” mentality that permeates many CRE companies is the direct result of a scarcity mindset. This needs to be addressed because not only does it stifle inclusion, it limits a company’s potential for innovation and increased overall financial performance.
An abundance mindset, a term coined by Stephen R. Covey in 1989, is when a person believes there are enough resources and successes to share with others. The irony of the “locked door, locked drawer” mentality is that CRE is an industry with abundance. While buildings and assets might change over time, they are certainly not scarce. In fact, we can’t build housing fast enough in most urban markets. Even the recent adoption of Opportunity Zones in the Tax Cuts and Jobs Act of 2017, is the industry creating additional opportunities to invest in previously overlooked markets.
In effect, the CRE industry itself has created and is perpetuating an environment of “artificial scarcity.” Yet, as demographics shift and CRE technology evolves, the perception of abundance will only be clearer as data becomes more ubiquitous, and new and unlikely buyers from across the globe continue to enter into new markets at increasing rates.
When a company adopts an abundance mindset, it means that there are more opportunities and resources for everyone, including those previously discouraged from entering the industry. Companies that adapt will benefit, as will all their employees, but especially the underrepresented ones. However, for women and people of color to truly benefit from the abundance mindset, a company also needs to operate transparently.
STEP 2: Create transparency in business operations.
Inclusion is not about special treatment; it’s about treating everyone fairly. In fact, most women and people of color who are grossly underrepresented in their companies or industries don’t want separate networks or initiatives. Nor do they want to change the rules. They simply want to know what the rules are; something that is often hidden in companies that lack transparency. One way to create a fair playing field is by operating with an open play book. Transparency is needed about how everyone gets paid and promoted, how the culture works, and how to access all resources whether they are tools, training, opportunities, or people. Note that equal access does not mean equal outcomes. Outcomes depend on the individuals involved.
Transparency begins by establishing company-wide metrics and road maps, adopting collaborative technology, creating opportunities for employee feedback, and being more openly communicative at all levels of the organization.
Diane K. Danielson is the COO of SVN International Corp. The views expressed here are the author’s own and not that of ALM’s Real Estate Media Group.