Commercial real estate’s demographic imbalance in favour of white men becomes increasingly apparent with rising seniority. Newly released results from a global survey of the industry’s diversity, equity and inclusion (DEI) policies and practices show that a majority of respondents are intent on broadening their base of employees, but, for now, white men still fill the decision-making echelon to a disproportionate degree.
For example, women account for 41 per cent of the workforce in North American firms participating in the survey, and hold 29 per cent of senior-level professional roles and just 20 per cent of executive management positions. In the same companies, the proportion of white employees rises from 70 to 84 per cent in the ascent from the mid-level to senior-level professional ranks, while proportional representation of Asian, Hispanic/Latino and Black professionals slips by as much as half in the senior-level gradient.
However, 92 per cent of the 175 survey respondents — which collectively represent about 435,000 employees and have USD $2.4 trillion in assets under management — report that they are working to increase diversity and are re-examining approaches for evaluating merit and promoting staff. The U.S. based research firm, Ferguson Partners, conducted the survey and accompanying analysis on behalf of seven prominent industry associations representing private and listed real estate companies, developers, investment managers and institutional investors throughout North America, Europe and Asia Pacific — and concludes that participants’ willingness to disclose potentially unflattering data is evidence of their commitment to change.
“Most firms are early in their journey in adopting sustainable policies that will make an impact, and even defining what is a successful DEI outcome is difficult,” the report’s executive summary observes. “With this study acting as a benchmarking tool, we hope to provide a valuable shared approach for the industry to keep itself accountable and measure progress on this critical issue in the coming years.”
Majority of participating companies have DEI initiatives underway
Survey participants were asked to describe their DEI programs and outline the metrics they use to measure program outcomes related to recruitment, employee retention, professional development opportunities, inclusivity and pay equity. They also provided a breakdown, to the degree that was possible, of the composition of their current workforces.
Much of the resulting data is drawn from firms with employees in North America. About 40 per cent of all participants conduct business and have staff in more than one global region so that, across the entire database, 89 per cent are active in North America, 45 per cent operate in Europe, 33 per cent operate in Asia Pacific, 4 per cent operate in Latin America and 1 per cent does business in Africa and/or the Middle East.
A slightly larger share of respondents — 47 per cent — report they have formal DEI programs, while 45 per cent characterize their efforts as a looser assortment of initiatives and policies aimed at supporting diversity. One quarter of companies participating in the survey have a staff position solely dedicated to DEI. Just 8 per cent have no DEI programs.
In addition to gender and ethnicity, 70 per cent of firms with DEI policies also address sexual orientation. “Other dimensions still needing to gain traction are physical disabilities, socioeconomic backgrounds, mental health and neurodiversity,” the report notes.
Women most evident in junior and mid-level professional ranks
As with the E in ESG (environmental, social, governance), regulatory influences tend to shape the DEI path European operators are taking, with a larger quotient reporting they have formal policies and that they collect data on the gender pay gap. Nevertheless, women currently have the lowest rate of representation in the senior ranks of European-based companies. They fill just 16 per cent of executive management roles and make up just 14 per cent of board of directors, while comprising 38 per cent of the total workforce.
The data also hints that women in European companies are more likely to stall in the mid-level professional ranks, where they account for 53 per cent of positions. Stepping up to senior-level professional roles, their presence shrinks to just 23 per cent of positions.
Similarly, although women account for the majority of junior-level professionals in North America, Europe and Asia-Pacific — at 52, 55 and 54 per cent respectively — there is no way to determine what reflects new hires versus the failure of mature workers to advance. Across all survey responses, 56 per cent of participants indicate they would like to see more women in executive management, suggesting that 44 per cent are fine with the status quo. Meanwhile, a majority of respondents — 52 per cent — sees no call to increase pay equity transparency.
Data on workforce composition far from complete
Survey respondents were more likely to advocate the advancement of individuals from underrepresented groups, with 69 per cent endorsing more varied ethnic representation in their companies’ leadership. Looking at the current data, non-whites are a small fraction of the commercial real estate workforce at every level of seniority in North America.
Non-whites are disproportionately bunched in junior-level professional roles, where they make up 40 per cent of the ranks despite accounting for just 31 per cent of North American staff. This suggests that they are a growing quotient of new hires, while accounting for 16 per cent of senior-level professional positions and 15 per cent of executive management. At the board level, their presence shrinks again, to 13 per cent.
An ethnic breakdown of workforce composition is not provided for Europe and Asia Pacific, where there is more emphasis on collecting data about age. This highlights the need for more reporting with standardized metrics in order to track how stated DEI intentions flow through to outcomes. It’s expected these first survey results will underpin a benchmark, helping companies to gauge their own performance and compare it against other industry players, and all sponsoring associations are encouraging their members to participate in the 2022 survey.
For now, upwards of 60 per cent of survey respondents report they are engaging with diverse job candidates to ensure they are considered for openings, and are examining where biases exist in the hiring process and attempting to remove them. More than 90 per cent already have or plan to implement communication strategies related to DEI within the coming year.
“The scale of engagement among our members, partners and stakeholders in this survey very clearly demonstrates the strategic importance of equity, diversity and inclusion in our industry, and the urgency of removing barriers to equitable opportunities,” says Michael Brooks, chief executive officer of Canada’s REALPAC, one of the survey sponsors. “Through intentional action, we can celebrate diverse perspectives, significantly enhance our businesses and support economic prosperity.”