by Samantha Chalmers
The multifamily industry universally espouses support for diversity and inclusion in its workforce, but that effort is often not reflected within the leadership teams of real estate organizations.
According to a study by the Harvard Business Review, women make up 47% of the total U.S. labor force, yet they represent only 5% of the 100 richest tech billionaires, 6% of S&P 500 CEOs and 20% of the Fortune 500 board.
The numbers tell a similar story in real estate.
A 2020 CREW Network benchmark study revealed that the percentage of women in senior VP, managing director and partner level positions in commercial real estate dropped from 27% to 22% in the past five years. Women in the industry on average still make only 90 cents to every dollar men earn in fixed salaries, while Hispanic/Latinx women earn only 80 cents, comparatively.
The recent NAA webinar, Women, Diversity, Growth and Leadership in Rental Housing, took a closer look at this disparity, as well as the barriers that still exist on the path to the executive suite. Panelists fielded difficult questions and also presented avenues for advancement and better representation across all levels of the apartment industry.
Dru Armstrong, CEO of Grace Hill, said that current social movements in the U.S. have placed a spotlight on the topic of inequality following decades with little to no progress in the real estate industry.
“The Black Lives Matter movement has brought the conversation of equality forward,” Armstrong said. “But there has been no improvement in real estate in the past decade, in terms of women’s representation in leadership. This is despite the fact that we just went through the #MeToo movement, which brought a similar topic forward about equality for gender. We have to challenge ourselves to make forward progress in the next decade.”
A 2015 McKinsey report showed that companies in the top quarter for racial and ethnic diversity are 35% more likely to surpass peers in terms of profitability, and those in the top quarter for gender diversity are 15% more likely to do the same.
“If you actually execute and achieve some level of diversity across race, gender, age, geography and perspective, you have meaningfully better results,” Armstrong said. “So, I think there’s both a societal imperative and business outcome imperative.”
So, how do companies create a plan and a path to improve representation across all levels?
Charlotte Flores, vice president of human resources for BH Management, said it starts with revising recruiting and hiring practices. She said companies need to rethink where they’re posting jobs and who those postings will reach. Consider blind resume reviews to focus on skill sets rather than names or where the applicant went to college. And allow multiple leaders to make hiring decisions within each department to vary the results.
“At a basic level, ask leadership teams to define what a leader looks like,” Flores said. “You’re usually trying to conform to a standard that was typically set by white men, from a leadership perspective. You have to talk a certain way. You have to carry yourself a certain way. Change that for your company. That way you’re really focused on the talent and the skills, and not trying to apply a standard that is outdated and doesn’t work anymore.”
Once hiring practices are addressed, the best way to identify and cultivate diverse associates for advancement within the company is through mentorship and growth programs, said Jack Jones, vice president of training for Edgewood and Vantage Management.
“We’ve all met someone who mentored us in this industry, and you have to have those opportunities in order to recognize a high-potential individual,” Jones said. “Mentorship and sponsorship programs are where you’ll really get to know an executive, and where they’re able to less formally share with you how they do their jobs. The higher you go up the corporate ladder, your purview tends to widen. One of the greatest challenges is exposure to that bigger space and what matters there, rather than what matters on the ground level.”
Jones said it’s important for associates to seek out their own mentor, and emphasized that the selection doesn’t need to be based on shared demographics.
“A lot of the people who are in those executive positions are not women, are not people of color,” Jones said. “Find someone with shared interests. Associates need someone to recognize their potential, but also identify with them. Find the sweet spot where leadership’s attention and your own initiative meet.”
Jones said it’s also important for associates to have the chance to learn and grow through mistakes.
“Most learning takes place through hardship and struggle,” Jones said. “You have to have an opportunity for stretch assignments that challenge you and provide room and space to fail. Leadership needs to create safe spaces. Introduce a stretch assignment with, ‘Give it a shot.’”
Jones stressed that while it’s important to provide soft landings on stretch assignments, female associates and team members of color still have to put in the work to gain upward mobility in the company.
“You have to earn it. To show up and think that because ‘I’m black and male, and there are no black men here so I’m entitled to a position,’ or ‘There are no women here and I’m entitled to represent in the space,’ it’s not going to happen,” Jones said. “You will spend many years working your proverbial behind off before you start to see the fruit of your labor. Don’t kid yourself that just because you fit the demographic, you’re a lock.”
Companies like BH Management have already created Diversity, Equity and Inclusion (DE&I) committees to ensure that balanced representation throughout the company remains a constant priority.
“This committee pushed us to where we need to walk the talk now,” Flores said. “We’re meeting once a month to get ideas on how to funnel that message throughout the organization. We continue to ask for feedback. We try to keep a good pulse on what our associates are saying. Are we still talking about the same things six months from now? Keeping the momentum is a lot of pressure. We have to keep this at the forefront of everything, no matter what else we have on the plate in terms of strategic initiatives.”
Armstrong said companies need to remain committed to their DE&I initiatives for the long run, and not expect immediate results.
“It takes many years to move the needle. The rewards can be great, but the journey can be long, arduous, painful, tiring and expensive, so know what you’re signing up for,” Armstrong said. “With any major strategic imperative for a company, it’s a matter of doing the work and committing to it for a long period of time.”