A new study shows that compensation for commercial real estate professionals is improving, with hiring on the rise and bonuses back in play.
RETS Associates, a premier commercial real estate recruitment and staffing firm, on Wednesday released the 2012 CEL National Compensation Survey. The report gathered information from nearly 100,000 real estate professionals to determine current salary ranges, bonus payouts, merit increases, workforce hiring, performance standards and the attraction of top talent.
Among the trends identified by RETS:
– Some 62.7 percent of companies surveyed anticipated workforce hiring in 2012, compared with 55.6 percent in 2011, and 2013 projections show a continued trend to hire.
– Many employers are accelerating the restructuring of their compensation plans (annualized and long-term) to attract talent.
– Bonus payouts have almost fully returned as a component of compensation, and more firms are focusing on long-term incentive programs to retain key employees.
RETS Associates continued its 12-year relationship with CEL & Associates Inc, which specializes in providing consulting services to real estate enterprises.
“Despite a presidential election, ongoing economic uncertainty, a broad emphasis on debt reduction and the threat of a fiscal cliff, hiring for real estate positions in the western United States in the third quarter of 2012 was very strong, with approximately 100 new searches from clients,” said Jana Turner, principal of RETS Associates.
The research also revealed that there is an anticipated shortage of 15,000 to 25,000 qualified industry professionals starting in 2015.
“The retirement of Baby Boomers and the depressed hiring of young talent over the past five years has resulted in a shortage, potentially reflecting a lingering impact of the dot.com era,” said Christopher Lee, CEO of CEL & Associates.
“During this era, there was a significant decrease in the number of new entrants into real estate, as the technology industry attracted a large portion of emerging talent. As time goes on, this situation will be magnified across the industry.”
RETS’s Turner said employers “are making greater efforts in retaining or hiring top talent. These efforts include step-ups in base salary (15 percent or more), short-term signing bonuses and/or enhanced long-term incentives.”
The report said salary freezes in the industry were declining as of the first quarter of this year, and most remaining freezes are not expected to continue into 2013.
Also, merit increases projected for 2013 range between 3 percent and 3.5 percent, depending on the type of position. However, the awarding of larger merit increases — particularly to strong performers — will be used to counter the potential of losing valued employees.
About 35 percent of employers believe some of their top talent will leave as competition for outstanding performance increases.