NEWPORT BEACH, CA—The job candidate who graduates with an advanced degree from a prestigious university is not nearly as compelling to CRE firms as someone who has direct knowledge and talent in a particular area, real estate recruiting firm RETS Associates’ principal Kent Elliott tells GlobeSt.com. The firm recently completed its fourth-annual financial-analysts survey, which surveyed more than 340 real estate financial analysts across the nation. While the survey found that a respondent that earns a master’s degree can earn between 5.6% and 9.5% higher compensation than a professional with a bachelor’s degree, the real estate industry still values experience over education. We spoke exclusively with Elliott about the survey results over time and how he interprets them.
GlobeSt.com: What are the differences between this year’s survey and last year’s?
Elliott: Last year, what stood out was that a lot of analysts were job hopping because they could make more money if they changed jobs a couple of times and can tranche up to the next level. In 2014, we saw some of that in the marketplace and in the surveys: 70% of respondents had actively pursued a new position in the previous year and had gone on two or more interviews. This year, we came to the determination that real estate rewards experience and not necessarily education. Employers will pay more for the right experience; they’re not going to pay more just because somebody has graduated from a big-name school with a big-name master’s program in real estate. Real estate is not like pharmaceuticals or consumer products, which look for somebody with a marketing degree from Anderson—real estate wants proven professionals rather than education-focused professionals. That being said, we found that those candidates that were better with financial modeling skills in Argus and Excel were the ones who had the highest compensation.
GlobeSt.com: Are you noticing any trends in the survey results over time?
Elliott: Four years into this survey, there has been a tremendous amount of hiring in the analyst segment, and it just continues. This year, we’ll continue to do more analyst searches than last year. Analysts are younger professionals and are at the beginning of their career. They may job hop more than at the end, and there are a lot of opportunities in the marketplace for them. We’re seeing first-tier markets—San Francisco, Orange County, Seattle, L.A., Denver, Dallas, DC, New York—continuing to be in demand from employers right now, regardless of the fact that it’s now mid-November.
This is the 14th year for this company, and year one, when it was just me, I remember that when we got to Thanksgiving week, things slowed down quite a bit and stayed slow in December. Hiring does typically slow down, but there have been times when there was a pronounced slowdown or no slowdown. My prediction for the next 45 days, based on the new jobs orders/searches from this week alone is that it’s not slowing down. The orders we start today, those candidates may start as early as January. (There’s a heavy incentive comp, too, beginning in December. Candidates don’t want to leave 30 to 45 days from getting that.)
GlobeSt.com: How has the importance of each factor—compensation, location and growth opportunity—changed over time?
Elliott: Compensation, growth potential and geographic location are the top three factors candidates value, and depending on where you are in your career, 1, 2 and 3 can be in a different order. In good economic cycles like we’re in right now, employers are more open to moving somebody from location A to location B. They’re more willing to pay that freight or at least consider it. From a candidate’s perspective, if you extract geographic preferences based on where they grew up, the top markets are where people want to flock to: L.A./Orange County, New York, San Francisco. These are the markets that are extremely attractive. In past cycles, you wouldn’t attract candidates to markets like Tucson or Portland in a boom period because there weren’t as many opportunities out there.
GlobeSt.com: Is formal education becoming more or less relevant to success?
Elliott: I don’t want to say that a formal education or advanced degree are less important—it provides you with connections, relationships, academic learning and certain skill sets you can’t get any other way. The top 10% of candidates from a top university with an MBA or MRED will see financial gains, but the vast majority of professionals won’t see gains as pronounced as the top 10% will. Experience is important, and education is the icing on the cake.