Market size, demographics, and candidate ‘stickiness’ are key factors in building an effective team in the current market.
By Kent Elliott
Shifting demographics and migration patterns are driving demand for multifamily housing in markets throughout the country. The result? A rapid ramp-up of hiring needs in markets where talent pools are still in flux.
Cities such as Denver, Phoenix, Salt Lake City, Seattle, and Charlotte, North Carolina, have attracted major population growth and investment in the past 18 months, presenting a new challenge for multifamily executives eyeing these growing markets: where to find the right talent.
Today’s executives and hiring managers must consider a host of evolving nuances in growing markets, such as:
- Do I recruit locally, regionally, or nationally?
- How can I best navigate my changing talent pool?
- How can I entice candidates to relocate or find out if remote work or frequent travel are feasible?
- How can I identify leaders with the skills to establish a presence in the growing markets where I foresee strong growth?
Here are three key strategies to building strong teams for multifamily firms eyeing growth markets:
- Consider the Market Size.
Generally speaking, population size helps determine how deep the talent pool is in any particular market. MSAs that are smaller in size than the top 20 markets typically have much more shallow talent pools. This means it may be more difficult to find the right candidate locally to lead a team in these markets.
Rather than settling for a less-than-ideal candidate who happens to already live in the area where the company is looking to grow, a more effective strategy is to expand the search to enable a better fit.
In smaller MSAs, this involves casting a wider net or potentially relocating a current or prospective team member. In both cases, employers must ensure that the candidate is fully on board with moving closer to where the job is (more on this later).
Considering the size of a target market can help multifamily companies determine how broad their search should be and whether relocation should be on the table to fill an executive role.
- Examine the Demographics.
Market size isn’t the only deciding factor in staffing a new growth market team. Just because an MSA has a hefty population doesn’t guarantee that it has a deep enough talent pool for the positions a multifamily firm needs to fill. Even among the larger markets, examining the demographics is critical.
For example, the Phoenix metro area is the 10th largest market in the country at nearly 5 million people and growing. At first glance, it may seem to hold ample talent to fill a multifamily executive role. But, upon closer inspection, we see that Phoenix is an aging market as it increasingly attracts retirees from other parts of the country. This considerably narrows the number of candidates seeking a position with a multifamily firm and decreases the likelihood of finding someone with the necessary skills. Based on this, while Phoenix is a growing and certainly viable region, it may not be quite as strong as its size indicates.
Examining a market’s population demographics—including age, education level, income level, and growth rate over time—can help multifamily firms more accurately pin down the size of the talent pool in that market and better target their search. A strong executive search firm can help companies complete this research and make sense of it.
- Before Offering a Relocation, Determine the Candidate’s “Stickiness.”
Relocating someone for a job brings up a host of issues for employers. Will the candidate be happy moving to a new city? If they are married and have children, will their family be happy there? Are they likely to leave the company if they are unhappy with the relocation?
There are certain elements that increase job retention rate following a relocation. We categorize this as a candidate’s “stickiness” factor. Stickiness is greatest when the seeker is purposely and actively looking for a job in that market—perhaps their elderly parents live there, they are originally from the area, or they are ready to shift to the lifestyle that market offers. Conversely, stickiness is lowest among “job chasers” who will say yes to any offer or, for example, “once visited the area on vacation with their family and liked it.”
To combat this, multifamily firms should strongly consider relocating candidates who have a solid reason to move to the growth market where they are hiring. These are the people who are most likely to adapt well to the move, thrive in their new environment, and be committed to the long-term success of the company. Experienced recruiters keep track of such candidates for the purpose of facilitating the interviewing, hiring, and onboarding process for their clients.
As people are drawn to new growth and in-migration markets, particularly in the Southeast and Mountain states, there is a tremendous opportunity for multifamily companies to attract the right mix of executive talent. When developing a hiring plan for a growing market, multifamily firms that consider market size and demographics and track their candidates’ “stickiness” factors will be best positioned for success in executive leadership, ultimately delivering the strong long-term growth they seek.
Kent Elliot is a Principal at RETS Associates, one of the nation’s leading real estate executive search firms specializing in connecting today’s companies with valuable talent to deliver long-term profitability. With a proprietary database of more than 50,000 experienced candidates, RETS helps industry leaders find powerful executive positions, while also helping global, national, and regional real estate companies strategically recruit and hire both permanent and interim employees. For more information, contact firstname.lastname@example.org