National Compensation Survey Reveals Positive Trends in Real Estate Industry Recovery
NEWPORT BEACH, Calif. – October 20, 2012 – RETS Associates, the premier commercial real estate recruitment and staffing firm in the western United States, continued its 12-year relationship with CEL & Associates, Inc., who specializes in providing consulting services to real estate enterprises, by jointly researching employer and candidate level analysis in conjunction with the “CEL 2012 National Real Estate Compensation Report.” This report, conducted by CEL & Associates, Inc. in 2Q/3Q 2012, gathered compensation information on nearly 100,000 real estate professionals covering 198 positions from approximately 400 public and private companies nationwide. Co-sponsored by NAIOP (the Commercial Real Estate Development Association) and NAA (the National Apartment Association), this survey is the largest and most comprehensive compensation and benefits survey in the real estate industry.
“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 U.S. in 3Q12 was very strong with approximately 100 new searches from clients,” said Jana Turner, principal of RETS Associates.
The “CEL 2012 National Real Estate Compensation Survey” (in its 23rd year) includes compensation data that covers multiple size, ownership, geographical and statistical stratifications for salary ranges, bonus payouts, merit increases, workforce hiring, performance standards, and the attraction of top talent as measured by responses from real estate companies.
Another significant finding in CEL’s overall research revealed that there is an anticipated shortage of 15,000-25,000 qualified industry professional 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, Inc.. “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.”
“Employers are taking greater efforts in retaining or hiring top talent,” said Jana Turner, a principal of RETS Associates. “These efforts include step-ups in base salary (15%+), short-term signing bonuses and/or enhanced long-term incentives. We’ve seen notable improvement from the trough!”
Highlights of the report findings and CEL’s research include:
- The forecast for 2013 assumes continued, moderate economic growth and job creation fueling increases in overall real estate demand.
- 62.7% of companies surveyed anticipated workforce hiring in 2012, versus 55.6% in 2011 with 2013 projecting a continued trend to hire.
- Many employers are accelerating the “restructuring” of their compensation plans (annualized and long-term) to attract talent.
- Salary freezes in the industry are declining as of the first quarter of 2012 and most remaining freezes are not anticipated to continue into 2013.
- Merit increases projected for 2013 range between 3% and 3.5% 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.
- Bonus payouts have almost fully returned as a component of compensation and more firms are focusing on long-term incentive programs for key employees.
- Performance standards, as defined by minimum profitability or other financial metrics, are becoming more commonplace relative to eligibility for bonus and incentive payouts.
- Approximately 35% of employers believe some of their top talent will leave as competition for outstanding performance increases.
CEL & Associates, Inc.’s survey and research measures the expectations of respondent companies in a number of categories, including top priorities, shifts in talent management, key trends, compensation budget parameters, general outlook, compensation and HR policies, turnover rates and workforce hiring, summary of benefits program offerings, long term incentive program structure, compensation trends for public and private companies, 2012 base salary trends, and 2013 salary projections.