As Partners at HighView, Nicola, James and I have been recruiting in Canadian real estate, collectively for close to 40 years.
Based in Toronto and Vancouver, we consult with many of the industry’s leading real estate businesses and are trusted career advisors to an extensive network of industry professionals. This position provides us with a window into what it takes to attract, recruit, and retain the best talent in the industry.
Looking back to when I started recruiting in the early 2010’s, understanding the motivations driving career moves seemed straight forward. People wanted to progress in their careers and with that came a commensurate increase in compensation. Industry salaries were for the most part, consistent between employers and most hiring managers knew what it would take to hire an experienced candidate in their respective specialism. Vacation allowance and benefits packages were also relatively standard across the board and unless you were expected to travel to different sites during the day, you worked in an office from Monday to Friday.
From the mid to late 2010’s, housing affordability, particularly in Vancouver and Toronto began to put pressure on employers to step up compensation levels being offered to not only attract new talent but also to retain existing staff. As competition for experienced candidates grew, employers with increased compensation offerings stood the best chance to attract and retain the best talent.
If the hiring market was competitive pre-2020, the environment became supercharged as the Bank of Canada cut interest rates to stimulate the economy post pandemic. Fuelled by record low rates and confidence in the economy, most real estate related businesses were looking to grow and competition for talent intensified. From late 2021 and throughout 2022 record numbers of people changed jobs in the real estate industry. As covid restrictions kept workers from gathering, loyalties waned, and candidates took the opportunity to seek significant increases in compensation and improved working conditions/flexibility.
Recruiting during this time was interesting to say the least. Unlike the early 2010’s when motivations were more predictable, understanding what candidates were looking for during this time became much more difficult to navigate with elements like remote and hybrid working now featuring at the forefront of conversations.
In response, most organizations stepped things up, increasing compensation bands and revisiting benefits packages to ensure they were meeting the demands of the workforce. From a flexibility perspective, the situation was divided between groups that chose to stay the course and double down, articulating their values and distinct working culture and those that relented and offered up hybrid or more flexible working arrangements.
After two years of record low interest rates, in March 2022, the Bank of Canada started the first of what has now been 10 increases to its benchmark interest rate (0.25% to 5%) in an 18-month period as it attempted to wrestle with elevated inflation rates. With experts split on whether we will see any further rate increases, it is widely accepted that the economy is cooling, and higher rates will be with us for longer.
This ‘new normal’ rate environment has made for a challenging 2023 for most real estate businesses. On the residential development side, media headlines report how some developers, (relying on pre-sales) are hitting pause on project launches as they wait for more favorable market conditions. Deloitte’s recent outlook paper states expense mitigation as being the top priority for business leaders as revenue expectations continue to slide and the cost of capital and capital availability is ranked weakest among real estate fundamentals.
Management reports aside, the long-term, supply/demand fundamentals for our industry are positive and we are confident about the future. Our industry is also incredibly diverse and while one segment may be experiencing more headwinds (office), other areas remain robust, and some are experiencing huge demand.
Multi-family housing for example, has become a major national issue and as governments remove barriers and create more incentives for developers to build, professionals with a specialised focus in this asset class will continue to be in high demand.
Besides specific asset classes, there are certain specialisms including asset management, sustainability, and specialized finance and accounting roles (e.g. FP&A) that have experienced growth in 2023. As businesses look to mitigate expenses, maximize revenue, improve processes, and attempt to address pressing environmental issues, we feel confident that opportunities in these areas will remain strong.
There are several areas that are typically always in high demand including construction, property and project accounting as well as almost any role within property management and building operations.
In January, we will be releasing the Real Estate Compensation Guide 2024; the only publicly available, industry specific, compensation guide in Canada. In this guide you will find more detailed market outlooks covering strategic, operations and corporate roles across the industry.
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Are you looking to find the Best Next Hire for your real estate team or are you looking to make the Best Next Move in your career? Please reach out to one of our Partners to discuss further.