The Commercial Real Estate Women (CREW) Network‘s latest benchmark study shows some progress, but also some backward steps for women and members of minority communities within the commercial real estate industry.
“When diversity is recognized at the senior levels of the commercial real estate profession, that’s what’s going to change it,” CREW Network’s industry research committee co-chair Rhonda Holland said in an interview with RENX.
“Biases will be reduced, more opportunities will open up, and I believe it will strengthen the industry as a whole,” said Holland, who is the vice-president finance and group controller for Calgary-based MasterBUILT Hotels.
CREW Network was founded in 1989 and is dedicated to offering business networking, professional development, leadership opportunities and elevated connections to its 12,000 international members.
The Lawrence, Kansas-based organization recently released its fourth benchmark study — information collected from 2,930 industry professionals in the U.S., Canada and the United Kingdom — to measure progress for women over the last 15 years.
The purpose of the study is to: guide women, black, indigenous and people of colour (BIPOC), and other diverse groups of people striving to advance their careers in the industry; inform companies and managers about the values and priorities of their employees; and enhance the research and data for organizations that desire greater diversity, equity and inclusion.
While women, people of colour and members of the lesbian, gay, bisexual, transgender, queer or questioning, intersex or asexual communities are making progress, the report indicates more still needs to be made in the areas of diversity and fairness.
More younger women entering CRE
The study showed a 5.4 per cent increase in women 39 years old and younger in the industry since 2015.
“Young women coming out of college are actually choosing commercial real estate as their first and immediate career, rather than as a later career change,” said Holland, who acknowledged this as a positive step.
However, women occupy 36.7 per cent of the commercial real estate industry. This percentage hasn’t changed much over the last 15 years and indicates that, while more young women are entering the field, women in their 40s or older seem to be leaving it.
More women are occupying brokerage positions, as the number increased six per cent to 29 per cent over the past five years. Women represent 44 per cent of asset management professionals, 34 per cent of developers and 41 per cent of finance professionals.
Thirty-two per cent of women are aspiring to C-suite positions, a four per cent increase from 2015. Women under 40 were more likely to target the C-suite, but the study findings showed just nine per cent of jobs at that level are held by women.
Earnings gaps between men and women
Women continue to earn less than men. The fixed salary gap between genders in the commercial real estate industry is 10.2 per cent and the commission and bonus gap is 55.9 per cent.
“Talking about the gaps isn’t actually narrowing the gaps,” said Holland. “We’ve been talking for years about it and it’s not working.”
CREW Network reported women tend to be more risk-averse and are less likely to take 100 per cent commission-based positions.
Commissions represent the highest earning potential for commercial real estate professionals, and women aren’t accessing those opportunities nearly as much as men, according to the study.
The overall earnings gap between men and women is 34 per cent, an increase of nearly 11 per cent from 2015. The gap widens with age and years of experience, as well as when people move up the corporate ladder and achieve higher-level positions.
Women make 90 cents for every dollar men earn in fixed salaries. Black women make 85 cents, Asian women make 86 cents and Hispanic/Latino women make 80 cents for every dollar men earn.
The average entry-level compensation in commercial real estate is $62,828 for women and $70,294 for men. This nine per cent gap is wider than in 2015, when entry-level compensation was nearly level.
“There are biases, barriers to entry, general hiring practices and, honestly, sometimes it’s women’s reluctance to actually negotiate a better contract,” Holland suggested when asked why these discrepancies are still taking place.
Women feeling less satisfied in their careers
The percentage of women who reported being very satisfied with the level of success achieved in their commercial real estate careers had remained relatively stable in the prior three studies, but decreased in 2020.
While receiving lower pay and having fewer opportunities for upward mobility and less access to leadership roles than their male counterparts, women could be growing increasingly frustrated.
Increased awareness about the persistent disparities and challenges women face in the workplace could also play a role in changing the factors they consider when assessing their own success.
Workplaces lack diversity
Just 16 per cent of respondents reported that 25 per cent or more of the professionals in their workplace are BIPOC.
However, more than half reported a culture shift regarding diversity, equity and inclusion — mostly due to mandates from leadership and external pressures from the industry.
Chief changes include: policies more supportive of work/life balance; family leave and flexible hours; increased access to professional opportunities; and bias awareness training and initiatives. They had less of an impact on pay fairness.
Research has shown the inclusion of different people based on gender, race, ethnicity and sexual orientation is a business advantage.
Companies which prioritize diversity are outperforming others, with greater earnings, better governance, greater innovation and more opportunity.
Holland said if chief executive officers believe more diverse organizations are stronger, the belief and policies accompanying it will trickle down and create a strong company culture.
Leaders have to feel it’s the right thing to do, but also that it’s a way to gain a competitive advantage, she added.
“It still may be slow and may not be as fast as we want, but we have to make it go in the right direction,” said Holland.