There has been a large increase in salaries for employees in all real estate classes in the Greater Toronto Area as companies struggle to find top talent, according to a specialist in real estate recruitment.
“Across the board this year, we’ve seen drastic changes,” said Dan McLeod, director of real estate recruitment at Hays in Toronto.
He leads a team of five recruitment consultants who cover all real estate asset classes in the GTA for clients that include Allied, Brookfield, Colliers, Oxford and Tricon.
“Coming out of the back end of the pandemic, we’ve seen a huge upsurge in salaries and that’s across the board, with companies looking to restart their building,” McLeod told RENX in an interview.
In multiresidential, for example, there has been an upturn of 25 per cent, year-over-year, as companies struggle to find maintenance technicians, managers and tradespeople.
Commercial real estate salaries also rising
Employers are having similar headaches on the commercial side. While a typical salary for an experienced building operator salary would have been $55,000 to $57,000 prior to the pandemic, it is now $65,000 to $70,000.
“It’s pretty much unheard of,” he said.
McLeod noted many real estate companies have expanded into multiresidential during the pandemic, creating an additional need for senior-level staff to oversee the asset class.
There has been a 40 per cent increase year-over-year in companies looking to fill positions such as directors of residential operations or directors of residential asset management.
Industrial real estate, which continues to become an ever-more-sought-after asset class, has been a mainstay in Hays’ recruitment efforts this year as companies that used to develop and sell industrial properties are now developing and managing their sites.
“They definitely see the benefit of keeping the asset class long-term,” he said.
Most of these businesses have now added industrial property management staff rather than using third-party firms.
Work-life balance key for employees
In January, Hays released its annual salary guide which surveyed about 4,000 employees across Canada in all job categories. It found 65 per cent of respondents were seriously considering leaving their current role.
Work-life balance topped the reasons behind employee frustration, with 55 per cent of employees feeling they are not supported. Forty per cent of employers noted staff are leaving because of compensation, yet only 23 per cent were offering pay raises to improve staff retention.
In January, a vice-president of commercial property management in the GTA could expect a salary of between $210,000 and $260,000 while a director of residential property management in the GTA could expect to earn $125,000 to $140,000, according to the 2022 Hays Salary Guide.
However, McLeod cautioned that those salaries have increased since January.
McLeod said new talent is attracted to companies that offer the hybrid or remote work model. “It’s a huge plus for candidates. About 80 per cent are looking for that type of work model where the opportunity arises.”
Work-from-home and recession fears
Administrative employees in real estate who do not necessarily need to be in the office have been productive working from home during the pandemic, McLeod noted. “If you can do the job well from home, what is the need to go to the office?”
McLeod said some candidates are happy to take salary reductions so they can work from home. He noted employees who live in places like Vaughan or Mississauga, who would otherwise need to travel downtown for work, can save a few hours of travel time daily by working from home.
Given the “nervous air of recession surrounding the market,” McLeod expected the surge of interest in multiresidential rentals and industrial to continue, resulting in the need for additional staff.
McLeod foresees many real estate firms will be looking outside the industry to add top talent that is perceived as adding value, so they will need to be creative with their offerings.
He expects salary increases across the board as real estate firms vie to maintain current staff and that the work-life balance will continue to be a key factor among employees.
With the potential for a recession looming, many employees are happy to settle in their current roles, making it harder to attract top talent, McLeod said.
Employers must provide a secure, attractive offering for potential employees with growth opportunities that will survive any potential recession.
The offerings from top-level companies will need to outpace the market to ensure they retain top talent as the market becomes tighter.