The Class Ceiling: Real Estate’s Overlooked Diversity Factor
The Bridge Group report[1] on socio-economic diversity last month revealed that the UK real estate sector is lagging significantly behind other industries, particularly in leadership roles. White males from higher socio-economic backgrounds hold more than half (51%) of senior positions, while only 14% are from lower socio-economic backgrounds (SEB).
Many of the sector’s leaders have been privately educated and, on average, 31% of employees were privately educated, compared with 6.8% nationwide. Reinforcing this ‘closed shop’ dynamic, real estate organisations often recruit from a narrow pool of universities.
Real estate is a notoriously highly connected industry, with opportunities often depending on the strength of your contacts. Equally, employees with strong cultural capital may navigate the interview process and professional environment more comfortably. Accent and language, dining and social etiquette, sporting interests and even holiday destinations are forms of cultural capital deeply tied to class.
This eco-system encourages a ‘culture fit’ bias that underpins the status quo, limiting opportunities for those from less privileged backgrounds. The Bridge Group report also uncovered that just 22% of real estate employees are from lower SEBs, compared with 39% of the UK workforce.
With socio economic diversity often the missing element from DE&I discussions, how can we best tackle this issue?
Culture-add
Instead of ‘culture fit,’ organisations should focus on ‘culture add’, recognising that homogeneous environments in real estate are limiting innovation. Leaders who challenge the norm, not reinforce it, or have at least been educated on class bias will encourage a more diverse workforce.
Widen the talent pool
Launch pro-active recruitment hubs or events in cities outside of London in a wider range of institutions, including schools, to reach candidates who may not have considered a real estate career.
SEO London and its sponsors are driving transformative change within our industry, breaking barriers and creating new opportunities for future talent. Launched in partnership with Eastdil Secured, Goldman Sachs, and Tristan Capital Partners, SEO London’s real estate programme expands opportunities for ethnic minority and low socio-economic students through school, university, and beyond.
Sponsor firms, including Blackstone, Cerberus Capital Management, Omers, QuadReal Property Group, Starwood Capital Group and Westbrook Partners provide mentoring, education, funding, and networking for participants, along with employee engagement and volunteering opportunities.
Recruitment and selection process
Use contextual recruitment processes for more junior roles to evaluate candidates in the context of their SEB, focusing on skills and potential. This encourages hiring for future capability, not just experiences or background.
Apprenticeships
Several real estate organisations, including Allsop and Savills, have created successful apprenticeship programmes as an alternative to graduate-only recruitment that encourages more candidates from lower SEBs.
CBRE’s apprenticeship scheme aims to fast-track progression for talented employees from lower-income backgrounds. CEO, Ciaran Bird, has a personal conviction in the scheme, having started his career at 16 straight from school.
Mentorship and sponsorship
Mentorship is becoming more commonplace within the sector, such as Women in Real Estate’s (WiRE) Mentorship Scheme and various mentorship programmes within organisations. Sponsorship, such as the RICS’s funding for undergraduate and postgraduate education, is seen less and may be something we see more of in the future.
The key is to supplement existing and future SEB initiatives is encouraging an organisational culture of communication and openness to address and mitigate social economic bias. Raise awareness of the issue through storytelling, challenge biases, promote your company’s values and behaviours in relation to SEB, encourage diverse voices, offer development opportunities and foster a sense of belonging.
[1] The Bridge Group: “Building for the Future: Socio-economic Diversity and Inclusion in UK Real Estate”