Multifamily Industry Can Help Create Path Forward on Inclusion
The multifamily industry’s operations teams are some of the most diverse workforces in the U.S. However, as with many industries, it’s readily apparent at the higher C-Suite and executive leadership positions that the industry’s hierarchy predominantly consists of one demographic.
According to the “2020 CREW Network Benchmark Study: Gender and Diversity in Commercial Real Estate,” published at the beginning of September, the number of women in the C-suite has stayed consistent at 9% since 2010. In addition, approximately 60% of respondents to the study, which focused on diversity and inclusion, reported that their workplace is “not very” or “not at all” diverse.
“We are calling on executives who can affect change to take this study seriously and take action in their company and in the industry,” says Wendy MannCREW Network CEO Wendy Mann. “CREW Network remains committed to creating a more diverse, equal and inclusive industry—but we can’t do it alone. Industry leaders must address these issues as a business imperative—and take action now to make this important investment in our companies, our employees, and the future of our industry to remain a competitive and attractive employer.”
A Wells Fargo analysis of 165 equity REITs found that companies with more women on their boards achieved higher average price and total returns than those with no female representation, up to 2.33 percentage points. A study by Boston Consulting Group discovered that companies with management teams with above-average diversity produced 19% higher revenues. And according to McKinsey Research, gender diversity is correlated with both profitability and value creation. The same research ties profitability to higher levels of ethnic and cultural diversity, as well.
So how can multifamily create a pathway for advancement and inclusion? It’s a seemingly daunting task, but multifamily has evolved on its own over time.
“Things have changed dramatically since I entered the multifamily space almost 30 years ago,” says Kellie Hughes, senior vice president of operations for Mill Creek Residential. “At the community level, the majority of office associates were female, and the majority of service associates were male. Now, the community teams are as diverse as our customers in gender and ethnicity.”
The next step for multifamily is to hire, retain, develop, and promote the next generation of leaders. This requires organizations to understand their current workforce, identify areas in which they are performing well, in addition to identifying areas in which they might want to improve. Many companies, such as Mill Creek Residential, are actively working to make diversity and inclusion a top priority. Once organizations have determined their goals, they can develop a strategy for change.
One way to do this is to understand and train around bias awareness.
“I don’t believe that the lack of women or minorities in executive positions is purposeful, it’s just human nature,” Hughes says. “In many cases we tend to hire people who are like us. As an industry, we need to make a cognizant decision to create a diverse culture at all levels of the organization, and unconscious bias awareness can help in this area.”
To Hughes’ point, the McKinsey report found that ethnically diverse companies are 35% more likely to outperform their competition. Additionally, a Harvard Business Review study correlating diversity in leadership with market outcomes found that companies with representative diversity are 70% more likely to capture a new market.
According to Jerry Williams, vice president of human resources for Mill Creek Residential, multifamily can learn from the model of post-millennium businesses.
“Take a look at startups in the last 20 years,” he says. “They tend to focus on equality and inclusion. They recognize hiring gaps and develop plans to address them. They aim to improve the work environment and work experience for all employees.”
Williams believes organizations should create a strategy to improve categories that are underrepresented.
“Advertise your company at historically black colleges and universities and bring in more women and people of color from our major universities for an opportunity to interview and receive an employment offer,” Williams says. “Make a conscientious effort to recruit minority and female candidates for employment and internships. It’s about exposure and opportunity. Require that all recruiters used for presenting candidates for hire to your company include a representative number of qualified women and minority candidates for job openings.”
Williams also encourages multifamily organizations to post all job openings within the company and encourage qualified minority hiring and include an incentive for doing so. Organizations should be transparent about the company’s Equal Employment Opportunity status across the company’s leadership team, he says, and members of the executive team should be informed of how well the company meets minority and women hiring practices and challenge the status quo when necessary.
According to Jonathan Jeans, vice president of operations for B.HOM Student Living, the industry’s mentorship and development programs could better address the specific obstacles people of color have historically faced when navigating corporate America. A major obstacle for team members who are people of color, he says, is the lack of mentorship and development programs that are facilitated and championed by people of color.
“There aren’t people of color at the executive level to mentor and facilitate a development program geared toward assisting the advancement of people of color,” Jeans says. “It is important to have diverse people of color represented at the executive level, and that those individuals are brought into the program to offer guidance to team members seeking additional professional advancement within an organization.”
As companies are becoming more diversified in the entry to midlevel management positions, it is even more motivating for people of color to see a potential path toward the executive level by using executive representation as a motivating factor, Jeans says.
In order to take significant steps to improve leadership opportunities for women and minorities, the industry must provide mentoring and training to broaden their skill sets. Offering opportunities to interact with senior management and coaching associates on how to present themselves in a leadership situation is also important. When doing so, industry leaders should remain aware of the unique challenges facing women and minorities, according to Hughes. For instance, women are often more reluctant to ask for promotions.