In this article, Spencer Levy, the head of Americas research at commercial real estate services firm CBRE, says he’s not one to offer stock picking advice, but he does have opinions when it comes to his favorite sectors among public and private REITs. On top of his list are industrial and multifamily, with retail at the bottom. Where so you fall and how does that affect your hiring decisions? For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 646-873-6890.
Several large proposed REIT mergers were announced during the first quarter with pundits opining the activity isn't over. Will mergers -- small or large -- affect your business and its human capital needs? For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
by Stephanie Cook, Senior Principal, 20/20 Foresight
That question that job candidates hate and struggle with -- how much do you make? -- may no longer be asked in many places across the nation as states and municipalities are passing laws prohibiting employers from asking prospective employees their salary history.
Our clients in New York City lost their ability to ask candidates about their salary history with a law that went into effect in November 2017. If found in violation, New York City employers can be fined can be as much as $250,000. San Francisco’s "Parity In Pay" ordinance takes effect on July 1, 2018 with employers in the City by the Bay facing penalties of $100 to $500 per offense starting July 1, 2019.
In addition to those mentioned above, the states and cities that have already enacted the restriction on salary history are:
· California (in effect);
· Delaware (in effect);
· Puerto Rico (in effect);
· New Jersey (in effect for state agencies only);
· New York (in effect for state agencies only);
· Chicago (in effect for city agencies only);
· Louisville (in effect for city agencies only);
· New Orleans (in effect for city agencies and employees of contractors who work for the city only);
· Pittsburgh (in effect for city agencies only);
· Albany County, NY (in effect);
· Westchester County (in effect);
· Connecticut (takes effect Jan 1, 2019);
· Massachusetts (takes effect in July 2018);
· Oregon (takes effect in January 2019);
· Vermont (takes effect July 1, 2018); and
· Philadelphia (passed, but being fought in court by the Chamber of Commerce for Greater Philadelphia)
Meanwhile, legislatures in Michigan and Wisconsin passed measures prohibiting local jurisdictions from banning pay history inquiries and the governors of Illinois and Minnesota vetoed bills that banned the questions from being asked by employers in their states.
Amazon Weighs In
Preemption language laws brought forward in Washington and Mississippi were voted down. But, tackling the issue head-on, Amazon, one of the largest employers in Washington, announced in January that recruiters and interviewers working on its behalf can no longer ask interviewees what they made at their last job or consider their past pay. With 30,000 employees in California where the law is in effect and thousands in other jurisdictions nationwide, Amazon’s company-wide policy makes sense for them and was reflected in a statement released by the company that said the move is "in response" to changes in city and state law.
Advocates behind the new laws believe that because of historical salary inequity between the sexes, demanding a salary history keeps women locked in a cycle of lower pay than men. According to the Institute for Women's Policy Research, in 2017 the ratio of women’s to men’s median weekly full-time earnings was 81.8 percent. Interestingly, the Harvard Business Review published a study in 2017 that found that women who were asked and refused to give information about their salary history were offered less than women who did disclose it. Conversely, men received a higher salary when they refused to answer the question than did the candidates who provided salary history.
As legislatures and local governments have been considering laws, the U.S. Court of Appeals for the 9th Circuit determined that considering prior compensation when setting a worker’s pay perpetuates gender disparities and defies the spirit of the Equal Pay Act. The opinion says, “Before this decision, our law was unclear whether an employer could consider prior salary, either alone or in combination with other factors, when setting its employees’ salaries. We now hold that prior salary alone or in combination with other factors cannot justify a wage differential.”
Some human resources and recruiting professionals believe that with the need for employees to continually add new competencies to their skill sets, going on past history alone is unfair to candidates and their skills. There also is the fact that we are seeing many more job seekers who see salary as just one part of the compensation equation and are willing to sacrifice pay for more-flexible schedules, the opportunity to work remotely, an easier commute or other benefits they find key to job satisfaction.
Offering a bit of leeway, while the laws block employers from asking applicants about salary history in interviews or on applications, job applicants are not prohibited from providing their salary history on their own. Also, in some jurisdictions, employers still are allowed to ask applicants the salary range they expect for the roles and responsibilities of the position there are seeking.
Amid all this activity, we have found that from an employer perspective, the patchwork of regulations is confusing and complicates the hiring process. But, whether passed piecemeal across the nation or if a federal law is enacted, the primary question remains: Will eliminating salary history questions assist in solving the pay inequity between men and women?
As a senior principal in an executive search firm who deals with salary issues on a daily basis while counseling employers and job candidates, I have concerns on unintended consequences of these laws and how they will affect the hiring process:
· When a prospective employer cannot determine a candidate’s current salary, will the initial offer be lower than it might have been had it been revealed?
· If they can’t ask about previous pay levels, will this cause an employer to ultimately pay less, rather than more had they had the knowledge?
· Could it be possible that these laws will diminish, not enhance, the chances for parity in pay between the sexes?
Answers to those questions are speculative and debatable at this point as the laws are recent and most haven’t been implemented.
As we work with our clients to help them navigate the confusion resulting from these new laws being passed and enforced piecemeal across the nation, we are counseling them that:
· Employers may need to alter their mindset about compensation and negotiation;
· As the ability to determine what applicants are earning becomes less available, employers should pay even more attention to the experience, aptitude and skill sets of candidates and assessing how relevant they are to the job being filled;
· They should consider conducting more frequent competitive market analyses and using the data to set salary ranges for each position and consider sharing pay bands with applicants;
· Clients may want to opt to ask applicants what their salary expectations are early on in the process. The answer can help screen out candidates whose salary demands are too far outside of the range of what they are willing to offer; and
· Clients with operations in several states and cities should consider not waiting to alter their hiring policies simply because a certain state or city has not outlawed salary history questions.
Know that with or without salary history data, on behalf of our clients we will continue to conduct respectful salary negotiations with both parties having full knowledge of the salary offer and the salary request.
Rising interest rates have seemingly ended a seven-year rally for REITs, but there remain pockets of strength, according to a REIT analyst with Sandler O'Neill + Partners quoted in this article. REIT senior executives often turn to us when looking for professionals for their teams. For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 646-873-6890.
News for mall and shopping center space leased to retailers isn't good -- it "fell to its lightest level in six years in the first quarter of 2018 as retailers continued to focus on their top-performing locations and shed marginal stores, with announced store closures totaling nearly 100 million square feet so far this year alone." Has the disruption in the retail real estate sector made you rethink the make-up of your team? Talk it over with our experts.
According to Reuters, "The first significant adjustment to post-crisis U.S. financial regulation, passed on Tuesday, is not going to unleash financial Gomorrah...Congress’s tweak to the 2010 Dodd-Frank financial rules mostly eases restrictions on small and 'community' banks, allowing them to make mortgages more easily and loosening some troublesome red tape." Does this good news make you more confident in adding to your senior team? For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 646-873-6890.
With U.S. unemployment falling to its lowest level in 17 years, this Forbes contributor explores how two major commercial real estate types, office and industrial, could be affected. Are you are a senior executive determining who you need in the c-suite with you? For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
Do you think the deal between Prologis and DCT indicates strong demand for industrial assets? This article has observations that maintain the deal could be the beginning of a barrage of M&A activity in the industrial REIT sector. Do you need to add the right staff in advance of any movement? For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
2017 was an excellent year for asset managers with both robust net inflows and great fund performance. However there are concerns over “rising costs and growing regulatory and compliance pressures,” according to two new reports covered in the following article. Solutions offered by Boston Consulting Group are to choose between becoming more niche “or look to M&A to try to address your growth opportunities. What you are seeing is that the big are getting even bigger and that is placing even more strain on the middle managers.” Are you are middle manager determining who you need in the executive suite with you? For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
CoStar Group is out with the news that more than 90 million square feet of retail space scheduled to hit the market in this year. As first quarter results are released by REITs we have a window into whether or not progress is being made in the industry. For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
Should REITs use the new U.S. tax law as an incentive to abandon their tax-free structure to satisfy capital needs, or is it best to stick with a status that provides entry to a special set of investors? According to this article, Third Avenue Real Estate Value Fund portfolio managers Jason Wolf and Ryan Dobratz argue in a letter that “some U.S. REITs should consider converting to a regular corporation, known as a C corp, to ‘maximize the value for shareholders over the long term.’” Leadership of REITs often turn to us when looking for executives to their teams. For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 646-873-6890.
According to two firms, real estate investment sales volume came in at approximately $115 billion in the first quarter. This adds up to a 10 percent year-over-year decline, according to CoStar. However, Real Capital Analytics maintains the data show a five percent year-over-year increase. See who is right – or if they both are -- in the following article. Will either scenario impact staffing plans at your firm? Talk it over with us and get more information on our executive search services in real estate and financial services at www.2020-4.com or 708-246-2100.
In this article that covers core commercial real estate sectors, a private equity fund manager "divides them into the 'basic food groups' — office, retail, industrial and hospitality." What investors are hungry for and what they are nibbling at is covered. For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
JLL Economist Walter Kemmsies opines in this article on how new tariffs on raw steel and aluminum could impact the U.S. economy and commercial real estate. Keeping up-to-date on current events and trends affect our clients is just one hallmark of 20/20 Foresight. For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
Many panelists at the 23rd Annual REIT Symposium, hosted by New York University’s Schack Institute of Real Estate, shared their thoughts on the reasons behind the NAV gap trends. See some key takeaways from the event in this article. For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 646-873-6890.
Named as one of America's Best Executive Recruitment Firms for Second Year
CHICAGO, April, 2018 – 20/20 Foresight Executive Search, a retained executive search firm specializing in the real estate, financial and service industries, on April 9 was ranked #15 by Forbes on its list of “America's Best Executive Recruitment Firms 2018.”
“We are honored to have been named as one of the nation’s top 15 executive recruiting firms,” stated Bob Cavoto, managing principal and founder, 20/20 Foresight Executive Search. “During our 20-year history we have continually striven to ensure we exceed our client’s expectations. Based on the belief that a strong recruiter supported by a firm with the right systems, processes, expertise and fee structures can have a powerful impact for clients, we have carefully and deliberately built and nurtured the teams and resources needed to deliver for our clients.”
According to Cavoto, among the attributes and differentiating factors that set 20/20 Foresight apart are:
· Each 20/20 Foresight consultant not only has working experience in the industries it serves, but also has extensive experience in recruiting.
· Consultants follow a proven executive search and candidate evaluation process designed to source several qualified candidates. Additionally, its consultants document the entire search process and share it with clients.
· An online database that is among the best in the industry with more than 50,000 companies and 200,000 candidates.
· 20/20 Foresight is a “hybrid retainer” search firm which requires a small retainer upfront with the remainder of the fee due only when a candidate is hired by the client.
· It stands behind its work by providing a one-year guarantee for all candidates. For “C” level searches, the guarantee period is two years.
About the List
In developing the ranking of "America’s Best Recruiting Firms," Forbes writes that it partnered with Statista. The broad field of recruitment firms was divided into two main categories, Executive Search, which includes firms that place executives in positions with more than $100,000 per year in income, and Professional Search, representing firms who work filling professional and specialist positions that pay up to $100,000 income per year.
According to Statista, the ranking in these categories were based on two surveys:
· A client survey including 4,500 candidates and HR-managers who were clients of recruitment firms within the last three years; and
· A survey of 30,000 external recruiters from recruiting firms who were invited, as experts, to share their market insights.
The surveys took place between mid-December 2017 and mid-February 2018. Each respondent could name up to ten recruiting firms per category. Providing a recommendation was not mandatory and an auto-complete function helped the respondent to select a recruiting firm. Respondents also were able to recommend any recruiting firm which did not appear in the auto-complete list. In total, 6,500 respondents took this year’s surveys with more than 14,500 nominations of recruiting firms.
To learn more about the Forbes Lists of America's Best Recruiting Firms 2017, click here.
A study of 77 metropolitan areas by real-estate data firm Reis Inc., discovered that "empty space in regional shopping malls reached a six-year high in the first quarter, adding further stress to regions being hit by a retail earthquake that is shaking up the job market across the U.S." Are you making adjustments to your team to address this? If so, contact us for more information on our executive search services in real estate and financial services at www.2020-4.com or 708-246-2100.
We are honored to have been named by Forbes as one of the nation’s top 15 executive recruiting firms in a list published today. During our 20-year history we have continually striven to ensure we exceed our client’s expectations. This honor demonstrates that we have met that goal and inspires us to work even harder to ensure client satisfaction.
For more information on our executive search services in real estate and financial services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.
CBRE's newly released Global Investor Intentions Survey 2018 shows that, "Investors are taking advantage of the current strength of the market to diversify and make necessary changes to their portfolios" with industrial and logistics the asset class generating the most interest. If you are making changes and need the right executives to achieve your goals, consider our our executive search services in real estate and financial services. You may contact us at www.2020-4.com or 708-246-2100.
By Glen Esnard, Senior Principal, 20/20 Foresight
If talent is your most critical asset, how do you choose your executive search firm?
We win a lot of executive search assignments based on relationships. We also loose now and then based on relationships.
We seldom see decisions to hire a search firm based on a thorough review of capabilities in a competitive “bake off.”
We find this surprising given most C-Suite executives would place “recruitment, retention and development of key talent” in their top three responsibilities. We also find it surprising given that all recruiting firms are definitely not created equal.
Now, while we can’t alter an executive’s selection style, we do annually assess our industry and the competitive differentiators, other than relationships, that clients find most critical delivering the desired result -- more qualified candidates who remain with the company once hired.
In our assessment we focus on operational capabilities or qualities. We exclude what we call “proof statements” such as references, client testimonials and peer review. Their intent is to validate, important, but they are not hard performance criteria.
Year in, year out, we find the same criteria. While the order may fluctuate bit the factors remain. The top five criteria are:
There are, as you might expect, many nuances to those criteria.
Sourcing process: Would it be surprising to learn many recruiting firms with very disciplined, rigorous processes haven’t changed them substantially with the advent of technology? Many use technology simply to drive their old practice, to narrow, from tens of thousands to a large handful, potential candidates based on “tags” associated with candidates. Then they call, or an assistant calls, the filtered group.
This can work only so long as A) the tags on each candidate are accurately spelled out by the intern responsible and B) their database includes all possible candidates. There are very real stories of a “top three” candidate for a position not even contacted for an identical position by the same recruiter weeks later because the sort was ineffective. Technology should drive a broader reach, not simply a faster winnowing.
Our online database is the best in the industry. The 20/20 Foresight team has access to more than 50,000 companies and 200,000 candidates and inspects the lists generated for each search carefully before placing any calls.
Industry Expertise: I am reminded of the family estate attorney who, when asked for a real estate attorney reference responded, “Oh, no problem. I can do that.” Recruiters can be very similar. Specialization is important. Ask yourself one pointed question. Is your recruiter’s expertise based on tenure as a recruiter or a blend of “been there done that” industry expertise combined with recruitment experience? Has he or she walked in your shoes?
Each 20/20 Foresight consultant not only has working experience in the industries we serve, but also has extensive experience in recruiting.
Personalized Service: Simply, who is really doing the work? Your recruiter is an extension of your firm, a representative who directly reflects on the quality, brand and reputation of your firm. Who’s really talking to the candidates? What does that mean for your firm’s brand and ability to attract talent?
We follow a proven executive search and candidate evaluation process designed to source several qualified candidates. Additionally, our consultants document the entire search process and share it with our clients.
Fee Structure: Most frequently fees are viewed as the amount paid. We see fees paid as less significant than setting a fee structure that demands performance. We grew up in the real estate business. We understand “broker risk” in transaction compensation. There is no reason recruiters shouldn’t take transaction or closing risk.
20/20 Foresight is a “hybrid retainer” search firm. We require a small retainer upfront. The remainder of the fee is due only when we find a candidate that is hired by the client.
Guarantees: This may be the most underappreciated factor in the survey. Everyone gives guarantees, essentially refiling the position for free if the employee leaves or is terminated within a certain time frame. The term of guarantee is the best measure of confidence a firm has in its own performance.
At 20/20 Foresight, we stand behind our work by providing a one-year guarantee for all candidates. For “C” level searches, the guarantee period is two years.
Durable success in your firm is driven by the quality, commitment and fit of talent in the organization. A strong recruiter supported by a firm with the right systems, processes, expertise and fee structures can have a powerful impact.
For more information on U.S. and international executive search services, contact 20/20 Foresight at www.2020-4.com or 708-246-2100.