The real estate industry is falling behind in the movement towards workplace diversity in corporate America, according to a new study.
The report, completed by FPL Associates, reveals insufficient opportunities for minorities in real estate and details some successful diversity initiatives within a few real estate companies.
“Corporate America is undergoing rapid, fundamental changes in the demographics of its employees and customers. As workplace diversity increases and minority buying power grows, it’s clear that success in tomorrow’s real estate industry requires the successful implementation of diversity initiatives,” said Bill Ferguson, co-chairman of FPL.
FPL’s study provides current perspectives and quantitative measurements of diversity in the real estate industry. “Our goal,” said Ferguson “is to create awareness of the status quo and define a path towards effectively driving new workplace initiatives.”
“Today, minority groups as a whole are the majority in several of the largest metropolitan area in the U.S. and the wage gap between women and men is narrowing rapidly. As business leaders, we must address these and other demographic shifts to ensure the success of our companies,” said Victor MacFarlane, founder and managing principal of MacFarlane Partners, a real estate investment manager specializing in urban development and redevelopment projects.
For the study, FPL examined formal diversity practices, initiatives and studies across corporate America to understand successful efforts in other industries. The firm then compiled information collected by other researchers through interviews with professionals in a broad range of industries and conducted additional interviews with leaders in real estate. Finally, FPL conducted the first-ever survey of the largest real estate firms across several sectors.
Some key findings of the diversity study include:
- 70 percent of participants believe that their CEO and/or senior leadership team are committed to diversity; however, less than half indicated that a formal role for oversight of diversity initiatives exists at their organization.
- Only 2 percent of respondents reported that African-Americans comprise 15 percent or more of their board positions, and Asian and Latino board members were even more rare.
- 92 percent of companies surveyed indicated that they currently do not align their compensation practices with the company’s diversity goals.
Pamela Puryear, an expert in organizational effectiveness and diversity and contributing author to the FPL Diversity Report, believes that organizations should view diversity as one of many organizational dynamics that must be managed in order to achieve optimal organizational performance.
“If an organization wants diversity to translate into improved organizational performance, it must develop a diversity management strategy that embraces diversity and incorporates divers perspectives,” Puryear said.
Despite the overall lack of diversity, FPL uncovered several stories of successful diversity initiatives across the spectrum of sectors examined in the study. These initiatives include increased focus on communication, recruiting at all levels, mentoring, and leadership development.
“Last year, over half the mandates we received for board searches were for candidates with diverse backgrounds,” said Ferguson. “I believe this will be our greatest contribution to the industry: the board members and senior executives we recruit become catalysts for change throughout their organizations.”
FPL Advisory Group is a family of companies focused on providing corporate and managerial advisory services to the real estate, financial services and related industries.
The report was sponsored by Cushman & Wakefield, MacFarlane Partners and Pulte Homes.
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