The rental housing industry has always been fraught with challenges, even in good times such as these. One of the greatest obstacles ahead is achieving nearly five million new affordable apartments in the next 10 years, which will take a herculean effort as the industry works through the usual hurdles.
A more immediate challenge is a rental housing workforce that needs to grow to meet future needs at a time when it’s hamstrung by record-low unemployment but stay in step with evolving cultural shifts.
In the last few years, housing leaders have ushered in new strategies to not just grow employment but keep the people they have. The willingness to invest in policies and practices to help strengthen diversity and inclusion in their organizations is seen as an opportunity to attract and retain talent for the future.
The movement is also a chance to breed strong workforce cultures that ultimately enhance financial performance and separate companies from each other.
“It’s a competitive advantage,” says Betsy Feigin Befus, who is charge of the National Multifamily Housing Council’s diversity and inclusion initiative. “More apartment companies understand the importance of both diversity and inclusion to their businesses. A greater number of multifamily executives are paying attention to the data showing the value of diversity and inclusion to the bottom line.”
NMHC’s diversity and inclusion initiative began 15 years ago but recent shifts are fast-tracking the effort. Engagement by NMHC members is growing, Feigin Befus says, and strategic alliances have been formed within the real estate industry to promote diversity and inclusion at all levels of the talent pipeline. NMHC regularly offers programming, practical resources, and special networking opportunities, and will host its second annual Women’s Event in January, and a Leadership Forum on the subject in April.
Elsewhere, the Department of Housing and Urban Development, Fannie Mae and the Mortgage Bankers Association and others are devoting resources to promote diversity and inclusion.
Initiating a fundamental shift in the workforce
Creating diverse and inclusive cultures is an opportunity to initiate a fundamental shift not just in housing but overall employment.
In some circles, workforce diversity may be regarded as race and gender equity (or inequity), of which the U.S. workforce has traditionally been in imbalance. The demographics in the housing industry are no exception - 73 percent are White, 11 percent Asian, 7 percent Hispanic, 6 percent Black and 3 percent are of other people of color, according to the latest U.S. Census data. Also, the number of males working in the industry outnumber women 58-42 percent.
But it’s more.
The Department of Housing and Urban Development (HUD) defines workforce diversity as “a collection of individual attributes that together help us pursue organizational objectives efficiently and effectively. In simple terms, diversity is the mix.”
Also, HUD defines inclusion as “a set of behaviors (culture) that encourages employees to feel valued for their unique qualities and experience a sense of belonging. In simple terms, inclusion is getting the mix to work together.”
Lack of inclusion could be a reason why multifamily has traditionally experienced an excessively high turnover rate compared to the national average. While the U.S. rate hovers around 4 percent annually, the apartment sector’s mark at 33 percent projected for 2019 hasn’t changed much in the past 10 years.
The highest turnover levels projected were in onsite leasing staff (31.9 percent) and onsite maintenance (39.2 percent), according to CEL & Associates, Inc., which compiles a chart of annual apartment industry employee turnover. Onsite manager turnover was projected at 22.5 percent,
A strong organizational culture is a key to talent retention and development, says Feigin Befus. A company that demonstrates the value it places on all employees across the organization is one that has a better chance to keep employees and attract new ones. Those organizations will benefit from a more engaged staff bringing their strengths to the table.
Moving the needle by changing approaches
NMHC is at the forefront of this movement and hosted a pair of events in 2019 that addressed ways that multifamily companies can drive performance through understanding the importance of diversity and inclusion.
At its 2019 NMHC Leadership Forum on Diversity & Inclusion, more than 100 industry executives gathered for dialogue and resources to help their organizations and the industry move forward. Special speakers from beyond the industry weighed in on creating great places to work, supporting the LGBTQIA+ community and tackling gender equity in the workplace.
A panel of industry executives stressed the importance of low-hanging fruit to move the needle. Among the recommendations were crafting job descriptions to attract more women, people of color and those with diverse backgrounds. The panel also recommended developing strategic partnerships with schools to market toward students and creating policies that encourage interviewing diverse candidates and establishing oversight to ensure diversity and inclusion is considered in the hiring and talent management processes.
And, hiring managers shouldn’t put a premium on specific job experience when choosing a candidate. Candidates that show they can learn rather than just possessing a defined set of credentials are more desirable.
High-trust environments key to employee retention
Julian D. Lute, a consultant with Great Place to Work, said at the NMHC student housing conference that an inclusive organizational culture that stimulates a high-trust experience from the top of the organizational chart to the bottom is essential to growing talent.
An organization that lacks trust can’t innovate, he says, and employees don’t feel they can contribute. And when that happens it’s likely that employees will seek other jobs and leave the company.
In a study conducted by Great Place to Work, 46 percent of employees surveyed said that they believe they work in an emotionally healthy environment. Half said they worked in a low-trust environment.
Lute believes that companies can retain talent by recognizing individual effort and the value they bring to the table. The result is building a stronger workforce that can build better client relationships.
For that to work, companies have to practice what they preach with brand and company values.
“Your mission, your vision and your values are what differentiate your culture from the next,” Lute said. “The companies that do this well ‘weaponize’ those values. When they make decisions, they do it through the lens of those values.”
Driving innovation through diversity and inclusion
Multifamily companies that create more inclusive and diverse ecosystems are those that can contribute the most to the industry’s challenge of establishing 4.6 million apartment homes by 2030. With successful implementation, workforces will drive better business.
“This is so critical to the business that it will ultimately lead to better business results,” said Taiwan Brown, Vice President, Inclusion & Community Engagement at RealPage. “When there is an inclusive work environment, people feel valued and respected, they feel like their voice is heard, they feel like they have a seat at the table, they feel encouraged to give ideas if they are a part of the team.”
About a year ago, Brown took charge as RealPage launched an effort devoted to promoting education and awareness of diversity and inclusion within the organization. In the past two decades, the company has grown from two hundred employees housed in a modest office in North Texas to nearly 7,000 in more than 20 offices worldwide.
With workforces in the U.S., India, the Philippines, United Kingdom, and Spain, diverse cultures intersect.
Brown began by looking at the company’s demographic data and assembled C-suite leaders to define diversity and inclusion as it related to RealPage’s mission.
In a telling exercise, leaders were issued headsets and taken through a virtual reality simulation of a workforce devoid of diverse and inclusive values, which left most feeling like they were outcast. The experience immediately prompted questions about the company’s culture and what it needed to do to establish a diverse and inclusive environment.
“It’s a simulation of what it feels like to be excluded, and there were a lot of issues that came up,” Brown said. “What does it mean to be left out? What happens when the boss doesn’t listen to your idea and you’re not a part of the in-group? In the end, you’re mad and frustrated.
“This exercise really generates some rich dialogue.”
RealPage has since piloted the simulations with other top leaders and plans to roll out educational courses to strengthen its inclusion environment. The program addresses stereotypes and biases and offers key points employees can use for creating a more inclusive environment.
Good for the future of multifamily
Feigin Befus says establishing a diverse, inclusive culture at multifamily companies can begin with conducting a self-audit. Foremost, the initiative starts at the top with a meaningful commitment by company leaders and how they work across the organization to promote diversity and inclusion goals.
Also, learning who your employees are and what’s important to them is essential, as well as identifying company policies and practices that are equitable and inclusive and reflect the organization’s values and goals.
By doing so, multifamily will transform a workforce that ultimately ensures its future.
“Diversity and inclusion drive innovation, superior problem solving and organizational success,” Feigin Befus said. “From the Boardroom and the C-Suite to on-site teams, a diverse workforce and an inclusive culture will position the industry to address the growing demand for multifamily housing and meet the expectations of future apartment residents."