psd’s View of Market Trends in the Real Estate Sector in the First Six Months of 2023

01/06/2023

Peter Hardy, Managing Director of psd’s Property & Construction, picks out the current real estate sector trends in the first half of 2023 and what it means for both clients and candidates.

The Property Recruitment market has experienced fewer openings in H1 2023 compared to the comparable period last year. There is a general sense that market conditions are improving and that we will see a small increase in the number of roles out there over the next few months. Within the core dynamic sectors of offices, retail and industrial, recruitment is steady. Residential recruitment is very limited and there have unfortunately been several redundancies from some of the larger house builders. It is hoped that a combination of increased bank lending, planning reforms and discussions around green belt development will stimulate activity in a sector which is traditionally challenging to recruit into. 

We are often asked if there are people moving jobs, what is happening with salaries, how businesses are operating their recruitment processes and what skills employers are seeking.

One of the primary reasons why candidates may be hesitant to switch jobs is due to concerns around job security. They may feel that their current job provides a level of stability that they may not find elsewhere, and they may be worried about the risks associated with starting a new job. Recruitment processes should maintain momentum, be inclusive and offer candidates an insight into the prospective employers’ culture. Despite all of this, counter offers are a constant danger and where possible, there should be a reserve candidate as backup.  

What are candidates looking for?

  • Competitive Compensation: Offer competitive salaries that align with industry standards. Conduct market research to ensure your compensation packages are attractive to candidates.
  • Benefits and Perks: Provide a comprehensive benefits package that goes beyond salary, including health insurance, pensions, flexible work arrangements, paid time off, and additional perks like gym memberships or commuter benefits.
  • Career Growth Opportunities: Emphasise opportunities for career advancement, professional development, and skill-building within your organization. Outline clear career paths and provide resources for employees to enhance their skills and progress in their careers.
  • Company Culture: Promote a positive and inclusive company culture that values diversity, teamwork, and employee well-being. Highlight any unique aspects of your culture, such as team-building activities, social events, or initiatives that contribute to work-life balance.
  • Flexible Work Options: Offer flexibility in work arrangements, such as remote work opportunities or flexible hours. This can be particularly attractive to candidates seeking work-life balance or those dealing with long commutes.
  • Professional Development Opportunities: Sponsor or support employees in attending industry conferences, workshops, or training programs. Show a commitment to investing in employee growth and providing opportunities for learning and development.  
  • Positive Candidate Experience: Ensure a smooth and positive recruitment process for candidates. Communicate promptly, provide feedback, and create a welcoming and informative interview experience. A positive impression can help attract and retain top talent. Make sure recruiters are aligned and providing the best possible candidate feedback.

What are businesses seeking?

  • Diversity and Inclusion: The real estate industry has been placing more emphasis on diversity and inclusion in recruitment efforts. Employers are actively seeking to diversify their workforce by recruiting individuals from different backgrounds, ethnicities, and genders. Initiatives such as unconscious bias training, diverse candidate sourcing strategies, and inclusive recruitment practices have gained traction.
  • Skills in Technology and Data: With the increasing importance of technology and data in the real estate sector, employers are seeking professionals with skills in areas such as data analysis, artificial intelligence, machine learning, and automation. Candidates with expertise in Prop-tech (property technology) and digital marketing have become particularly valuable.
  • Sustainability and Green Practices: There is a growing focus on sustainability and green practices in the real estate industry. Candidates with knowledge of sustainability initiatives, energy efficiency, and renewable energy are in high demand. Employers are increasingly looking for professionals who can contribute to environmentally friendly real estate projects and developments.
  • Soft Skills and Relationship Building: While technical skills remain important, employers value candidates with strong interpersonal and communication skills. Building and maintaining relationships with clients, investors, and stakeholders is crucial in real estate, and professionals who possess excellent negotiation, networking, and relationship-building skills are highly sought after.
  • Continuous Learning and Professional Development: Real estate professionals are expected to stay updated with industry trends, regulations, and market dynamics. Employers often seek candidates who demonstrate a commitment to continuous learning and professional development. Professional qualifications and certifications can enhance career prospects.
  • Expertise: In recent months, there has been a growing demand for professionals with expertise in areas such as property management, leasing, and development. With the ongoing digital transformation, there is also a need for professionals who can leverage technology to improve efficiency and productivity in the sector.
  • Sustainability: Furthermore, there has been an increased focus on sustainability and environmentally-friendly office buildings in London, with developers and investors seeking to improve the energy efficiency of buildings and reduce their carbon footprint.

What is happening with remuneration?

  • Supply and Demand Dynamics: Although there are not a huge number of roles out there, there are also not many job seekers, for the reasons above (other than housebuilding specialists).  There is high demand for uber skilled professionals, particularly in areas such as property investment, development, asset management, and real estate finance. The limited supply of qualified candidates has contributed to upward pressure on salaries.  Candidates are moving for @ 10-15% base increases. Economic growth and investment activity can influence salary trends as companies compete for talent to meet market demands.
  • Specialised Skills: Roles that require specialised skills, such as real estate investment analysts, development managers, or specialists in Prop-tech and data analytics, have been in demand. Professionals with these sought-after skills often command higher salaries.
  • Location Factors: Salaries in London tend to be higher compared to other regions in the UK, considering the higher living costs and the concentration of major real estate firms and investment opportunities in the city.

All in all there is light at the end of the tunnel for the sector. There are a number of clients who are seeing the current market inertia as an opportunity and we see this as a reminder that at all times in real estate there are organisations driving the sector on.

If you want to discuss issues around resourcing strategy, remuneration structures and the demand and supply question, then please do contact Peter Hardy, Managing Director, psd at peter.hardy@psdgroup.com or call him on 020 7970 9701.

About

Peter Hardy

Managing DirectorProperty & Construction

Peter leads psd’s Property & ConstructionBanking & Financial Services and Consulting sectors, specialising in senior leadership and board level roles.