Cultural Crossroads: As Corporate America Grows More Diverse, the Real Estate Industry Follows Suit
Mirel, Diana, Journal of Property Management
As recent as 10 years ago many major corporations' workforces were dominated by white males. Today, however, the ethnic and gender makeup of the workforce is evolving as the number of minorities in the United States increases.
In 2005, the nation's minority population totaled 98 million or 33 percent of the country's 296.4 million residents, according to U.S. Census Bureau information.
As corporate America diversifies, corporate leadership is beginning to follow the trend. The real estate industry, however, is lagging behind: Less than 1 percent of the more than 100,000 people employed in the real estate industry are black, according to information from the Real Estate Executive Council, a national minority real estate consortium.
The industry is not ignoring the issue. Diversity has become an industry watchword, and real estate management companies are trying to catch up to the rest of the country's businesses.
"People say real estate is the last faction where, essentially, the walls have to come down," said Ron Whitley, chief diversity officer at Cushman & Wakefield, an international real estate services firm based in New York. "If you look back on the history of the industry, it has always been almost a closed industry in terms of networking and relationship building. That is starting to change, but that change is happening very slowly."
CHANGING FACE OF REAL ESTATE
Albeit a slow shift, the real estate industry has begun paying attention to diversifying the profession because of a sweeping demographic transformation in the U.S. workforce.
The white, working-age population is projected to decline from 82 percent of the workforce in 1980 to 63 percent in 2020, according to information from the National Center for Public Policy and Higher Education. During the same period, the minority portion of the workforce is projected to double. The Hispanic and Latino portion alone is projected to almost triple.
As the workforce changes, so does the clientele. Thus, many businesses recognize a diverse workforce is necessary to better serve existing clients and target new markets. A recent University of Illinois at Chicago study found companies with high diversity attracted almost 50 percent more customers than companies with low diversity.
"It is important to note our clients' faces are changing rapidly," said Heidi Stout, marketing manager for North America at Colliers International, a worldwide commercial real estate organization with U.S. headquarters in Boston. "Our clients [are] looking across the table at people, and they want to see people who reflect them. They want to see a variety of ages, genders and ethnicities."
MORE DIVERSITY, MORE INCOME
The University of Illinois at Chicago study also found companies with a racially diverse workforce tended to generate better financial results.
The average sales revenues of organizations with low racial diversity were approximately $3.1 million, compared to $3.9 million for those with medium diversity and $5.7 million for those with high diversity. Racially diverse companies were also more likely to report higher-than-average market shares and profitability.
Along with financial benefits, increasing diversity gives companies a competitive edge in strategic planning, industry experts said. Adding different opinions and world views into the mix brings new opportunities and alternative solutions to the surface.
"If you have five white males in a room discussing a deal or an opportunity, I think there is some truth to the fact ... concepts may be similar," Whitley said. "If you add diversity--whether through gender or ethnicity--to that process, the product is really going to come out better and stronger."
BREAKING THROUGH BARRIERS
To increase diversity, corporations have focused on recruiting efforts to attract minority candidates. …