No-one would dispute that 2020 has been a year full of challenges and surprises. Covid-19 changed the scope of recruiting almost overnight. For many clients I work with, they have had to adapt. Despite the recent green light being given to vaccines Pfizer-BioNTech and AstraZeneca-Oxford, we may still face challenges in the year ahead.
Lockdown and the changing face of recruitment
Lockdown brought many clients to the same level where recruitment plans were frozen. Client-side and consultancy-side roles I was recruiting for were put on hold, with some making redundancies by the Summer; some are continuing to review staffing needs into the new year. The government's furlough schemes and business rates relief in some sectors helped some of my clients stay afloat despite an uncertain future amid talk of a possible recession.
Winners and losers
Industrial and alternative sectors such as healthcare, data centres, student accommodation, and science parks have enjoyed a massive boost as surging online retail sales took hold and investors looked to alternative assets instead of core. Traditionally, core assets have been the go-to asset classes for many investors. However, in more recent times, investors look to broaden portfolios that can offer asset diversification and enhanced risk-adjusted returns that are no longer available from the more "vanilla" asset classes such as offices or retail. Industrial take-up across Europe has increased substantially this year, with a 10% increase on this stage's equivalent level last year in the UK alone (Savills). Hospitals and healthcare settings in the private sector continue to thrive, and demand for D1 assets is exceptionally resilient. Growing demand for space in these areas has presented some exciting acquisitions, agency, and asset management opportunities. Some of the candidates who have benefitted were previously in the retail sector and were willing to move sectors to rescue jobs or take advantage of new opportunities in these spaces.
Conversely, retail, hospitality, travel, and restaurant sectors were amongst the hardest hit by the virus. Hotels may take the longest of real estate asset classes to recover; some analysts predict that it may take as long as five years, even for the operators who manage to stay open. This problem is compounded by ripple effects from a downturn in the airline industry. The amount of tourism relied upon to service these businesses is in decline; this, in turn, impacts their operating real estate.
Restaurants and bars have also seen a significant impact from Covid-19 as many non-essential operators have had to close their doors. Others have resorted to take-away or delivery food and drink or hosting virtual paid events. As a result, transactional, investment, agency, and lease advisory roles in these sectors have suffered as many clients make redundancies or offer internal moves to other departments where possible. However, good news is on the horizon - with new vaccines being rolled out next year and the promise of businesses re-opening, I expect to see more roles becoming available in these sectors in the latter half of 2021.
Retail was one of the most challenging sectors hit; this has presented opportunities for asset and development managers to become involved in re-purposing and re-positioning, especially in town centres. Asset management companies I am working with are focussing their attentions on how to think creatively about how to develop and redesign buildings in this area. This is also providing opportunities within the distressed space particularly for distressed retail funds, and this also applies to student accommodation and logistics where candidates with distressed asset management experience in these areas are in demand.
The future of offices?
One of the most significant adaptations for many, including myself, has been being forced to work from home. When the government announced the first lockdown in April, most of my clients closed their offices, and employees were faced with the new world of working virtually. As a result, some clients have closed their offices for good, realising that employees can effectively do their jobs remotely; this has resulted in them saving office space costs whilst employees have gained a more flexible working experience.
However, this has presented challenges as many I speak to are fatigued with working from home and prefer a hybrid style of working long-term. The ideal seems to be 2/3 days per week from the office and the rest from home. It will be interesting to see how 2021 brings about these opportunities as businesses try to make this a reality. To stay competitive, companies will need to adapt and be more flexible to attract the best talent the market has to offer. Overall, the consensus seems to be that to get teams working to their full potential, a return to the office is essential. How can you develop a strong culture unless you have regular team meetings and social events in person? And what about more junior employees who need to be trained and mentored in a hands-on environment? A collaborative and effective workforce can only truly be achieved by working with each other face-to-face.
Whether we will see this in the coming year has yet to be seen. If the government continues putting the country into lockdown time and again, it will become more challenging for businesses to move forward. But if companies can go back to some normality without lockdowns taking place, life may go back to some level of pre-Covid normalcy and clients can adapt to the "new normal".
The rise of flexible working
The increase in remote working is helping to facilitate virtual technology and facilitating the rise of flexible workspaces. Indeed, demand for flexible and co-working office space has overtaken the conventional office leasing model that companies traditionally require; this has resulted in more start-ups in the flexible office space, which have sought candidates with relevant experience. Investment managers are more widely investing in this emerging sector, and JLL predicts that by 2030, flexible and co-working space will make up 30% of corporate real estate portfolios.
Whilst flexible office space is being seen by some as the "golden egg" amongst other less well-performing sectors, there are some unanswered questions about how shared workspaces will adapt to new health and safety policies in the coming year. How will they track and trace visitors effectively? How will they implement highly standardised cleaning schedules and ensure visitors are adhering to the guidelines set out? Will there be areas they struggle with? Those are just some of the questions that are being asked.
Real estate recruitment in a post-Covid era and beyond
It is widely expected that as the government rolls out vaccines across the UK and eases restrictions, the economy will start to recover albeit at lesser levels as pre-Covid. I am finding that overall, sentiment from both clients and candidates is optimistic about the coming year. Clients who have business plans they are hoping to execute generally include a strategy for expansion, which means recruitment on the horizon. But while furlough presents a fresh wave of redundancies, many clients I speak to are re-thinking how necessary some of these roles were in the first place and redesigning job roles to maintain staff up-skill without the need to recruit more.
Candidate experience is more important than ever
The candidate market is busy with highly talented property professionals actively searching for new roles. I expect to see clients looking for more experienced candidates who can add value straight away; this applies particularly to more senior hires around Associate Director/VP – Director level/P levels, where the risk-return ratio is higher and can be more costly recruit the wrong candidate. For example, some consultancy-side clients I am working with are trialling lower base salaries with more competitive performance-related bonus schemes.
Candidate's motives for moving jobs and companies are also changing, and I expect to see aspects such as job security, location, technology on offer, business pipelines, flexible working, diversity and inclusion policies and culture being the forefront of candidates' requirements.
Whereas London was once seen as the centre of job prosperity and financial reward, there has been a step-change shift to the regions as increasing numbers have proved that they can work remotely and are moving out of London. Clients are more open to this way of working than previously; I therefore expect to see an increase in regional roles that offer flexible working.
The candidate experience should not be underestimated, even when there first appears to be a surplus of candidates available such as at the current time. Attracting the right candidate is only part of the key to a company's success; retaining them in the long-part should also be factored into the onboarding process. This starts from the very first conversation a talent acquisition lead or headhunter has with the candidate. A sound relationship with an experienced recruiter who can offer sound knowledge of onboarding, diversity and inclusion, attrition and retention can pay dividends in the long-term.
Technology is king
Since March, clients who have been involved in hiring will already know that reliable technology is on hand to help. Zoom, Teams and Skype have proved invaluable to many during the past year. Recruiters know that it is essential that virtual recruitment continues so that hiring processes keep moving while protecting recruiters and candidates alike. For me, it was an uncomfortable change at first and took some getting used to, but it was an essential part of moving with the times; 1st stage phone interviews stayed the same but face to face interviews moved online. Clients with urgent requirements offered candidates the option of video interviews as soon as possible. I foresee that this will continue into 2021 until it is safe to travel and meet in person. While some preferred to wait until an in-person interview was possible, many feared losing strong candidates to a competitor during the wait.
A future-proofed career
Candidates going into 2021 who are at risk of or have already been made redundant, may find it useful to think about how they can future-proof their career by looking at upskilling or re-training. Strong Excel skills will continue to be in demand, particularly those who can model complex cashflows from scratch; this applies to consultancy and client-side roles. As we came out of the last financial crash, there was a strong demand for business development and cross-selling skills as the market was squeezed and companies did not have the budgets to "carry passengers". I foresee this trend to be repeated as we emerge from the Covid crisis. Those with "softer" skills which are often hard to define, but can be related to managing people, are another area which is in short supply but often needed with clients I speak to and this trend is set to continue.
Light at the end of the tunnel
2020 has been a tricky one to manoeuvre. However, there is light at the end of the tunnel; two new vaccines are coming out and certain sectors such as logistics and alternatives are thriving because of the pandemic, which will present new roles in the year ahead. The lockdown has forced us to re-look at our relationships with work and our friends, family, and outer circle. We have had to make sacrifices and consider the essential things in life that we never needed before; this has brought about a change in mindset for many, and a shift in focus of priorities of what people want from their careers. Candidates' motives for moving are shifting, and companies are more aligned to this. Employers are looking to expand, trends such as flexible working are here to stay, and the candidate experience should not be overlooked. There are good quality candidates available for clients looking to bolster their teams next year and this will again provide opportunities for job seekers. The real estate landscape may look bleak at first, but I am confident that 2021 will be the start of an exciting new chapter ahead.
· What have been the biggest challenges of your year so far?
· How do you plan to navigate the path ahead?
· What do you hope that 2021 will bring?
We would love to hear your thoughts – comment below.
Lucy Winberg is Managing Director of Winberg Associates Property Recruitment, a boutique real estate search provider dedicated to the real estate industry.
If you are thinking of moving roles or would like to discuss current or future requirements, call 0203 865 6206 or email Lw@winbergassociates.com.
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