Jon, what are the big challenges to developing the expertise that you need?
JONATHAN COX, AVALONBAY COMMUNITIES: The hardest thing is getting good people. First of all, the multifamily industry is incredibly competitive [in terms of hiring development people], just given how much capital is flooding into it. Second, all the markets we do business in are also competitive job markets. … We also care about the cultural fit [which takes time]. That can be detriment to us at times, such as when you’re interviewing hot young MBAs with five job offers in hand and asking them to come in for a second and third interview. But it’s very important to us to have the cultural fit, because … you want all the right people who can help you make things happen.
Why do you all feel it’s important to promote from within?
LORI ADDICKS, POST PROPERTIES: It’s the industry knowledge and the business knowledge–there’s so much to learn, and you just cut that learning curve tremendously [when you hire people from within the company for jobs]. They just need to ramp up in what the specific job is versus [educating themselves about] the industry, the company, and their role.
BRADLEY GRIGGS, BRE PROPERTIES: You also send positive messages to other people within your organization and show them there is a growth track.
Many would-be employees are unfamiliar with the multifamily industry and the career paths it offers, from property management to finance. How aware are these MBAs of the financial and career opportunities available in multifamily firms?
COX: Very aware. If they’re interested in real estate or development, they’re very aware of the REIT universe and [are just looking for the right fit]. They also want to know whether the career track is “fast enough” for them [at your company]. These days, MBAs expect to be a partner or an officer in two or three years.
GRIGGS: One of our challenges in a hot employee market like today is that we get people through our intern program and to the level of a manager or director, but then they don’t have all the experience yet at their new position. That takes time. But executive recruiters will try to woo these people with jobs that pay an additional $20,000 to $30,000 a year. That can be enticing for a young manager. We then have to connect with these people and tell them that while we may not be able to pay them right now as much as a competitor is offering, here is where we see you going in the future. We give them the big picture and good career counseling.
How has the skill set changed for leaders and potential leaders at your company compared to the past?
COX: The big thing for us is that we’re less about tactical local business decisions and more about thinking broadly about the company and its position in the marketplace versus our competitors. … The ability to think strategically is one of the competencies we look for when we are recruiting people.
ADDICKS: There is a much greater emphasis on being aware of what the competition is doing and taking a much broader perspective. It’s not enough anymore to just operate your individual property–or your portfolio of properties–effectively.
GRIGGS: I would also add that it is so much more important now to hire people with really good people skills and also to train them to be good listeners and how to interact with different types of people.
Why is that so important now? It seems like that would be less of a requirement given the increasing presence of technology in business today.
GRIGGS: Our business still involves dealing with people face-to-face, and that business is much more complicated than ever before. It requires creative problem solvers who can think and communicate.
COX: You’re seeing the institutionalization of real estate. Before, the real estate industry was composed primarily of small, local companies. That is changing. Larger organizations bring a lot of leverage to different aspects of the business, and to be truly effective, you’ve got to utilize those different parts of the company, which requires a broader approach [to getting things done]. You’re not just a developer talking to the banker who’s giving you a loan to build a building and persuading a local zoning board to grant your zoning. Instead, you are bringing many different parts of an organization together to create an asset that’s going to last into perpetuity.
ADDICKS: Yes, and there’s a lot more technology today, which makes for efficiency behind the scenes, and at the same time, there are increasing expectations regarding levels of customer service from residents and prospects. This requires critical people skills at the property level, but also at higher levels, as managers oversee these people.
We’ve talked about finding and developing high-potential people, but let’s consider the opposite scenario, when companies have lost talented people. When you think of those situations, what do you think went wrong, and how could that be fixed?
ADDICKS: Often it’s a lack of communication, where a mid-level or senior manager has his or her eye on a particular person in the organization because they see significant potential in that individual. But if that perspective hasn’t been shared with that individual, they may have no idea that they were thought of so highly. So, without that reinforcement, they start looking. Twenty to 40 percent of the workforce right now is actively looking [for another job, according to researchers].
How do you teach the skill of strategic thinking?
ADDICKS: It’s not an easily developed skill. You’ve just got to keep presenting people with opportunities for new and broader ways of thinking. At Post, managers at all levels participate in presentations by senior leaders that stimulate bigger-picture thinking. You can also place people on projects that cut across your organization, because that is going to require them to think outside their area of responsibility.