Real Estate's Scarce Resource: Executive Talent

Show Me the Money... "The 80/20 rule applies. Just twenty percent of real estate industry managers are top performers. And these are the hardest people to recruit because they are happy, well compensated and challenged."

That's my friend Matt Slepin at the Terra Search Group in San Francisco commenting on the challenge of recruiting great real estate talent.

"Real estate at the top level is still dominated by deal makers versus managers. So there is a shortage of management talent at all levels."

Wow, does that strike a chord. Real estate transactions rule. That's where the money is. So naturally, dealmakers frequently run the show.

Will that change? Will real estate services management become more valued? My guess is "yes," particularly as real estate companies provide more integrated corporate and development services. So the task will be to recruit great brokers to become great managers across the industry. But how?

According to Slepin, "More and more, the biggest component of compensation is incentive based. Companies want strong performers to have a big carrot both at the end of the year and over time. In real estate, people want the opportunity to make big bucks if they or their company invests in or develops a deal that makes a lot of money."

There's an unavoidable tension between people paid a secure salary and those paid commissions. So it will be fun to watch as the real estate industry struggles to blend the two together.

-- Peter Pike