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As the Real Estate market is experiencing a significant talent shortage, it is more important than ever for organizations to understand what a quality offer looks like. Whether you are trying to bring additional professionals onto your team or want to be prepared to counter an offer made to your top talent, knowing what to expect is essential right now.
So, what does a competitive compensation structure look like in the current Real Estate market?
When putting together an offer or counteroffer, base salary will always be key. This is especially true now, when many firms cancelled bonuses during the pandemic. This put a spotlight on the importance of base salary, leading candidates to search for more guaranteed income.
Christin Hall, a Senior Practice Manager in the Michael Page Boston office, says, “In times of COVID, we value base salary… we go high on the base to avoid counteroffers becoming an issue.”
While more experienced candidates are making a move for reasons other than base salary, more junior candidates can often be swayed by counteroffers. Hall says that the base increase in these cases is typically between 10-15%.
One of our Managers in Houston, Ursula Trevino, is seeing a similar trend. “Unfortunately, we are not seeing clients prepared to offer more right now to get ahead of counteroffers,” she says. “If a candidate does receive a counter, it is typically around a 10-15% increase on base salary.”
In terms of bonus structure, exact rates depend on location, type of company, exact position and department, and experience level.
Trevino breaks down an example of how bonus structures typically change through a career path: “Analysts typically have a set bonus of 10-15% of their base salary. This depends on personal and company performance. As you work your way up the Acquisitions ladder, you see a larger percentage cash bonus (20-30%.) You may receive bonus based on the value or number of deals you bring in or close for the firm. Asset
Managers will be bonused on the performance of their portfolio and potentially get a payout when the asset is disposed of. Once you get to the VP or Partner level, candidates typically will be looking for and expecting some piece of the ‘promote’ or equity so they have a greater steak or ownership and the ability to directly impact their annual take-home.”
Hall also sees equity and ownership become a factor with more experienced candidates, typically at starting at the Director or VP level. “Vesting periods can be anywhere form 1-4 years based on my experience,” she says. “Some companies offer milestone payouts, too. In that case employees are guaranteed payouts even if the projects run over a long period of time.”
While compensation is of the utmost importance, Hall points out that it is “only one part of the story.” While she won’t see candidates focused on long-term growth take a pay cut or become enthusiastic over a lateral move, they do make exceptions. “Some people are open to let a bonus go to transition and gain experience in other asset classes or move to a firm with a better project pipeline,” Hall explains. “Long-term planning and the outlook a firm gives are the biggest motivators. That being said, it's very competitive and firms will still have to present the best compensation package possible to enable a smooth offer process.”
Depending on the size of the firm, there are other key elements we see in a compensation package. Trevino says, “Sometimes larger shops can offer more in terms of benefits outside of compensation including better health plans, 401K match, rent discounts (if you live in one of their properties), or gym memberships.”
While making a compelling offer and acquiring top talent may be difficult right now, but having insight into market trends like these can put you ahead of the game. For further assistance in your hiring process, please reach out to one of our expert recruiters (such as Trevino and Hall) today.
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