Recession fails to stem real estate recruitment

Copyright: David Lawson - Property Week Autumn 2001

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Ask any human resources manager in the property industry whether they are sending recruits on paid leave because there is nothing to do. These key back-room players  need a good laugh at this time of the year, as tempers fray and the phone never stops ringing. There are never enough hours in the day to herd a new intake of graduates into the right desks at the right office while the previous year’s intake is moved outwards and upwards

 Whenever the economy weakens, someone will always pick up the rumour that some financial group dangling huge salaries to attract the brightest graduates is sending them off for a world trip ‘to gain experience’.  Beth Molloy at Insignia Richard Ellis seems bemused by the whole idea. ‘Send them on holiday, my dear? No chance. We are desperate to get them in. There’s plenty for them to do.’

    It’s not just that recession has yet to bite. Firms need those young bums on seats because of the way the industry is changing.  Surveyors are given responsibility much earlier in their careers nowadays, says John Macdonald, partner in charge of graduate recruitment at Fuller Peiser. Staff with a couple of years’ experience are ruthlessly poached and this opens up gaps below them..‘Anyway, I’ll bet many would be unhappy not to start right away,’ adds Tim Gerrard, group services manager at DTZ. ‘They worry about being left behind in the career race,’

  So the door has not slammed shut on newcomers. In fact it appears to have edged wider, with most of the big names maintaining or increasing entry numbers. Of course, these were set before ripples from the dotcom crash widened  into the general economy,  and no-one could anticipate extra uncertainty following the World Trade Centre disaster. Yet managers remain remarkably optimistic about 2002 and few are  yet forecasting a big fall-off in recruiting.

  The pressure has had an inevitable impact on salaries. A few years ago, many were complaining about poverty wages which kept bright youngsters out of the industry. Recruits are now being offered between £19000 and £20000 a year in London and £15-16000 in the provinces – around a thousand more than a year ago.  The figures are not precise because firms will go an extra mile for particularly good candidates. ‘A £1000 joining fee is fairly common,’ says Mark Smith, recruitment manager at King Sturge. But he admits this may not extend to all firms which will look at other incentives. One put the cat among the pigeons a couple of years ago by offering what appeared to be a couple of thousand more than competitors. ‘But applicants discovered this was the value of a package including a company car,’ says Stephen Westacott, head of HR at GVA Grimley, warning that it can be dangerous if   graduates feel they are being duped.

  Initial salaries are also less important to canny applicants than their prospects further down the line. Some firms are quicker to promote people into higher pay bands; others have a richer training program. Smith believes it is important that his firm  offers a proper contract where others may make only a two-year commitment and then expect graduates to reapply for jobs after completing their training.

  Few are applying on the basis of pure monetary  terms, anyway. Even the highest levels pall beside the £35000 bandied around as a starting point for big City management firms and lawyers – a perennial reason given why the industry cannot attract high-fliers. Most HR managers are quick to dismiss the idea that this is a great deterrent.

 ‘We don’t see ourselves in competition with the City because  it is a different kind of job,’ says Smith. ‘People are not coming in solely to make lots of money. They want a more social kind of work which does not involve ridiculous hours.’ 

  Nor has the desperate need for newcomers led to any softening of standards. Most managers say these have actually risen as they realise the need to lift the overall level of the profession. Knight Frank started out looking for 20 graduates but settled for 14. ‘We were determined not to take on people just to make up numbers,’ says Howard Woolaston, director of the firm’s graduate scheme.  

  Many firms are sticking to the minimum of a good degree before considering applicants but this has a way of bending according to circumstance. ‘Most of us are looking for the right character traits such as communication skills, drive and enthusiasm,’ says Keith Jones, head of human resources at Lambert Smith Hampton.

 Some decisions are influenced long before degree results loom. LSH has 14 sandwich students, an area Jones is keen to develop because they already have experience working with the firm by the time they graduate. King Sturge assumes they will have a good degree and avoids those with poor A-level results.

 Insignia  RE make no reference to degree levels in its offers, relying on judgements made in interviews. Fuller Peiser has the same attitude but Macdonald denies this undermines standards. In fact he is passionate about raising levels that as a recruiter and APC assessor he has seen decline for the last five years. Marks says the only way to do that is to dig deeper to get the best candidates, looking at the way candidates performed at school. ‘This is down to poor publicity at schools, where surveying is not given the same image as  more brash City-type careers. It is important to target people before they choose their professional degree path.

   Another approach is cherry-picking the brightest and sending them off for further education. Woolaston says Knight Frank’s recruitment will drop next year because the intake will include graduates being sponsored for MSc courses, studying languages and business as well as working for their RICS finals.

  Non-cognates are often targeted for these courses.  Insignia has taken on four who will study part-time for an MSc while Jones Lang LaSalle’s training officer Pamela Duke says ‘we are always interested in graduates with business-focussed degrees.’ Others are having less success. Marks says H&B has looked at non-property graduates but found the quality has not been high enough.

  No-one would admit that selection hinges on which university is granting the degree, although most admit privately to preferences based on past experience and quality of research. Generally, the London-based firms draw heavily on Reading, Oxford Brookes, Kingston and South Bank but this is often a choice made by graduates rather than recruiters.

   Provincial offices may do their own head-hunting and often form a close tie with their local university, says Jones. Molloy has also seen a growing tendency for graduates to remain in the area they studied rather than migrate for better money in London. While Aberdeen and Herriott-Watt feed into the London market, they have a strong connection with Scottish branches.  Sheffield Hallam and Nottingham Trent are the same for the North and Midlands and the West of England University with its region.

   Pressure to find good entrants means firms no longer leave the choice to prejudice or chance. Healey & Baker has joined the annual ‘milk round’ of universities. ‘In the past we have not had to put in the effort because of our name but things are getting tougher,’ says HR manager Ben Marks. This is old hat to many other firms Westacott says GVA Grimley’s team trooped around 26 universities last year.

  Gerrard, who came to DTZ from outside the industry to run a new HR team, so he sees the problems of recruitment in a wider perspective. ‘When you are fishing in a very small pond, you have to differentiate yourself,’ he says. Technology, which is one of DTZ’s strengths, is being put to use getting across to techno-savvy youngsters by giving graduates their own web site.

   Not revolutionary at first sight but the important factor is that it will be built and run by the graduates to talk to each other rather than something granted from above. ‘It could carry anything from where to get a curry to how not to piss off your boss,’ jokes Gerrard. It will also be opened up to undergraduates so they can talk to their own kind about DTZ . Given freedom, it could be an experiment others will rush to reproduce, as for once graduates will start coming in to explore firms rather than wait to be seduced.

Graduate intake     2001               2000                            2002

GVA Grimley               44        72                                unknown

DTZ                             35        compares well              undecided 

Insignia RE                   30        comparable                  undecided

King Sturge                  25        similar                           similar

CB Hillier Parker          22        slightly higher                similar

JLL                              22        similar                           reviewing

LSH                             21        about same                   similar

WGS                           20        same                            fall

H&B                            20        similar                           similar

Knight Frank                14        marginal rise                 possibly lower

CCRE                          12        similar                           undecided

Chesterton                    10        same                            undecided

Fuller Peiser                 8         same                            undecided

Prudential                     2         none                             4 proposed

Recruiters desperately scouring the country for new blood to invigorate their firms might be surprised by the remarkably generous number of graduates produced by surveying courses – around 4000 a year. So why is there such a shortage?

  Firstly, this figure covers a wide range of skills. Fine arts, for instance,  is not necessarily the area most are looking for. But the main reason is that only half these graduates go on to take APC courses. Of those that choose surveying, it is ‘very rare’ to find anyone who cannot get a job, according to as Rob Tovey, head of education at the RICS

  It seems perverse that overall numbers could actually fall because of changes in  the way the RICS recognizes courses. Tovey says the Threshold Standards Policy will lead to a ‘short-term dip’ as courses are reassessed from this year according to criteria such as A-level standards and teaching quality. But he aim is to raise quality rather than quantity.   ‘Fifteen years ago there were 8000 graduates coming off surveying courses,’ he says, leaving  unsaid whether such huge numbers served the profession well in the past.

  Recruiters are well aware that  they never see large numbers of potential candidates who siphon off into other areas. ‘A few years ago no-one from the Cambridge land economy course went  into mainstream property jobs in one year and it caused a fuss about whether we were offering the right incentives,’ says Stephen Westacott, head of human resources at GVA Grimley. But most recruiters don’t see this as a major problem. They, too, want quality rather than quantity, and welcome higher standards among those that do come for interviews.