Chasing diversity in corporate real estate and technology

This article was first published by CoreNet Global.

Diversity, equity and inclusion (DEI) programs abound in the corporate world, and evidence continues to mount that more diverse organizations produce better financial results. Yet when it comes to results, progress remains slow in building a more diverse, equitable and inclusive workforce. Focusing on two important sectors, technology and corporate real estate (CRE), we took a look at some of the evidence of progress, as well as the issues that have stymied forward movement. Both of these sectors, while offering good jobs with numerous benefits, are considered to be somewhat lagging in growth of diversity. To varying extents, they remain dominated and led by white men.

Why is this so?

The short answer seems to be that history is hard to overcome. Both the technology and CRE professions arose in a time period when the commercial and financial worlds were almost exclusively populated by white men. Education in technical disciplines was overwhelmingly geared toward men. Ethnic, racial and cultural minorities found these career and educational options difficult to attain. Moves toward diversity began to take shape along with the civil rights and feminist movements of the 1960s and 1970s, but cultural bias against women and minorities in management, leadership and technology persisted.

There are many reasons why diversity track records lag in CRE and tech. Divergence of aspirations versus actual efforts by businesses in attracting diverse talent certainly appears to be one. Difficulty of breaking into the field, along with compensation gaps, workplace culture, and shortage of role models and mentors appear to figure large. Lawrence Gardner, president of OMS Strategic Advisors LLC, told D Magazine that, while CRE firms may strive to attract more diverse talent, other industries offer more attractive entry paths, ramp-up time and leadership tracks. “The appeal of a $35,000 draw or using your personal funds is a deterrent,” Gardner told D’s Christine Perez. “Also, a lack of mentorships for those who do enter the industry has led to an early exit by many minorities.” CREW Network, an organization that promotes diversity in commercial real estate, suggests in its 2020 Benchmark Study Report: Gender and Diversity in Commercial Real Estate, that “women tend to be more risk-averse and less likely to take 100% commission-based positions,” an observation that it links to lower commission earnings. But it also posits that women may not have as much access to high-profile clients or the most profitable deals.

Overall, the CREW study reports that in the past 15 years, the status of women in CRE has remained stable, “with only slight progress.” Women comprise just over one-third (36.7 percent) of the workforce in the profession, a figure that has not changed much in the last 15 years, and hold only 9 percent of C-suite positions in commercial firms. Given all this, it should not be surprising that women report being less satisfied with their careers than they did even five years ago. Says the report: “This decrease in satisfaction may come from increasing frustration with the lack of progress.”

Although the Global Real Estate DEI Survey 2022 reports higher percentages of women in the CRE workforce – “42.5% of employees in North America, up from 41% in 2021, 39.5% in Europe up from 38% and 50% in the Asia-Pacific region, up from 47%” – it also notes that these improvements are “not seismic,” and that problems such as underrepresentation at senior levels persist. Worryingly, this survey of 192 real estate organizations reports that in some subcategories – in particular Black and Indigenous women – representation decreased from the previous survey.

Blogs

"One size fits one" in the new workplace

One size does not fit all: In this blog we highlight the importance of stimulating collaboration and teamwork.

Learn more

Blogs

The Global State of Work: the impact of hybrid working on a changing world - Part 1

The fundamental transformation of the world over the past two years has changed life as we know it. Our jobs may be the same, yet everything else has changed. In this blog, we discuss how the global state of work affects employees and the places we work.

Learn more

Technology not on the forefront

Technology surveys show even less diversity in that sector. Zippia, a human resources company, reports that only 26.7 percent of tech jobs are held by women and 7 percent by Black Americans. Salaries for these groups also trail those of white and Asian men.¹ The tech industry has actually moved backwards from early days when computing, programming and technology development were seen as clerical tasks, “women’s work.” The ENIAC (Electronic Numerical Integrator and Computer), the first programmable digital computer, was largely programmed by a group of six female mathematicians, although the development team was headed by men. Anyone who has seen the movie “Hidden Figures” knows about three African American women – whose job title was “computer” – who worked with pencil and paper on the early mathematical calculations that supported the United States space program. In the United Kingdom, women were the largest trained technical workforce in the computing industry from the end of World War II until the mid-1960s.²

As a 2017 historical survey in The Guardian points out, women in these jobs were looked upon as low-level, unskilled drones who would likely leave the workforce for marriage and childbearing³. As the economic potential of the computing industry became apparent in the 1960s, society’s broad bias against women in leadership positions exerted itself and women were pushed out.

According to the 2023 State of DEI in Tech report from Built In, 33 percent of tech employees report having experienced discrimination or unfair treatment at work, and 54 percent say they have witnessed this behavior due to someone’s race, gender, sexual orientation, religion, disability or other trait. Despite this – or perhaps linked to this – about 30 percent of tech firms say that DEI is not vital to their success.

This is the case despite statistics showing that performance of more diverse businesses exceeds that of their counterparts. McKinsey & Company, the global management consulting firm, reported in 2020 that companies with a high share of women executives were 48 percent more likely to outperform companies with the lowest female executive representation. Similarly, companies with the highest ethnic and cultural diversity are 36 percent more profitable than the least diverse companies. Yet the firm also reported more recently that only one in three companies increased the diversity of their executive teams over the past five years.

Coloradobiz magazine, citing research from Harvard University as well as McKinsey, said in a recent article that, “Diverse companies enjoy 2.5 times higher cash flow per employee, have 19 percent higher revenues, and have better anticipation/coping/adaptation skills. They are more resilient during downturns and are 45 percent more likely to gain market share, 70 percent more likely to capture new markets, and significantly outperform the S&P 500.”⁴

So, what’s the answer?

What everyone seems to agree on is that businesses who want to increase their diversity – and almost all say they do – need to be proactive.

Diversity, Equity and Inclusion 2023 Lighthouse Report, a report produced by the World Economic Forum in collaboration with McKinsey, identifies five success factors that resulted in “the most significant, scalable, quantifiable, and sustained impact for underrepresented groups.” These are:

• Nuanced understanding of root causes, developed through both hard numbers and input from target populations, allowing prioritization of problem areas identified through these means
• Meaningful definitions of success that set clear and quantifiable aspirations
• Accountable and invested business leaders who model and lead the desired changes and who are held accountable for outcomes
• Solutions designed for context, integrating changes into key processes and ways of working to have sustainable impact
• Rigorous tracking and course correction with KPIs that are monitored with solid data

McKinsey notes that at the current rate of progress, “it will take another 151 years to close the global economic gender gap. Executive teams will take at least 29 years to reach parity in gender diversity and at least 24 years to reach parity in ethnic diversity, based on a study of U.S.- and UK-based companies.” Much advice on increasing diversity centers on several key efforts such as:

• Avoiding unconscious bias that tends to reinforce homogeneity and limits opportunities for people of different backgrounds.

  Unconscious bias can take many forms and impact many target groups based on attitudes and stereotypes that affect our thinking without us being aware of them. One glaring example: Princeton University Professor Ruha Benjamin⁵ cites studies that show that, all other factors being equal, people with “whitesounding” names receive 50 percent more callbacks on job applications than do applicants with “blacksounding” names.

• Making efforts to attract a diverse pool of applicants for open positions, which may mean broadening search efforts beyond the current recruitment avenues.

  Benjamin also points out that ads for higher-paying jobs often are placed in sources that attract more men than women. Building more diverse talent pipelines also may include investments in outreach programs, educational partnerships, and mentorship initiatives.

• Building inclusive workplace culture, a problem reported in both CRE and tech.

  Research from the human resources firm Workhuman and the Gallup organization says that 97 percent of HR leaders report their companies have made efforts to improve DEI, but only 37 percent of workers feel that way.⁶ The report suggests remediation efforts focused on recognition based on employees’ unique contributions based on their interests, experiences and passions. The report suggests that this sort of “authentic” recognition can help shield employees against burnout and may also improve retention.

• Battling gender imbalance by ensuring equal opportunities for promotion and career advancement, and ensure pay equity.

  This needs to happen at all levels of the organization, especially at leadership levels where mentors and role models need to be visible and available.

“Advancement on diversity for both sectors is vital as CRE and technology are foundational to the future of how we live, work, play and study, in environments that are digitally enabled,” says Pay Wu, SLCR, co-founder and president of MWBE Unite. “Under-representation does not occur overnight. It is important that emerging areas led by proptech include diversity from the start – to build capabilities and credentials for the future.”

The corporate real estate and technology sectors may have a longer way to go than some other career sectors, but efforts to build diversity, equity and inclusion are needed throughout the business world. Economic factors – the demonstrable success of diverse organizations – provide more than ample justification for the investments needed to achieve the goals.

^{[1] Ariella, Sky. ”25+ Telling Diversity in High Tech Statistics: Tech Demographics + Trends.” https://www.zippia.com/advice/diversity-in-high-tech-statistics/. 7 November 2022.}

^{[2] Hicks, Mar. Programmed Inequality: How Britain Discarded Women Technologists and Lost Its Edge in Computing. The MIT Press. 2018.}

^{[3] Brewer, Kirstie. “How the tech industry wrote women out of history.” The Guardian. 10 August 2017.}

^{[4] Hayes, Helen Young. “Unlocking the Power of DEI: Building Better Programs for Business and People.” Coloradobiz (cobizman.com) 6 July 2023.}

^{[5] Benjamin, Ruha. Race After Technology. Polity Press. 2019.}

^{[6] “From Appreciation to Equity: How Recognition Reinforces DEI in the Workplace.” Gallup Inc. 2023.}