Employment experts who focus on the shopping center business worry about a looming “talent gap” they say could leave the industry ill prepared for the future. “We are going to be out of talent,” said Christopher Lee, who heads CEL & Associates, a Los Angeles consulting firm. “It is a huge concern.”
The crux of the problem is this: When Wall Street and the housing market collapsed in 2008, so, too, did the investments of many baby-boom-generation executives. This gave these executives, who were already planning to work longer than previous generations had, an incentive to push their retirement dates even further into the future. Meanwhile, the economy forced companies to lay off younger workers in favor of a smaller core of veterans with deep connections and proven productivity.
CEL surveys show that 65 percent of real estate CEOs plan to retire by 2020, but the longevity of the baby boomers, combined with the leaner payrolls of today’s shopping center companies, could leave an entire generation of would-be developers, leasing agents and property managers working in other fields.
“Few companies right now are willing to take a risk on someone who is not proven,” said Jennifer Millman, an executive recruiter with Millman Search Group. “They have to put their resources where they most need them. They just cannot operate training programs like they once did, where they were working with college students and bringing them into the industry.”
And though younger people will work for lower salaries, more-experienced people come cheaper these days too, and so the inexperienced enjoy no competitive advantage on the pay front, Millman says. During the recession, many executives were laid off not because they lacked talent, but simply because their employers were in the red. “So for a little bit more money than you would be paying this college-age person, you can get somebody who has a lot of experience,” Millman said.
And while hiring is picking up, there continues to be a glut of job seekers on the market, says Holly Kinnear, Taubman Centers’ director of human resources and talent management. “Throughout 2009 and even 2010, we saw high numbers of applicants for every job posting,” she said. “Many were either underqualified or overqualified for the position.”
So what happens to the industry when all those baby boomers finally do retire? “We are not going to have enough good backups behind them,” said Lee. Over and above that, however, shopping center firms should value the energy, adaptability and technological savvy that young people offer, says Patrick S. Donahue, chairman and CEO of Donahue Schriber. But even if fewer young people do go into real estate right out of college, this does not necessarily translate into a “lost generation,” Donahue says.
They, too, will live and work for many more years than their forebears, he says, and some may eventually get into real estate. The key is to build a broad base of skills and experience for the long career ahead.
“I served on a panel with five CEOs of top real estate companies here in Orange County [California], and we were asked what advice we’d give to young people,” said Donahue. “To a person, we all said the same thing: Just get a job, whatever it is. Your first job is not going to be your dream job; it is not going to be your last job. Just get a job and start working.”
This story is from the March 2011 issue of Shopping Centers Today