Associate Margaret Glass recently attended a Commercial Real Estate Women’s (CREW) Cocktails & Conversation forum focused on pursuing pay equity (paying employees fairly despite gender, race or other protected categories) and pay parity (being able to demonstrate that there is no pay gap across the workforce when it comes to these categories) in the commercial real estate industry. Attendees discussed issues raised in two white papers published by the CREW Network. Following are some of the interesting findings from the two papers.
Benchmark Study Report on Women in Commercial Real Estate
The first white paper, a Benchmark Study Report on Women in Commercial Real Estate, published in 2015, measured progress for women in commercial real estate over a 10-year span. Interesting findings include the following:
The gap between men and women in median total annual compensation was 23%, and the gap widens in higher-level positions. Women also make less in commissions and bonuses than their male counterparts. The size of the income gap varies by specialization, with the greatest differences observed among real estate brokers and developers. The study suggested that one reason for the pay gap may be that “women negotiate professionally four times less than men, and when they do, they ask for 30% less in compensation increases.” The study also suggested that managers may assume that women value other rewards, such as more time off. To that end, 20% of women reported that their marital or family status had adversely impacted their career and/or compensation, compared to 8% of men.
Men are more likely than women to hold C-Suite positions, although female participation at this level is increasing. As men and women move up the ladder, the percentage of female participation decreases, which other studies indicate maybe due to lack of flexibility. The study also found that men, much more than women, aspire to the C-Suite, while the most common goal for women was to reach the SVP/partner level. However, the study found that the percentage of women with direct reports (employees who report directly to them) was on par with that of men, which demonstrates an increase in direct reports for women over previous years.
Suggestions to advance equality of women and pay equity in commercial real estate included:
- making mentoring and sponsorship of women a priority.
- recognizing and addressing unconscious bias with objective assessment tools such as diversity consultants.
- conducting employee pay equity tests regularly to identify disparities.
- providing women with training in negotiations and leadership.
Achieving Pay Parity in Commercial Real Estate
The second white paper, Achieving Pay Parity in Commercial Real Estate, published in 2018, focused on causes of the pay gap, ways to address it and how companies benefit from diversity and pay equity. Interesting findings include the following:
Causes of the Pay Gap
- Women are negatively impacted by unconscious biases such as assumptions that women are less committed to work due to family responsibilities.
- Women still experience gender discrimination (4 in 10 reported experiencing discrimination in a 2017 survey). However, 2/3 of women who reported being bypassed for a job or assignment due to gender never took action as a result of it, often for fear of losing future opportunities or other negative effects.
- Women ask for raises less often than men, which then has a cumulative effect over the course of a career. Studies show that sometimes women are in fact penalized for attempting to negotiate their salaries. Survey respondents suggested that pay would be more equitable if employers were required to share compensation information, something only 3% of companies do freely.
How Companies Benefit from Diversity and Pay Equity
- A study of companies where women account for 50% or more of senior management found that these companies outperformed less gender equal firms each year since 2009 in terms of average sales growth, average earnings per share and average debt load.
- Companies that combine both inherent diversity (traits people are born with, such as gender, ethnicity, and sexual orientation) and acquired diversity (traits people acquire with experience) are 45% more likely to report a growth in market share over the previous year and 70% more likely to report that the company had captured a new market. Researchers suggest that “inherently diverse contributors understand the unmet needs in under-leveraged markets.”
- Studies also show that diversity is important to job candidates and therefore can benefit recruitment efforts.
The Study’s Suggestions for Working Toward Pay Equity
- Include women in top leadership and ensure everyone in top leadership is committed to pay equity.
- Focus on hiring and retaining a diverse workforce and incentivize equity.
- Do not ask new hires their prior compensation level, advise them of the position’s pay range and use gender-neutral language in job descriptions.
- Disclose pay equity data with regular corporate reporting.
- Introduce programs to develop diverse talent, such as management skills training.
- Develop gender-neutral benefits packages that allow for paid parental and critical caregiving leave and promote work-life balance.
- Develop training programs for all employees that focus on unconscious bias awareness.
- Use consultants to provide objective evaluations of diversity and pay equity on a regular basis.
Takeaway from CREW Members
Participants in the CREW event indicated that the above statistics reflect their personal experiences in many ways. More experienced practitioners generally agreed that the commercial real estate industry has progressed over the years with respect to participation and pay for women. However, attendees also generally agreed that biases against women still exist. The group agreed with many of the studies’ suggestions for advancing women in the industry, particularly with respect to the idea that experienced women should mentor and advocate for women new to the industry.
Access the white papers here: