A jump in participation makes progress harder to see in the third global survey of diversity, equity and inclusion (DEI) initiatives in the commercial real estate sector. For example, the newly released findings appear to show a sagging focus on pay equity, with a year-over-year decline in the percentage of employers analyzing and addressing gender and race/ethnicity pay gaps. However, that’s likely more reflective of the changing profile of the survey base.

Uptake has grown from seven sponsoring associations and 175 responding organizations in 2021 to 19 associations and 236 respondents, representing nearly 297,000 full-time employees worldwide, in 2023. Public and private real estate entities that collectively hold USD $1.98 trillion in assets under management account for 62.5 per cent of the most recent feedback. Industry-related professional and financial service providers, corporate real estate divisions of other types of companies, developers and institutional investors provide the remainder.

More than 90 per cent of the survey respondents are based in North America, including 44 firms in Canada and 143 in the United States. Results fall roughly into two categories of indicators: initiatives, tracking policies and programs to encourage and facilitate DEI; and outcomes, tallying the gender and race/ethnicity split of employees at various career stages. Initiative indicators are reported at the macro level for the entire survey base, while gender outcomes are broken down regionally for Canada, the United States, Europe and Asia-Pacific. Race/ethnicity information is provided only for the U.S.

Some of the findings from data submitted in the summer of 2023 include:

• women in Canada fill a larger share of leadership roles and experienced a greater degree of career advancement during the survey period than their global counterparts;
• people of colour gained more presence on boards of directors in the United States, while losing ground as a percentage of overall reported jobs; and
• an increasing share of participating companies have active leadership on DEI issues within their C-suites and have formal DEI programs, but fewer have budgets to deliver them.

Accompanying commentary from the survey coordinator, the consulting firm, Ferguson & Partners, acknowledges there is some “DEI fatigue” across the economy in general as all sectors grapple with a confluence of financial, climatic and geopolitical pressures. Although arguing that modest year-to-year fluctuations in some indicators shouldn’t necessarily be interpreted as a setback or step forward, Ferguson analysts underscore the importance of regular scrutiny and continued commitment.

“Just as DEI is not an afternoon’s training or something to ponder only during Black History Month, DEI is a process and movement to change culture and correct inequities. Fighting DEI fatigue is not only the right thing to do for under-represented peoples, but can also lead to improved performance,” the executive summary to the survey results states.

“The survey results highlight significant progress in DEI, but also uncover areas needing improvement,” concurs Carolyn Lane, vice president and chief operating officer of Canada’s REALPAC, which is one of the founding sponsors of the survey. “We hope the findings act as both a benchmarking and educational tool, guiding the industry towards enhanced DEI practices.”

Canadian women’s career advancement outpaces global counterparts

Looking to the gender split of Canada’s commercial real estate workforce, women fill 45.6 per cent of total full-time positions in companies reporting to the survey. That’s a larger share than at participating companies in the U.S. (41.4 per cent), Europe (39.8 per cent) or Asia-Pacific (44.8 per cent).

Canada stands out most notably for the share of women on boards of directors — 27. 4 per cent versus 23.3 per cent in the U.S., 19.2 per cent in Europe and 17.3 per cent in Asia-Pacific. Meanwhile, women account for the majority of junior-level employees in three of the four regions — at 50.5 per cent in Canada, 50.1 per cent in U.S. and 52 per cent in Asia-Pacific — and are almost an equal complement, at 49.7 per cent, in Europe.

This is the first iteration of the survey to separate out Canadian numbers so there is no measure of year-over-year change from 2022, but progress can be seen through a metric that compares hiring and promotions against departures. During the survey period (Q3 2022 to Q3 2023) the percentage of women advancing in their careers exceeded the share that left their employment. For junior and mid-level positions, women were also hired or promoted at a slightly higher rate than their overall proportion of the workforce in those ranges.

“To move the needle on the diversity of a given employee group, the proportion of promotions and hires must be greater than the percentage of that group’s baseline employee population, with the departure rate also lower,” analysis accompanying the survey results advises.

The mid-level career stage is the closest to exhibiting balanced human resources activity, with women representing 47.6 per cent of new hires and 48.4 per cent of promotions during the survey period. That proportion dips as women ascend the career ladder, translating into 28.7 per cent of new hires in senior professional roles and 16.7 per cent in executive management. Promotions were more prevalent as women received 29.8 per cent of those conveyed to senior professionals and 27.3 per cent in executive management.

Although survey coordinators could not always determine the reasons for job departures, six possibilities are cited: joining or starting a competing CRE firm; moving to employment in another industry; retirement; health; childcare; and family care. “Among men and women who left their firms to join/start a competing firm or join another industry, 47 per cent did so for compensation reasons. A lack of opportunities/career progression was cited by 48.4 per cent,” the survey analysis reveals.

Men exited jobs at a higher rate than they were hired in senior, mid and junior level roles, but continued to be hired into executive management at a pace that outdistanced departures. The percentage of new hires for executive management and senior professional roles were also higher than men’s overall representation in those career cohorts. In executive management, men accounted for 76.4 per cent of departures versus 83.3 per cent of new hires. There is greater discordance at the senior professional level, where men represented 88. 2 per cent of departures compared to 71.3 per cent of new hires.

Execution lags intent on some recruitment and retention strategies

Across the entire survey base, 2023 brought a small uptick in the percentage of participating companies that pay attention to DEI, with just 4.2 per cent of respondents undertaking no initiatives. More firms have a formal policy in place — 56.4 per cent in 2023 versus 53.6 per cent in 2022 — while the remainder have some programs.

Yet, there is collectively less funding to support those efforts. About 74 per cent of respondents report they have either a direct or indirect budget for DEI activities, compared to 85.6 per cent in 2022. Among those with budgets, a larger share now have dedicated funds for DEI (36.3 per cent versus 30.4 per cent in 2022) with the rest drawing from human resources and/or other business units.

As well, a reduced share of respondents have formal DEI committees — 63.7 per cent versus 71.1 per cent in 2022 — with responsibility shifting elsewhere in 2023. A growing share of companies direct DEI initiatives from the C-suite and 16.8 per cent have a senior executive dedicated to DEI — either a chief diversity officer or another senior-level position — compared to 11.5 per cent in 2022.

The 2023 survey findings reveal some areas where execution lags intent. Scholarships and internships for under-represented job candidates were ranked as the most effective means for helping companies achieve DEI goals, flagged by 31.6 per cent of respondents. However, there was a year-over-year decrease in the percentage of companies that provide them — dropping to 58.1 per cent from 64.2 per cent in 2022. There were also pullbacks on other recruitment strategies — such as proactively seeking job candidates, including from outside CRE, from under-represented groups, and looking beyond rigid education and experience criteria — but slightly more scrutiny for bias in job postings and application processes.

About 63 per cent of employers analyzed male-female pay gaps — a drop from 70.4 per cent in 2022. Just 44.6 per cent of respondents considered pay gaps from the perspective of race, ethnicity, nationality or age — down from 48.5 per cent in 2022. However, more than one third (33.2 per cent) report they are working to increase the level of pay transparency in their companies — a jump from 22.9 per cent in 2022.

In assessing the most common impediments to DEI initiatives, about a quarter of survey respondents said other business priorities emerged as competition; 17.8 per cent cited a disconnect between DEI and business goals and objectives; and 16.7 per cent reported budgetary constraints. Disinterested senior leadership appeared to be a diminishing problem, with 9.2 per cent respondents identifying it as a barrier in 2023 versus 12.4 per cent in 2022. In contrast, nearly 13 per cent of respondents said it was difficult to get support from the general workforce in 2023, while just 8.2 per cent found it challenging in 2022.

When asked to enumerate important DEI outcomes, 80.8 per cent of respondents are looking for greater organization-wide diversity, 64.7 per cent seek improved employee engagement and productivity and 49.1 per cent see it as means to retain more existing employees. A smaller percentage of 2023 respondents focused on diversity in senior leadership — 46.4 per cent versus 57 per cent in 2022. As well, respondents were less likely to make connections between diversity and enhanced company performance, although slightly more identified DEI as a way to elevate scores for third-party evaluations and certifications than did so in 2022.

The survey coordinators will host a webinar on February 7th discuss the results.