The lack of a diverse workforce in commercial real estate is a critical issue facing the industry.

In 2017, the Bella Research Group and the Knight Foundation conducted research showing that white men held more than 75% of C-suite jobs in the U.S. commercial real estate industry, while Black men held just 1.3% of those positions. White women were in 14.1% of senior executive-level jobs, while women in minority groups held fewer than 1%.

Bernadette Smith, CEO of the Chicago-based Equality Institute, led a session at NAIOP’s 2021 Chapter Leadership and Legislative Retreat that provided strategies to help real estate companies address this longstanding issue, which has taken on greater urgency amid the country’s rapidly changing demographics.

Assumptions and Bias

According to Smith, diversity and inclusion efforts often suffer due to a basic human tendency to make unfounded assumptions about other people.

“The subconscious part of our brain categorizes people into little boxes,” she said. “These boxes are essentially stereotypes. To ‘unassume’ these assumptions, we have to slow our brain down. We have to pause and be thoughtful.”

Smith said some assumptions are harmless, but many are not.

“Some assumptions prevent us from seeing the full picture,” she said. “They prevent us from seeing someone’s unique gifts and what others might offer an organization. When we don’t take the time to be deliberate about including others, we actually end up excluding others, because inclusion requires intention.”

Smith said the same concept can be applied to the networks that help real estate professionals advance their careers.

“The reality is if your network looks like you, you are inadvertently communicating that you’re unavailable to people unlike you,” she said. “You’re sending a signal without even realizing it. In companies, we tend to offer opportunities to further our career goals to people like us.”

To bolster that point, Smith cited research from the Women in the Workplace 2018 study by Leanin.org and McKinsey. It showed that talent pools at U.S. corporations are fairly diverse for entry-level positions, but much less so at the C-suite level.

“As people get promoted, there is a much higher percentage of white men in leadership roles,” she said. “The leadership provides opportunities to people who look like them. It perpetuates on and on and on. We have this really subconscious way of being with people who are just like us because it’s comfortable and familiar.”

Inclusion Requires Intention

How can organizations be more diverse? Smith said systems must be changed, and everyone on the team must be dedicated to changing.

“When we don’t take the time to be deliberate about including others, we actually end up excluding others, because inclusion requires intention,” she said.

One way companies can do that is to stop using resumes to find job candidates. She cited the example of the financial services firm Capital Group, which was concerned that its pool of interns mostly came from the same cultural backgrounds. After getting rid of resumes, the next class of interns was 50% female and 58% nonwhite.

Smith said another way to find diverse candidates is to take extra efforts to reach out to underrepresented groups such as military veterans, those on the autism spectrum, people of color and LGBTQ individuals.

“Change the system of how you hire and how you make decisions,” she said. “It might mean stripping gender or information that might influence decisions such as what college they went to out of resumes. If you remove those things from resumes, it actually reduces bias.”

According to Smith, IBM now requires degrees in only 43% of its open positions. Google has also done away with college requirements and offers a six-month program online that the company treats as the equivalent of a four-year degree.

Additionally, Smith said remote-first jobs will often attract a more diverse talent pool.

“If your company is in a city like San Francisco, not a lot of diverse talent can afford to live in the Bay Area,” she said. “We’ve proven the past year during the pandemic that remote work works, and offering remote-first as an option for employees can help a lot.”

The payoff to hiring a more diverse staff can be remarkable for both staffing and income. Smith said multinational consumer goods company Unilever recently achieved gender balance in its management team of 14,000 people. And a 2015 High Impact Talent Management Survey found that companies with inclusive teams have 2.3 times higher cash flow per employee over a three-year period.

“It doesn’t happen by accident,” Smith said. “It takes setting goals, making everyone on the team accountable for those goals, and making sure that all your directors, managers and employees specifically have diversity and inclusion accountability in their performance metrics.”

Follow the ARC

Smith’s Equity Institute teaches organizations to use a method called the ARC to gain clarity in any situation. ARC stands for Ask, Respect, Connect.

Smith presented some questions that can challenge the status quo for hiring in an organization:

“Why do we require resumes/degrees/geography in our job postings?”

“How do we ensure our managers know how to effectively lead under-represented employees?”

“How do managers decide which employees get projects?”

“What can we do to make this a great place to work for Black transgender women with a disability?” (Smith said if your company is a great place to work for someone like that, it’s probably a great place to work for just about everyone.)

“How do we manage performance at a similar pace to how the world is changing?”

Smith said these questions could be asked at company-wide listening sessions.

Next, it’s important for managers to respect the data and answers they gather.

“Actively listen to those answers,” Smith said. “Don’t dismiss them. Respect that this is a process.”

Finally, it’s important to connect the answers to solutions that have accountability for the organization’s leaders. But connection doesn’t stop there, Smith said.

“You have to connect your employees to each other, so that they can continue to have these conversations,” she said. “You want your employees to feel like their voices matter, that they can feel safe at your organizations. Don’t ask those questions and leave them hanging. This really requires some in-depth analysis to figure out what’s happening right now to know where to go.”

This is part one of a two-part series. Read part two here: Creating a Workplace Culture of Inclusion.