Our winter edition cover story, which is being serialised on recapitalnews.com (here’s the first part, with links to the rest), tackles the urgent topic of improving diversity in Europe’s real estate finance industry.
We interviewed six senior figures. Each drew on their experiences of the sector and provided insight into how they are thinking about diversity. It was clear from these conversations that there is a long way to go. But it was also clear there are influential individuals who want to drive change.
The problem with diversity and inclusion is that it is easy for organisations to make the right noises, but difficult to make real progress.
Here are four practical steps, informed by our conversations, that businesses can take.
Gather diversity data: This may seem more applicable to large organisations than to real estate debt teams, which tend to be relatively small. However, debt teams are usually part of bigger companies and their leaders stand to benefit from being on top of the data. Only by analysing the make-up of a team or organisation can its leaders begin to identify which aspects of diversity it lacks – which, in turn, enables them to ask why and consider solutions. Surveys of pay in relation to gender and ethnicity can also identify inequalities, which employers can begin to address. And telling people why you want their information signals a commitment to using it for the better.
Rethink hiring and promotion practices: The people we interviewed spoke of the need to work with recruiters to access a more diverse pool of candidates. However, they also agreed that internal hiring processes must be reconsidered. That might include unconscious bias training for interviewers or even using blind recruitment, which strips out identification details. It also means greater scrutiny of hiring decisions among senior managers. One firm we contacted, BentallGreenOak, has even set a target for 66.7 percent of new hires to be either women or people from ethnic minorities. One of our sources also stressed the importance of transparent promotion processes, backed up by training to enable people within teams to access senior roles.
Change company culture: Our interviewees agreed that asking recruiters to provide diverse lists of candidates or setting recruitment targets would not, in and of itself, create diverse teams. Such actions need to be backed by changes in corporate culture to ensure that people from a variety of backgrounds want to work in real estate finance, and so that companies in the sector understand the benefits of having a diverse workforce.
Our sources acknowledged that change is not easy. Good intentions at board level can fail to be adequately put into action throughout organisations. However, they suggested practical measures: management training to increase awareness of the experiences of people from different backgrounds in the workplace; mentorship schemes to support people in their jobs; and meaningful support networks where ideas and experiences can be shared. Crucially, incentivising people to create inclusive company cultures was highlighted. Rather than senior people’s objectives all being financial, pegging their bonuses to diversity and inclusion efforts could also focus minds.
Do meaningful outreach: There is an onus on the industry to make the next generation of real estate finance professionals more diverse. A good start would be through internships for students from under-represented groups at various stages of education. That might mean school pupils who would not typically consider careers in the industry, or university students without the right connections. Internships have traditionally benefitted family and friends, so making them part of the solution to the diversity problem requires targeted outreach. One of our interviewees said he has worked with his former school, in a working class and racially mixed area of London, to identify candidates. Another argued it is crucial to establish links with universities outside those with the most established real estate courses, or those with students from a mix of socioeconomic and racial backgrounds that better reflect society.
It will take time to create a more diverse real estate finance industry, but practical measures put in place today can yield results over the coming years.