Mcle Self-study Article: Diversity and Retention in the Real Estate Industry: Increasing Effectiveness and Reducing Bias in Performance Feedback Processes

• Publication year: 2020
• Author: Dr. Arin N. Reeves

MCLE Self-Study Article: Diversity and Retention in the Real Estate Industry: Increasing Effectiveness and Reducing Bias in Performance Feedback Processes

Check the end of this article for information on how to access one MCLE self-study credit.

Dr. Arin N. Reeves

Dr. Arin Reeves is a leading researcher, author, and adviser in the fields of leadership and inclusion, Arin studied business at DePaul University's College of Commerce, attended law school at University of Southern California, and received her Ph.D. in Sociology from Northwestern University. Before Nextions, Arin practiced law for several years and served as an Adjunct Professor at Northwestern University where she taught classes on law and society.*

I. INTRODUCTION

On January 1, 2017, the New York Real Estate News magazine published an article entitled, "Real Estate's Diversity Problem."¹ The lede of the article reads: "An entrenched culture marked by privately held family firms has largely blocked out minorities and made sexism a norm." The article reports that in the world of real estate "white men pull the strings," that "[t]he culture is closed," and that "entrenched discriminatory practices surrounding access to credit, commission-based pay, and a clubby, male-dominated culture have raised the barrier to entry." As for the representation of women in the real estate industry, the article notes that while residential real estate was found to have a good balance of male and female brokers and executives, the commercial world lags far behind. Data from various sources, including the National Association of Realtors,² continues to show that, in general, the highest echelons of real estate still lack diversity in ways that sharply contrast with the demographics of the cities in which the industry derives its revenue.

The real estate industry, like many others, has begun to acknowledge this disparity and is more actively studying the demographics of its workforce and investigating how to attract more women, racial and ethnic minorities, and other underrepresented groups into its workplaces. Many of these efforts are laudable and should be continued. However, as real estate sets out to create sustainable change in its workforce demographics, there are ways the industry can realize an even higher return on its diversity and inclusion activities. As explained in this article, after a company makes initial efforts to recruit and hire women, racial and ethnic minorities, and other underrepresented groups, a company must then focus equally, if not more extensively, on retaining and advancing those same individuals so they can grow within the company.

II. THE SHIFT FROM RECRUITING AND HIRING TO RETENTION AND ADVANCEMENT

For decades, the diversity and inclusion mantra in workplaces was that having a critical mass of an underrepresented population would propagate sustainable diversity and result in inclusive workplaces; however, reality did not comport with that mantra. Many companies found that while they may have achieved some relative success in the lower levels of their employee hierarchies, they were also experiencing high levels of attrition among underrepresented groups. Workers in these groups were leaving the company while the rest of the workforce was advancing from lower levels into management and leadership positions. In other words, a focus on getting diversity did not automatically result in keeping it.

In the last ten to fifteen years, research in the areas of diversity and inclusion has unequivocally found that while changing who you hire is important in diversifying your workplace, improving how you treat and manage your employees from underrepresented groups plays an even larger role in creating sustainably diverse workforces and inclusive workplaces. Importantly, the activity that creates the greatest positive momentum in the way you treat and manage people is how you provide feedback.

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In the pursuit of more effective diversity and inclusion, the shift to retention and advancement means that a company must ensure everyone has equal and unfettered access to effective feedback; however, that is not always as easy as it sounds. As performance management expert Paula Irvine explains, "[t]he task of monitoring performances, including the setting of relevant, reliable performance measures, is one that is often shied away from by agency owners and managers."³ And unfortunately, when workplaces are ineffective in their ability to give feedback to their employees, the greatest negative impact is felt by those who are least represented in management and leadership positions.

Moreover, our research at Nextions LLC has consistently found that the people who are most likely to leave firms due to a lack of feedback are the highest performers. High performers need more feedback, especially constructive feedback, to feel as if their organizations are investing in them. When such a lack of feedback is felt by high-performing people who are also in...