Real Estate Industry Compensation & HR Consulting

The real estate industry comprises a variety of firms who play a role in buying, selling, managing, and developing real estate. From an operational perspective, companies in the real estate sector need to navigate through a complicated web of federal, state, and local regulations, which can exacerbate business challenges, as cash flow is often tied to closing deals or signing new tenants.

This complexity affects how you must structure roles, responsibilities, and compensation to adhere to regulatory requirements and compensate your workforce as deals close.

According to VerticalIQ, the real estate industry has achieved strong growth over the past few years, with new home sales and construction spending surging, and was projected to grow at ~6% (faster than the rest of the economy).

Interest rates have posed challenges to the industry, with some homebuyers priced out of the market. Nonresidential real estate construction, which often relies on taking out loans to finance projects, can be similarly impacted by interest rates.

The labor market saw similar trends, with employment figures achieving significant growth over the past few years but now starting to flatline (per the U.S. Bureau of Labor Statistics). Notably, the commission structure for many real estate agents changed, requiring buy-side agents to sign compensation agreements with their clients. Additionally, real estate firms have invested heavily in technology to automate paperwork and support property research and management.

Amidst industry dynamism, cash flow challenges, and technological transformation, companies in the real estate industry are focusing on building flexible compensation programs that attract and retain high caliber talent, while being responsive to the needs of the company.