BOMA Opener Sounds Human-Capital Alarm

NEW YORK CITY-A broad range of topics flooded the opening day of the Building Owners and Managers Association’s centennial convention, taking place at the Jacob K. Javits Center here. But discussions about the influx of foreign capital, TRIA and cap-rate directions almost seemed to take a back seat to one topic that kept streaming into the dialog–the human capital crisis.

In a morning session entitled “Building Intellectual Capital,” P. Marc Fischer, a Baltimore-based Transwestern SVP, laid out the scope of the problem, a problem that most experts agree stems back to the exodus of talent during the tech boom a decade ago. Quoting statistics from CEL & Associates, Fischer said that some 71% of real estate firms recognize “that there is a talent crisis,” from which there will be little hope for relief for the next five to 10 years. But while 81% of the firms claim that retention of top talent is a number-one priority, and 75% are looking at revamping compensation plans to boost staying power, “only 32% have a talent-management program.” Rather than attempting to train properly and foster talent, Fischer said, most firms leave their next top models to “sink or swim.”

The crisis was underscored twice during the general luncheon session. In an overview of the industry and the progress made by BOMA, chairman Kurt R. Padavano showed that the leak in the labor pool is not just a real estate problem. In fact, he stated, there are 80 million Baby Boomers and 35 million Gen-Xers–an inventory cut of more than 50%. Worsening the retention problem is a current trend toward job flips, he said, pointing out that people shift jobs anywhere from 2.5 to 4.5 years.

The crisis came up again in Real Estate 360, a luncheon panel discussion moderated by Cushman & Wakefield president and CEO Bruce E. Mosler. The discussion with heavy-hitters from investment and lending disciplines, touched on all of the typical issues–cap rates, rental rates and the foreign view that America is a land for sale. But then Mosler asked the group what issues kept them up at night.

A terrorist event was a typical answer, as was irrational exuberance. But Tom Santiago of Citigroup summed up the clear and present threat of the people problem. When asked what makes him lose sleep, Santiago said simply, “talent management.”