Among real estate organizations today, there is a growing recognition of the importance of human capital. The proof is in the training budget.
In a recent Watson Wyatt Worldwide study, "Competencies and the Competitive Edge," 70% of high-performing companies identified employee training andas the driver of future corporate success.
A 1998 industry report in Training magazine supports that conclusion, revealing that total dollars budgeted for formal training by U.S. organizations last year topped $60.7 billion. The majority of that training - 70% - was done in formal classroom settings.
Yet, increasingly, organizations are considering more alternative, high-tech options. For example, respondents estimated that 19% of all the formal training courses their organizations offered in 1998 was delivered via computer in some way, whether on CD-ROM, diskettes, online via the Internet, or online via the organization's internal Intranet. The remaining 11% of training is delivered through structured, on-the-job training, video, satellite teleconferencing and other methods.
Recognizing the significant changes that are occurring in the real estate industry as they pertain to training property management staff, the Institute of Real Estate Management (IREM) gathered representatives from some of the industry's major firms to discuss the future of real estate education at its Corporate/Government Education Leadership Forum held inlast August.
At the forum, the industry representatives addressed some of today's hot training trends, including blending corporate programs with off-the-shelf courses; customized courses; satellite education; client surveys to assess training needs; education for standardization of policies and procedures; external marketing as a tool to build internal teams; and measuring the value of education.
Participants at the IREM forum included representatives from AIMCO; Equity Residential Properties Trust; U.S. General Services Administration; Grubb & Ellis; HUD; Insignia/ESG; Neighborhood Reinvestment Corp.; Oakwood/R&B Realty Group; Prentiss Properties Ltd. Inc.; Presidio Investments Ltd.; Southern Management Corp.; Trammell Crow Co.; Transwestern Commercial Services LLC; Army Housing Division; and the U.S. Air Force.
Real estate training has gone through several cycles within the last few decades. While the early part of the 1990s saw a reduction in training due to industry layoffs and downsizing, the decade is concluding with a resurgence in the need to offer quality training programs in a variety of formats.
As John Combs, CPM, president of U.S. property services for Insignia/ESG Inc., AMO, in Irvine, Calif., explains, today's real estate organizations want to make sure all of their employees are working from the same baseline of education and training.
"With the consolidation occurring in the industry," Combs says, "we're seeing organizations assessing their training needs and developing strategic plans to implement targeted programs for employees."
As a result, many firms are turning to blended training where a real estate company will enter a joint venture with an industry group to teach a course using the company's own forms, procedures and operating policies.
"A graduate of a blended course offered and taught by IREM, for example, ends up being trained in the company's procedures but with the added benefit of earning CPM credentials," Combs explains. "The quality of training goes way up that way."
As real estate companies move toward the millennium, they understand that any employee training must have a direct impact on the bottom line. Training with no real return will not work. To that end, organizations increasingly are trying to identify what areas of training are most important to the customer.
Combs notes that Insignia/ESG has conducted 12,000 tenant perception studies and 400 property owner studies in which the client was asked what areas of service are most important to them as a way of targeting training topics for employees. The result of those studies was the development of WOW, a two-day customer service course for Insignia/ESG employees. The course focuses on both tenant and owner service needs.
"We borrow concepts in customer service delivery from the hospitality and retail industries," Combs says. "We want to do a training curriculum that is driven by our clients' needs. We're selling service that has real value to the client."
The Insignia executive also suggests that real estate training is still in its infancy. Within the next 18 months, he anticipates that the industry will develop measurement tools to assess real returns on training dollars.
"It's no longer sufficient to use an evaluation form at the end of a training course as a measurement tool," he says. "We need to develop real benchmarking tools to help us assess the effectiveness of our training and then implement incentive plans to reward employees for improvement."
Training is no longer a personal perk; it is a necessity of doing business and a formidable employee-retention tool. The methods of training will no longer be traditional, however. Increasingly, real estate education will go the way of technology - fast, flexible and customized. Corporate universities, Internet-based training programs and satellite conferencing are just a few of the new forms of training that real estate organizations will be using.
As Michael Lipsey, CPM, president of The Lipsey Co. in Longwood, Fla. , can attest, real estate management companies are willing to contract for quality education. Lipsey's company offers property-management training in a variety of formats, including classroom training, videotaped programs known as "Lunch and Learns," live Internet-based training programs via its website (www.lipseytv.com), and customized company-wide broadcasts on specific topics.
Popular topics for training in today's real estate management market, according to Lipsey, include developing ancillary revenue sources, reducing service delivery time for tenants, presentation skills, negotiation training, and improving financial literacy.
"Companies today are recognizing that training is essential," Lipsey says. "Training budgets are not being slashed as much as they used to."
Moreover, Lipsey says that today's real estate organization is more likely to offer a mixed-bag training approach, using every medium available to them, including home study, Internet, video, and customized education programs.
"In today's merger and acquisition climate, real estate companies have to train everyone with the same best practices," he explains. "Training is only one way today to build an esprit de corps, to improve morale and to understand what you have to do as a company to be successful."
Focus groups, skill audits and client surveys are all among the ways that management companies are identifying training needs. Any real estate training program of the future will need to involve measurement and justification of the return on the cost of training.
REITs and companies that self-manage are particularly aggressive in training employees. As Lipsey discloses, "We're finding that some of these companies are really enlightened when it comes to training, are improving skill sets and providing better service."
Companies such as Gale & Wentworth LLC, Jones Lang LaSalle and Trammell Crow have made a real commitment to invest in their employees' training.
"The management firms that invest in training and technology will have greater market share," notes Lipsey. "When you make an investment in your people and your systems, you are helping to ensure better customer retention."