'We Already Take A Lot Of Chances On Nepotistic Mediocrity': Tension Mounting Over Slow Pace Of Diverse Hiring

Derith Jarvis experienced déjà vu in 2018 when he landed his current role as JLL’s senior vice president and regional senior director of research and strategy.

It is the same position Jarvis, a Black Dallas-based real estate professional with nearly two decades in the industry, said he interviewed for seven years prior, when he felt he was a top candidate. Now, he said he is the supervisor for the person who ended up getting the job the first time around. What changed? 

“I was told very specifically they wanted a minority candidate,” he said. “Because of what I do and how small that world is, in Dallas specifically, there are only so many people qualified to lead research teams at organizations. At the time, I was probably the only minority candidate out there with experience.” 

In the post-George Floyd era, as companies and firms in every industry are touting their diversity programs, the reality of who makes up commercial real estate's senior leadership hasn’t significantly shifted. The issue speaks to significant tensions within corporate diversity efforts, as many firms focus on building the next generation of talent while corporate recruiting experts and diversity advocates say the best way to achieve change is to make it a priority.

“I don’t think we need to wait 20 years for a new class of people to graduate,” CRE Recruiting founder and principal Allison Weiss said. “I think we already take a lot of chances on nepotistic mediocrity.”  

Last year, a Bisnow analysis of the executive ranks of 91 of the largest commercial real estate firms found that roughly 11% of high-level roles were filled by people of color and 23.5% of roles were filled by women. While those numbers had grown slightly from the year before, that growth was largely concentrated among publicly traded companies, which have faced more pressure from investment firms and federal regulators to take action on diversity, equity and inclusion.

In conversations with executive hiring and recruitment professionals, it appeared few CRE firms or brokerages have any set procedures, processes or goals in terms of interviewing a set number of diverse candidates for executive openings. Bisnow reached out to five major brokerages — CBRE, JLL, Colliers, Newmark and Cushman & Wakefield — to ask about their interview and executive search practices and didn’t receive any responses. 

The idea of setting interviewing procedures and diversity benchmarks has been tried in other industries, most famously 20 years ago in the National Football League. The league’s Rooney Rule, a 2003 initiative that required teams to interview at least one diverse candidate for head coaching openings, hasn’t proven to be effective: There aren't many more Black coaches today than when the rule was instituted, and former Miami Dolphins coach Brian Flores filed a lawsuit last month alleging the rule is a sham.

“I think the issue is the confronting of bias,” Jarvis said. “We have to make commitments and hold people accountable for breaching those commitments. To change or fix a problem we intentionally created, we need to be intentional to fix it. Need to go into a process and be OK with intentionally hiring a diverse candidate.” 

CRE firms do occasionally request to have a certain number of diverse candidates presented during a talent search, according to Jackson Lucas Managing Partner Chris Papa, who focuses on executive recruiting. Up until a few years ago, it wasn’t something clients requested, he said, but with today’s push to diversify, it is “allowing recruiters to dig into different talent pools.” 

Papa said the real progress in CRE leadership diversity is coming from investment groups and institutional shops. They have distinct directives from investors, who will increasingly only steer dollars toward firms making progress on diversity. 

“Capital is what’s pushing it forward,” he said. “If Bud Light told the NFL they wouldn’t advertise unless they hired more Black coaches, the NFL would listen.”

Like Weiss, Papa said that the issue is an immediate one and demands more of a response than the industry at large is providing.

“Right now, the house is on fire,” he said. “Direct all the resources towards putting out the fire. Once it’s out, you can be more systematic.” 

Fixing the interview process requires more introspection, according to experts at Ferguson Partners, a leading talent recruitment and hiring firm. Director of Executive Search Ebony Mitchell said firms should rethink, reframe and reset expectations and requirements for executive positions as part of an overhaul of the hiring process. 

“If you’re looking at what makes a good leader the same way you did in the past, you’re looking at the same type of person,” Mitchell said. 

Ferguson Partners’ white paper on improving executive hiring found that real assets firms, like those in real estate, "need to immediately, frankly address their barriers to diversity in recruiting, retaining, and developing talent." That means an honest reflection on a firm’s DEI progress, as well as setting concrete goals and holding staff financially accountable for not meeting them. 

There is also a question of whether being interviewed alone can help. In niche roles especially, there can be a revolving door situation where the same diverse candidate gets called for interviews and doesn’t get hired, said Jarvis and other Black professionals Bisnow spoke to, like Lyneir Richardson, executive director of The Center for Urban Entrepreneurship and Economic Development at Rutgers.

“At the senior level, it’s not just about the interview; it’s about relationships, it’s about fit,” Richardson said. “The interview is half the process at the senior level. It’s about seeing the same guy or girl on the other side of transactions for the last 15 years.”  

That’s why Jim Simmons, the founder and CEO of New York-based Asland Capital, focuses on making informal introductions between colleagues. In the relatively small universe of real estate, if you aren't an insider, it is difficult to find out about hiring opportunities.

He got his break decades ago when an executive liked his investment thesis about steering capital toward unorthodox markets and neighborhoods and, in effect, promoted him to a new role without the need for a traditional interview process. If he had to follow more standard procedures to get promoted at that stage in his career, he said, he wouldn’t have been given the opportunity.

“Until individuals in the position to make hires believe diversity is a priority and that firms that are more diverse perform better, and that is believed and is embedded within organizations, I don’t think getting people in front of interviewers will change the dynamic,” he said. 

There is a persistent belief in what is termed the supply problem: that there simply isn’t enough diverse talent in the industry to fill leadership roles. Weiss said most of the time that is an excuse, that prevailing attitudes toward hiring within established networks and biases toward elite universities or degrees that not everyone can access have maintained existing biases and diversity shortfalls. 

Focusing strictly on growing the pipeline only delays the hiring of deserving Black executives, said Ernie Jarvis, CEO of D.C.-based Jarvis Commercial Real Estate, who is unrelated to Derith. 

“Corporate America said we can’t find people of color 20 years ago, and they condemned two decades by saying that,” he said. “This isn’t a new problem. It just came to light following the murder of George Floyd and further DEI initiatives.”

In many cases, CRE has focused on building up the talent pipeline as a way to make it almost inevitable that more diverse candidates are picked for future executive roles. The industry as a whole is focused on diversity, equity and inclusion but has “a long way to get to the level that it should,” said Tom McGee, head of retail industry trade group ICSC. 

A few years ago, he hosted an ICSC panel that discussed the Rooney Rule and its potential application to CRE. While he said it was mostly theoretical — unlike the NFL, ICSC can’t impose any policy on its members — his group and others are dedicated to closing the gap, he said. 

He said the focus was on a talent incubator approach based on the four ships: internships, scholarships, mentorships and partnership. ICSC has devoted $1M to scholarships in recent years, started a paid internship program that provides subsidized housing and set up partner arrangements with 60 universities, including historically Black colleges and universities. 

But when asked if there is a shortage of candidates of color who could fill higher-level roles, McGee said, “You know, I don’t know. I’m sure there’s lots of talented people who could lead organizations. I can’t speak to the size of the population.” 

“The future of the industry depends on solving this issue and building a robust talent pipeline that represents the U.S.,” he added. 

The industry is great at creating entry-level opportunities, but it is terrible at growing, supporting and grooming successful managerial talent in the midpoint of one’s career, Derith Jarvis and Richardson said. This often leads to candidates of color leaving for their own entrepreneurial pursuits after getting frustrated with their slow pace of advancement up the corporate ladder.

“It’s frustrating because there’s no transparency,” Derith Jarvis said. “It’s frustrating because we keep hearing statement after statement about diversity, and we don’t see any tangible goals or numbers behind those commitments. The frustration keeps growing.” 

At a time when the conversation about change is perhaps louder and more visible than it has been in years, the lack of clear forward momentum toward equity at the top can be more dispiriting. 

“It’s unacceptable to say we can’t find qualified people, that they don’t exist,” Ernie Jarvis said. “Challenge your executive search firms to find them. It should be part of the compensation packages for executives, how many people of color you hire for market-facing positions. Go hire somebody; the solution is easy.”