If there is one industry today, propelling the country’s economy on a major scale, it is the burgeoning real estate.

As per recent studies, the industry is growing at 20 per cent per annum and is expected to soar further.

According to a report, India’s estimated demand for housing and real estate will grow at around 14 per cent annually. There will be approximately 400 new township projects over the next five years, spread across Tier I and Tier II cities in India.

Coming off the fragmented market with a handful of family run businesses a few decades ago, real estate in India is today heading towards an intensively competitive market with many local and foreign realty giants exploiting the realty potential of India. And the entry of IT/ITES has only added to the boom existing in the market.

HR challenges

Given the fact that the real estate industry is on the brink of becoming the driving force in propelling the economy, the responsibility of the Human Resource function had never been as important as it is today.

This can be gauged from a recent study, which suggests that the housing sector alone in India is likely to generate around 40 lakh new jobs within a decade with a whopping investment of $670 billion. With such expanding opportunities, the job of choosing and retaining the best intellect available in the market is no mean task.

Lack of quality talent

Shortage due to too many projects: The quantum of quality manpower, with expertise in real estate, has not kept pace with the realty growth the country is witnessing. While, a large amount of talent has been absorbed in mega infrastructure projects, the perennial growth of the industry has only added to the dearth in the existing talent pool within India. It thus becomes imperative to reach out and tap talent from overseas or Indians who have gone overseas and want to return.

Shortage of talent exposed to international standards: One also cannot ignore the customer expectation and their knowledge base, which has increased significantly over the years due to globalisation and extensive travelling. That puts further pressure on the real estate developers or contractors to be able to deliver products and services, which are world-class.

For this, it is imperative that the human resources working on these projects have the exposure to international quality standards. Therefore, the challenge for real estate companies while recruiting is also to ensure that they either hire an employee with such a background or else, at least send him/her for such exposure programmes.

Shortage due to less supply from educational institutions: At one time, due to the high demand for talent for the IT sector, most of the high potential students had moved to courses in computer science etc, which left the next level of students to get into the civil, electrical or mechanical fields.

And among these many would not have pursued their jobs in their respective specialisation since the salaries then offered in those fields were low compared to that of other sectors. In particular, the lure of the lucrative IT sector did create a gap in the supply of good talent for the real estate sector.

No wonder then, that even with such an impressive pace with which the industry is growing, real estate is an industry vertical only a few consciously choose. Call it a lack of strong brand presence or a benchmark, the industry has not been able to draw professionals and have been remiss at actively developing existing middle tier talent. Only recently have some of the universities or colleges begun offering courses in real estate.

Retention of talent

The attrition level last year, was 15 per cent while the industry trend was 12.80 per cent across the board. This could have surely gone up further with a plethora of opportunities flooding the job market.

Some of the strategies adopted by the companies to retain staff would include, paying competitive salaries after benchmarking, identifying key performers and giving them quick career growth, binding employees with long term incentives like employee stock options with a lock-in-period or profit sharing etc.

Employers have also understood the importance of good corporate governance and a transparent culture both for attraction and retention of staff.

Managing expectations: In a drive to attract the best talent, most of the companies have become aggressive in paying salaries. Despite the fact that the industry had given a salary increase of 22.5 per cent during last year whereas the market trend was only 13.7 per cent.

For the senior management staff, the salaries have grown more than 50 per cent in the last two years.

Therefore, the challenge for HR in realty is to manage such expectations of candidates and still recruit staff without disturbing the internal equilibrium.

Most of the companies have adopted a good plan of paying employees a certain fixed salary and vesting a good amount also through performance pay, which is given either on a half yearly basis or yearly basis based on the performance. This works dually as a retention cum attraction tool.

Inculcating values: Earning a quick buck has been the buzz word in the real estate sector. In doing so, quite often, companies have forgotten the need for ensuring quality, integrity and commitment to customer satisfaction.

It is the challenge of HR with top management to drive the values of quality, integrity and customer service. Most of the companies have adopted the rule of ISO certification so that their employees follow certain processes to ascertain that quality is not neglected. In most of them there is a separate customer service cell apart from inducting all staff to facilitate such services to their customers.

A majority of  companies now also emphasise on transparent dealings and methods while doing business. Of course, this will be an on-going challenge since the sector has enough weak links outside their companies, which also need to be changed.

Lack of second line leadership: Most of the companies in India in this sector have evolved through proprietorship.
It is only during recent times that we are seeing more and more MNCs setting foot in this sector in India and they have the cream of talent at the first level. The challenge for HR is also to develop the second line of management and if possible even the third line, which is capable of undertaking enormous work pressure from the top line.

This would also help the top management to delegate effectively and move on to focus on the core areas of the business.

Some companies have identified this as a critical requirement and they have already started building up this crucial next line.

Unlike in the past, when manpower in the industry was predominantly specialised in the engineering background and other teams comprised of small time brokers or agents, now that teams encompass most other functions as well, the need of the hour is for those heading HR to understand the business and bring in policies and processes, which contribute to the dynamic business environment.

The top management has to work with HR heads to see how best they can source quality personnel, then retain them with an emphasis on learning and growth.

The writer is a Director: HR and Marketing, TSI Ventures (India) Pvt Ltd.