2024 is shaping up to be a game of chess, not checkers
3 MIN. READ
In any year, the first quarter is typically a bellwether for how multifamily hiring will trend for the following nine months. Companies seem to gain significant strategic momentum coming out of the NMHC Annual Meeting in January, and many of our clients present us with complete annual hiring outlines at the conference. With the Federal Reserve signaling no reduction in interest rates until late in the year (at the earliest), the trends we've identified in Q1 will likely dominate the hiring conversation until 2025.
Less volume = more strategy = more senior executive hiring
With multifamily investment volume dropping by 60% in 2023 (to $117.5 billion, the lowest since 2014), it was unsurprising that our Q1 2024 YoY search volume was also down; however, the median seniority level of our searches has increased dramatically. This is a direct result of companies making major realignments, undertaking new platform-level strategies, and addressing significant succession planning issues that have been back-burnered for years. These hiring moves are finding a receptive audience in senior industry talent. Compensation growth has slowed right alongside investment volume and fundraising over the past two years, and we are seeing very senior level executives who have watched their carried interest value deteriorate make bold career changes to maximize their upside in the next cycle.
Property management leads the way
Nothing has defined our search work in multifamily more in early 2024 than multiple head-of-platform property management assignments for executives to bring upgrades in operational policies and procedures to substantial portfolios with plans to scale even larger through targeted growth (two examples of which are President - Property Management and EVP - Property Management). We are still seeing senior-level development and construction search activity in select areas (Development Partners, SVP/Head of Construction, SVP of Construction Management), and a growing demand for capital markets executives (EVP - Capital Markets).
“Like to Haves” are now “Must Haves”
In the highly competitive talent market of the past decade, employers were often willing to compromise on key requirements. The benefits of having a competent, trainable executive without the requisite amount of specific experience on the job far outweighed the risks of leaving a role unfilled. With tighter conditions squeezing margins, the need to have new employees make an immediate impact (and provide immediate ROI for their cost to hire) has become critical.
Confidentiality is on the rise
While maintaining the privacy of both our clients and candidates is paramount to us on every search, we are seeing a dramatic increase in the number of engagements requiring all parties to be signatories to NDAs. This is clearly a byproduct of the increase in seniority level described above. The need for this level of confidentiality often arises in sensitive situations such as replacing an underperforming executive, addressing succession planning, and protecting the company's strategic direction, expansion plans, or potential mergers/acquisitions. Disclosing these circumstances prematurely could disrupt operations, create uncertainty among employees, or betray a competitive advantage.
