As if there weren’t enough pressures over price, turnaround time and business opportunities, another war is underway in the trenches of the environmental due diligence market, and in the crosshairs—talent. And experience. And connections. And did we mention TALENT? Environmental firms across the country are fighting to keep their top people, while at the same time looking to shark talented folks from their competitors. All of this bodes well for environmental professionals, who are emerging as the “winners” in this battle for top experts.
Sound dramatic? Maybe. But business is business, and the property assessment market is looking healthier these days than it has in a long time. Seventy percent of respondents to EDR Insight’s Quarterly Property Assessment Market Survey expect Phase I ESA volume to increase this year over last, and for the first time in more than two years, the number of respondents who characterize commercial real estate investment as “increasing” exceeds 50 percent. Commercial real estate barometers are also trending upward slowly. Lending on commercial properties was up 24 percent last year over 2011, and property transactions were up 28 percent. A broader universe of lenders and property buyers translates into more potential clients for environmental due diligence professionals. In preparation for a busier project pipeline, more environmental firms are looking to hire on more staff. The percentage of respondents to EDR Insight’s quarterly surveys of environmental professionals who work at firms that are hiring has hovered around 16 percent over the past eight quarters, a six percentage point increase over the earliest eight quarters shown in the graph.
Broad Range of Expertise
Clients are under pressure to do more with less. Lenders are shortening their lists of preferred vendors for ease of management. Demands for efficiency in a still-tough economy are intense across the board. These pressures all point to the need for firms to offer a wide mix of skills and expertise to stand out from the competition.
The move toward working with shorter preferred vendor lists makes the competitive landscape even fiercer. “That’s why it is absolutely critical to be able to provide outstanding service to our clients, and have the ability to recruit and attract top talent for them. If a client knows you provide excellent service and work with top talent, it creates ‘stickiness’—they’ll have a high degree of trust that your firm can perform across multiple markets and multiple service lines, and they’ll stick with you,” says Sean Rigsby, senior environmental recruiter and managing partner at Rigsby Search Group, LLC.
In a market struggling to recover from the worst recession in decades, the challenge for every firm is to build up its business any way it can. For some, this means actively looking to hire away high-end professionals from other firms—and acquiring new client lists in the process. Others are attending leading conferences and workshops for the sole purpose of getting business cards from professionals to fill open positions. Still others are targeting professionals who might help them build up business in new niche market, like M&A or telecom, or branch out into a new expertise like Property Condition Assessments or energy audits.
Environmental Professionals in Flux
Environmental professionals are starting to become more active in the job market. The good news is that this trend indicates that the market is improving, says Rigsby. After 20 years in the industry, he has seen the market go through ups and downs. “During a recession I would have candidates say that they were interested in making a move, but because of the recession they thought it would be in their best interest to stay with their current company. The recession really made candidates very nervous, and they would say ‘at least I have a job, so I am going to stay put for now,’’’ he says. When this recession hit, “a lot of companies used it as an excuse to let go of what they viewed as their lower-tiered or underperforming employees. I also saw instances of companies asking their employees to take salary cuts, and employers putting their hiring processes on hold.”
Nothing yells confidence like hiring, and based on the 1Q13 survey results, 15 percent of respondents work at firms that are currently shopping around for new experts. “Over the past six months, our firm has received 40 new search assignments, and just under a quarter of them were totally unsolicited from companies that we had never worked with before, and were totally separate from our regular long-term clients,” says Rigsby. In 2012, RSG was contracted for over 60 search assignments, and this year they’re on track to do 100.
Many environmental firms are starting to feel competition intensifying as they hunt for qualified experts. “In past years, there were more people in the job market, and we were able to add some great talent to the team [through recommendations],” says Holly Neber, president, AEI Consultants. “I have noticed that competition for highly qualified staff has been heating up in recent months, and there seems to be an uptick in movement of people from firm to firm.”
As a result, many environmental firms have had to adapt and use a range of recruiting strategies. “Finding good people is becoming increasingly difficult. Our experience is that there is no one solution or method of finding talent. We use a variety of methods, including personal referrals, networking, headhunters and social media,” says Richard Dagnall, senior managing director of CBRE.
Retaining Valued Employees
All this movement in experts from firm to firm calls for serious attention to be given to how companies retain their valued employees. Salary and benefits are important, of course, but finances are not the only factor in the decision to leave or stay in a current position, and savvy employers who aim to retain their people know this. “We work hard to provide a vision for a career path. I started at AEI as a Phase I project manager in the 1990s,” says Neber, “and worked in various roles before transitioning to my current role as president. I hope that my own history helps support the idea that as the company grows, we all gain new opportunities.
“We also became an employee-owned company this year, which means that the value we all create together is shared through an ESOP program,” she adds. Longtime environmental recruiter Rigsby cannot emphasize enough the value of a shared sense of ownership. “Having an opinion and being counted is important, feeling like you’re a part of something,” he says. This is one of the key elements that employees are looking for from employers.
Another key to keeping staff happy, says Neber, “is to provide as much direct client interaction as possible, and really emphasize understanding the client’s goals with each project. Building a relationship and becoming a client’s trusted advisor is definitely one of the biggest motivators.” To that end, AEI has structured itself with dedicated client teams, “so the staff has an opportunity to build those relationships,” she says.
Last but certainly not least is the work-life balance. AEI recognizes that retaining EPs requires “matching staff personal and career goals with our needs as a company,” says Neber. “Since we hold a long-term view, and people’s personal circumstances change over time, we like to look for creative solutions to build a win-win, and a sense of loyalty and longevity that is ever-changing and adjusting as the person’s priorities and goals change. Whether it be related to working remotely or flexible schedules, we are very open to those discussions.”
CBRE has a similar approach to keeping its environmental staff satisfied. “Retaining people is critical in today’s environment,” says Dagnall. “We offer flexibility between working from home or out of an office. Additionally, we offer creative compensation packages that reward high productivity, top talent. Creativity and flexibility are important in our ability to meet the needs of a wide variety of professionals.”
Job Postings: It’s A Buyer’s Market
Thinking about making a move but feeling a bit gun-shy? Rigsby notes another sure sign that the economy is improving in the environmental sector. “It’s starting to become more of a candidate-driven market now. People are receiving multiple offers from job seekers, and counter-offers from their current employers,” he says. Also contributing to the ease with which firms can find top talent from competing firms is the high degree of visibility awarded to all types of professionals via social media. “The rise of social media, such as Commonground and LinkedIn, has allowed individuals to market themselves whether they are intentionally seeking new employment or not. Whether it is in the capacity of showing their experience on various technical issues or their interest in networking within the industry,” says Dagnall.
Being smart and charismatic may get you in the door, but what are firms really looking for? Rigsby has been seeing a huge demand from clients looking for senior level consultants that have had a successful track record in selling and doing work. “[They’re] hiring consultants based on who they know—can they bring clients with them, and develop contacts?” Not surprisingly, experience matters in any market—up or down—especially when hiring top-level EPs. One of the major business challenges coming out of a recent EDR Insight survey of environmental professionals was finding new staff with a solid background in conducting Phase I ESAs. Today, there is a value-add, not just a “check the box,” mentality. The value-add is “I need to get a good answer fast because I have fewer people and more work to get done in a shorter timeframe, so getting junk cheaply isn’t going to help me.”
Now that the environmental due diligence market is stronger, environmental professionals may be tempted to move for more money. Rigsby cautions against this. “I always tell people ‘We are at our jobs more than at home. It’s not 9-5 anymore,’” he says. “You really want to enjoy what you’re doing, to feel like you’re in the right place. You want to be in a job where you can see yourself for a long time.” In one case, he says, a recent candidate of his had multiple offers, but took the job with the lower pay because he or she felt very comfortable with the management and the outlook of the company.
Developing the Next Generation
It certainly seems like the battle for the best in the industry will not end anytime soon. Some people left the environmental due diligence community during the downturn. And an aging workforce means that firms could lose their most experienced consultants in the near future. “As the market improves, I think all firms are going to find it more difficult to find experienced talent,” says Dagnall. “Many firms have been reluctant to hire entry-level personnel because it takes five years before they can qualify as an environmental professional and operate solo on a project. At the same time, many of the candidates interested in the environmental field have been gravitating toward sustainability as the direction of the future.”
Instead of fighting over talent, Dagnall says, environmental due diligence firms can grow top talent from within. “I think going forward more firms will need to invest time and resources in developing the next generation of EPs,” he says. “We have started hiring younger professionals in more of an apprentice capacity, hopefully creating the EPs of the future. These apprenticeship positions are usually assigned to an experienced EP. The person assists with research and shadows the EP on local inspections, gaining the experience they will need to qualify as an EP in the future.”
As the market heats back up, managers at environmental due diligence firms looking for new staff should be sure they are using all of the new tools at their disposal, including social media outlets. At the same time, it is critical to ensure that steps are taken to maintain high levels of job satisfaction to prevent star employees from being lured away by competing firms.
NOTE TO READERS: EDR Insight wishes to thank EDR colleague, Pat Coyne for planting the seed for this Strategic Brief, and for peer reviewing the final product.