Go with the flow: The best strategy in a downturn is to stick with the basics of good business practice, while developing back-up survival skills
Make no mistake, from retail to banks to agencies, jobs are being cut in the property business. In March, Tesco said it was preparing to make 10% of its property team redundant.
In April, it became clear that Royal Bank of Scotland would be making cuts in its overall property team after it purchased ABN Amro.
Just a week later, it emerged that Quinlan Private was making a dozen people redundant.
In May, Knight Frank started redundancy procedures with three members of its Manchester office, with CBRE also involved in a review of its northern business.
In May, Savills made 14 staff from its residential development sales team redundant and earlier this month DTZ told its UK staff that 50 jobs were being cut.
Developers’ and housebuilders’ job cuts have been more savage. Taylor Wimpey has closed 13 offices across the country, with the loss of 600 jobs, while Bellway has said an unspecified number of staff in the west of England have been made redundant because of the housing market slowdown.
It is no surprise that the residential market has been hit first and hardest, as sales dry up, but many commercial agents are feeling a good deal less secure in their jobs now than they were a year or two ago.
So what should everybody be doing to weather the downturn? Lorna White, human resources director at Savills, admits that “nobody quite knows which way the market is going to go”, but adds that continuing to do the basics well will put agents in a better position to take advantage of the recovery when it comes.
She says: “Our view is definitely that keeping on listening to clients is crucial, even if there isn’t as much business at the moment, because that way you will be better placed when we eventually come out of the tunnel.”
White does not anticipate any large-scale redundancies, although she does admit that the firm is “hunkering down and looking closely at additional discretionary spending”.
Alistair Elliott, head of commercial at Knight Frank, says that it too had no plans for wholesale redundancies, partly because “we don’t employ people for one or two years, we employ for 10 or 20”.
Elliott also argues that although some sectors of the property market, such as investment, are doing badly, others are looking good for the business.
He says: “You have to look at it overall. The investment market has been out-performing most other markets in recent years, many of which have not been that exciting. In the past few years many of our teams have been doing well, but in challenging conditions.
“And just as not all markets were equally successful in the past few years, so some are more buoyant than others now. Student accommodation, for example, is becoming big business. Healthcare is expanding rapidly.”
Nevertheless, Elliott admits that the annual performance reviews of staff “have a different perspective now that the market is more challenging”.
This may be more worrying for the junior staff, although the big firms all say that reviews are even-handed and judge everybody on their own merits, whatever their rank in the firm.
Elliott says: “I suppose you might get a more considered approach with a salaried partner but, ultimately, everybody needs to do their job. It’s just that the need for that is even more acute in a downturn.”
Help in a crisis
For those who do lose their jobs, professional associations can be a source of help.
Among those already geared up to help out in the downturn is the Investment Property Forum, which, in June, agreed on a package of measures to help members who were facing redundancy.
The measures include making evening and breakfast seminars free to members so that they can keep up to date with the market and make new contacts launching a job site on the members’ section of the IPF website organising self-help groups among members affected and identifying around 20 senior IPF members of different specialisations who are willing to provide informal careers advice.
Andrew Hynard, chairman of the IPF and director of capital markets at Jones Lang LaSalle, says: “The IPF is keen to support members in their search for new career opportunities and to keep them informed as to what is going on in the investment market.”
Should you find another job?
Some jobs are better than others in a property downturn. Richard Dickson, head of the new project management consultancy at the DBK Group, took on his job partly because of the change in the market.
He says: “The way I saw it, more and more people are going to outsource development consultancy, because everybody looks to reduce their own headcount.”
Dickson moved to DBK in April from Calthorpe Estates.
He says: “At the time, Calthorpe were looking more and more to consultants and I saw this as a good opportunity.”
Dickson argues that because agents earn money by fees on completed deals and fewer deals are completing, the reduction in staff for both agents and developers will continue for the time being.
He says: ” I just took the view that the market will move increasingly towards outsourcing, so this was a good place to go.”
If you can’t do deals here, do them abroad
One of the changes in the property market since the last major downturn is that the big agencies have become increasingly international.
This means that agents with mobility could now choose to move from the UK to more buoyant markets such as Dubai or Hong Kong.
This trend is difficult to measure, but among those who have noted it is Ben Elder, director of business development at the College of Estate Management.
The college, a not-for-profit charity, which operates as a distance-learning institution, has noticed that more of its students are conducting studies from overseas.
Elder says: “We have around 4,000 students, with about 60% of them in the UK, but we have started to see a trend for them to move to places like Dubai to work, but carry on their course from there.”
These are not all young students. The average age is now 34 and some students, such as a 73-year-old Ethiopian man, do not fit the typical agent profile at all.
Elder says: “We haven’t noticed any fall-off in the number of students yet, although the time we would notice it would probably be September.”
In any case, as most training institutions point out, getting some training during an industry downturn is one of the best ways to make the best of any subsequent upturn.
