Lack of Talent in Commercial Real Estate or Gen Z Issues?

Hard to say with a sample size of 4-5... There's loads of biases going on with this 

Most definitely. I forgot to mention that I know I'm not dealing with a large sample size but when I say I've trained 4-5 analysts on my team, this doesn't include the 10-15+ associates and interns that I've trained as well. Out of 20 or so analysts or employees that I've trained in the past few years, I really only saw maybe 2 or 3 of them taking the initiative or being proactive in trying to progress and learn more. You would think it's because of a lack of talent or hiring the wrong people but I live in a HCOL area with top notch universities and we try to hire based off of fit, internship or actual experience and passion.

I'm a part of the hiring process but my superiors always seem to pick candidates based on experience rather than fit and passion which has pushed me to think that I really do not care what school or grades someone achieved in college. I would rather hire a high school dropout who has a huge passion in the field that they want to jump in because imo, it's easier to hire and teach a passionate candidate rather than hirring an experienced and entitled candidate who is not as passionate about their job/career.

My analyst works really hard. Definitely puts up more effort than I do.

Perhaps brain drain to other industries?

Attrition, especially brokerage, is natural. I wouldn't say there is a lack of talent, but there are a lot of companies that take analysts out of undergrad now that didn't in the past. That's making the applicant pool weaker. Then there's a larger emphasis on life outside of work and the office so these analysts are probably seeing their tech friends work fewer hours but get better pay. I'd "blame" the tech industry more than anything. You also seem to answer your question a bit with the groups hiring practices. 

I was at a dinner recently (lawyer client dinner with ~20 senior people from different firms) and this very topic came up as we were talking about interns and return offers. Pretty much everyone agreed that while there are a ton of smart kids coming out of schools that are technically proficient, in their quest to craft the perfect resume, they forgot to develop personalities. 

Along the same lines, we are currently hiring and just had an associate level person come in and smash our case study, but the feedback from the entire group after the super-day was that he was smart, but very socially awkward. 

The airport test is real and Gen Z isn't passing.

I’m not old enough to have a comparison point between analyst classes in real estate finance from a management or tenured employee perspective. I do know some seemingly lazy and strange people from my class at a BB who have progressed decently in their careers at the bank and outside of it 5+ years removed. Looking back, a lot of their behavior had to do with either a lack of interest in the job or general immaturity. The ones who did not care were the quickest to leave on their own. The well meaning but immature ones got enough beatings on the job that they were forced to grow up or were softly pushed out.

With the proliferation of the internet, including forums like WSO, you might have a greater pool of candidates who are solely focused on “exit opps” and are doing the bare minimum before they leave. Even though building a good relationship with you and striving for a better skillset and more knowledge would be of benefit towards their goals, they could be narrow minded and are just bidding their time. This leads us to the next problem, which is EQ. Some of them may not see your efforts as mentoring and view the interactions solely as more work. 
 

You can’t completely solve for the interest aspect of mediocre juniors. If someone is just building their resume for Blackstone or whatever, then you can’t stop them. However, you can be extremely explicit with setting expectations and explaining some of your intentions and actions. This would address some of the negative impact of low EQ. At the end of the day, you need as much ethical leverage as possible via your employees’ skillset and execution. It’s frustrating that your niceness is not being received the way you expected, so look into adjusting your approach, observe any changes in behavior, and treat the juniors accordingly. 

What I mean by this, is that most of the interns and analysts that we are hiring out of undergrad seem extremely entitled or feel like they are above the grunt work that everyone started with early on in their careers. 

I'm pretty sure every single generation has said this about the generation after them. 

I'm a millennial and I certainly remember the time where everyone shit on us. Give it another 10-15 years and the zoomers will be shitting on whoever comes next. 

Try to rise above it and remember what it was like to be young. 

Echo a lot of the same sentiment and I'm a similar age. I ultimately think a lot of this, while not entirely an excuse, is a result of the smartphone/distractions era. We're young enough to be technologically savvy but we did experience life before this level of screen time/technological immersion, social media, etc. So again, while not entirely an excuse, I firmly believe these factors are so much stronger than most will recognize. This stuff is scientifically very addicting and it prevents young people from building healthy habits to become consistently productive. Attention spans are shorter. I will even admit that if I do not put concerted effort to remain disciplined, I can periodically easily swing to the side of Gen Z distractions - basically conceding this stuff is real. And this is after having already established my career.

I will also add that by browsing other forums, many young people today seem completely jaded by the economic conditions they have inherited. I'm sure I will receive a range of emotion (probably mostly negative feedback on this board), but again I do concede how easy/reasonable it is to feel jaded by today's society. Inflation over the past few years on top of decades of inflation that real wages haven't come close to matching has made everything so much more expensive, all industries are more competitive than they were 20-50 years ago, and that even if you graduate with a solid degree and put in effort earning what sounded like a great wage 5 years ago in many major markets where these jobs are you are not saving nearly at the rate all other modern generations saved at. I hear a lot about how "why work extra hard when it doesn't tend to result in proportionately greater compensation?" - I think elements of this are true, although real estate likely not the best example, largely dependent on role/specific niche.

TL/DR - young people are deciding their time is the most valuable thing given how much more challenging it is to afford a comfortable upper middle class lifestyle while saving for retirement, compared to generations prior, and therefore why kill yourself working when it may not result in proportionally greater earnings/lifestyle (or even remotely close to proportionally, since we know exactly proportionate is not realistic in most industries).

I worked very hard the first decade of my professional career and I am starting to value my time much more now that I have a family, among other reasons. Anyway, to be abundantly clear I don't think all the above fully justifies the attitude of many Gen Z'ers, but lends credit to elements of it. I have also spent tons of time training many young (barely) professionals and I am consistently left with the thought that "they" could achieve much more professional success with only a little more effort, simply because of how prevalent the zero effort and entitlement is (so pervasive that by putting only a little more in could distinguish themselves from peers). That would only remain true if the status quo remained largely the same, i.e. if only a small % start putting more effort in their careers. If it became commonplace, they're essentially back at square one (today's status quo), and perhaps therefore this is one big generational understanding that they're in it together (w/ minimal effort) so to speak. This possibility sounds a bit farfetched, but maybe not given the prevalence of social media use. Mainstream culture today is entirely created on the internet, not radio and TV anymore.

More generally, I ultimately think all the spats between generations is pretty exhausting and illogical. Do so many seemingly educated people really believe people born 15-20 years apart are so drastically inherently different? From a scientific/sociological/statistical standpoint that does not make sense. People (and we're talking about a diverse set of millions/billions of people) are largely a product of their environment, and it is unequivocally more challenging to build a comfortable upper middle to upper class life in today's economy than it was just 20-30 years ago. You can't live in a major market and easily afford a 4-bedroom house and family on one income now.

I have seen the same thing with recent grads and heard the same from my colleagues. It actually got bad enough to the point that one company I was at just stopped doing on campus recruiting and instead focused on hiring people with 2-3 years experience and have proven themselves somewhere already. Before anyone says something along the lines of 'every generation thinks this about the younger generation,' the person that was in charge of the on campus recruiting has been doing it for 30+ years and noticed a distinct difference in the people coming out of school over the last 4-5 years. A large portion of the kids are entitled and want all the benefits of working their ass off without having to put in any of the effort. They are pessimistic about life and this shows up in their attitudes about work and what they should be required to do.

Social media and the internet in general really did change everything. I don't think it is a coincidence that we are seeing these issues pop up in the generation that had social media since middle school. During the most impressionable years of their lives they consumed a steady diet of 'woe is me' to the point that 'doomscrolling' became a common word.

I wish I had the opportunity to work with you. Recently was laid off/let go from a group that really didn’t give me any training at all but kind threw me out in the waters knowing I was in a brand new industry. I think you’re doing everything right, not all gen z are bad. Find ones who are curious to learn. I would’ve wanted to work for someone like you.

Gonna take the opposite stance here and side with the kids on this one. I’ve been out of school for 5-6 years now and man corporate America really does blow, man. I can’t really blame them. Finance gets so hyped up and I will say, SOME aspects of the job are interesting, but gd it is such a slog. At the end of the day everyone in banking/consulting/real estate/PE is a glorified corporate drone just like the rest of the “shitty” jobs this site loves to talk bad about. How can someone get excited about working 14-16 hours a day in a midtown cube farm paying $2500/ month on an apartment and $15/ day for a shitty salad every. Single. Day. This is not the life boys.

Also, completely okay with them asking for raises and pushing back. Finance culture is so antiquated and it’s about time we had a generation who says “fuck this” and actually doesn’t put up with the boomer bullshit. Keep asking for more money and do as little as possible. I kind of love it. Fuck the banks.

Corporate America can suck ass but I totally get you when you mention that finance is hyped up and the day ot day can be a slog. One thing I'll have to argue back with you on this is that the new hires we bring on are all excited and come from real estate backgrounds. They also work around 8-10 hours a day on average and rarely ever work past 12+ hours. Most of my hires also live at home with their parents since we're from a HCOL area where they want to save a little extra cash so making six figures coming out of college and getting experience from one of the top investment sales team in our firm sounds like a crazy good deal to me.. 

This is also probably a little different from your experience since we don't work for a bank and our culture is much more similar to that of a start up. We're based in the West Coast if that matters so our culture is relatively relaxed and not uptight at all. I'm completely fine with analysts/associates asking for raises but how would you feel if you started your own company/team and your employees that are working the bare minimum start asking for raises 3-6 months into their job? Would you give your employees immediate raises when there is clearly a lack of effort to excel in their jobs? 

We have recently hired credit analysts who literally take way more time and effort to train than we get out of them in output asking for raises after like 6 months on the job. I’m generally sympathetic as a millennial fed a steady diet of bullshit from the boomers, but come on. 

To me - this is just life. A lot of people want more pay and better hours with no extra work. I would argue most people just want a good 9-5 with pay enough to feed their family and do a few fun and nice extra curriculars and just go home. Most people don’t want to go the extra mile or the money and stress that comes with it if you hit the jackpot and keep moving up. 
 

Also - every generation since the beginning of humankind has complained that the next generation is lazy and doesn’t want to work as hard. 

“The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers.” - Freeman, 1907

gtfo, literally every generation complains about the last one. I’m sure I’ll be complaining too in 20 years. 

Instead of trying to learn and progress in their careers, I've noticed that the majority of 20-25 year old analysts/interns/associates on my team want to remain stagnant. They talk about wanting better pay and good work life balance but they're not willing to put in the work to reach that point.

This seems to be the crux of your complaint... which I don't understand.  You hustled and want to be a rainmaker or whatever.  These kids want a steady job, decent pay, and to be able to have a life outside the office.  What is wrong with that?  You shouldn't have to "put in work" to have a work/life balance, or a living wage.  Working 12 hour days to make ends meet is kind of insane.  Sure, if you want to be making millions of dollars, or be the best at what you do, then doing just enough to get by won't get you there (though, it's brokerage, so... who cares, there isn't any skill there anyway).  But there doesn't seem to be anything wrong with a younger person thinking "I don't need to eat the world, I want to have a life worth living."  Hell, by definition most people won't reach the top of their respective career path anyway, so accepting that early on and not becoming embittered by putting in tons of hours for no reward seems healthy, not like a problem

Read this book.

I am a younger millennial sales broker as well at an institutional brokerage firm. 

Out of the last 4 analysts 2 were studs, 1 was good, and the last was fine The interns are all generally fine. Maybe a dud or two.

Everyone leaves my team eventually because the pay sucks, the environment is chaos, and the work is hard. 

I think you have some weaker talent for some reason... I used to work in the corporate world and started that job with hundreds of new analysts. People move on and find different career paths. Some don't work out but everyone generally worked hard.

While I work hard and am not "made" yet, I do think us folks in the younger generation have it A LOT harder than older folks. 

The cost of everything truly important is skyrocketing every year (housing costs, health care, education). A lot of markets are getting institutionalized by players with infinite pools of capital (either institutions with "near" zero cost of capital money or HNW money that made their buck and are sitting on oodles of money and assets). 

This article on FT came out today which is interesting.

https://www.ft.com/content/980cbbe2-0f5d-4330-872d-c7a9d6a97bf6 - Are we destined for a zero-sum future?

I think this requires a more nuanced discussion. I think your analysts are more duds but the reason could be a general symptom of the times. 

Someone mentioned social media... I do think there is some causation here. Other people's "perfect" lives on Instagram may corrupt your work ethic. 

On the other hand, society is moving forward and there are new jobs and careers opening up that never existed. And hell, a lot of these jobs are actually more entertaining/fun than the "corporate life". I think the best examples are content creators (onlyfans, youtube, twitter, instagram, gamers, etc). 

We are getting a lot more "time" back to spend in other places as technology advances. People have more free time to chill and consume content and do whatever they want. While increasingly, a smaller and smaller group of people control more money, power, and assets. 

Sounds a bit dystopian...

Edit: I forgot to make a point that I was getting to. 

I think the younger generation kind of knows how screwed they are, without really knowing it in great detail. Kids know they won't be able to buy a home like their parents did (if you disagreed with this concern then you are indeed detached from reality). (When i say "dont know in great detail"  - mean No one younger is talking about the massive debt burden, regulatory capture, broken political environment, etc etc that may*really* come home to roost when we are left holding the bag from the previous generation.

From the article

Where this gets especially interesting is that the causal arrow appears to operate in both directions. Among the most striking Harvard findings was the discovery that there is a strong relationship between the extent to which someone is a zero-sum thinker, and the economic environment they grow up in. If someone’s formative years were spent against a backdrop of abundance, growth and upward mobility, they tend to have a more positive-sum mindset, believing it is possible to grow the pie rather than just redistribute portions of it. People who grew up in tougher economic conditions tend to be more zero-sum and sceptical of the idea that hard work brings success. These attitudes are perfectly rational.

I don't know about you but it sounds like this text really captures the different dynamic between OP's career experience/expectations and his dud analysts' experience/expectations.

OP worked his tail off altruistically, knowing hard work would be rewarded and pay off. OP "did his time".  (selfless, abundance mindset)

The "duds" are like "I ain't giving up my life to you unless you PAY me and REWARD me *today*" (selfish, zero-sum mindset)

We are 100% are in the middle of a generational transition (from WFH, demographic changes)... it's pretty interesting to think about how these dots all connect

Funny I have the opposite problem. 27M, so barely gen z I guess, I’m very hungry to learn and feel I’m not getting enough at my firm in the way of what you describe (learning opportunities, more responsibility) but I am telling myself once the market rebounds maybe there will be more opportunity. I’m in the office every day while most others WFH and I average 45-50 hrs a week. At a smaller GP firm though, and I work in AM not acquisitions, in 2nd tier market. Looking forward to the market picking back up and hopefully then there will be more work open on the acq side. Maybe suggest your analysts seeking WLB to move to AM over acq. 
 

I’ll also add that when I first graduated 5 years ago I didn’t have the perspective I do now and may be more allured into your lazy analysts mindset, admittedly influenced by all the absolute crap on social media showing people making X figures a month doing f* all (tech, Ecom, wholesaling, whatever, later realizing 99% of those guys are just weasels scamming for $ and attention) but when you are fresh out of college with minimal business experience and highly suggestible it’s easy to be influenced and think maybe I deserve more too. but after many years of working and seeing how those around me are turning out, or seeing that even the world may be getting worse (wage stagnation vs inflation increasingly moving back financial goalposts, etc.) realizing you gotta make things happen for yourself anyway in spite of a deck being slowly but steadily stacked against you, if I didn’t get my sh* together now and work harder, it will probably only get worse. So you either rise to the occasion or lay flat. It took me a minute to figure it out but I got there. 

lastly, keep in mind too the frontal lobe doesn’t fully develop until 25. A simple thesis to your 22-25 yo problem is that they won’t start to fully understand those intangible benefits you speak of that are only attained through extra effort until they are a bit older. It sounds so simple but something clicked in my head around 25 where I really started gaining deeper insights into my actions and their consequences. 
 

That or maybe they have rich parents they are relying on to carry them through their career! Lol. Hope my rant was helpful, figured I shed some light from an older gen z’s perspective. 

I'm 18 years old, and I've been interning at a privately funded lending firm since I started high school. My passion has always been in the realm of business, whether it's finance, real estate, or any related field. (Along with many other interests like law, diplomacy, etc.) This passion drove me to reach out to the firm's principal, requesting an opportunity to work and learn. Initially, it was an incredible experience, but over time, my role evolved into primarily handling tasks like filing documents and other clerical duties. I don't mind starting at the bottom and proving my worth; however, my dissatisfaction stems from the fact that I'm not learning as much as I did initially.

Perhaps I am somewhat naive in thinking I could perform the tasks of an associate if given the chance. I find it challenging to envision waiting until I graduate from college to gain more substantial responsibilities and truly demonstrate my value. (i.e. get a degree, then finally get a chance to become a "real" slave and prove value.) I feel trapped in my current situation. Those around me believe I should concentrate all my efforts on school rather than work, but school feels remarkably easy, and my work is without work, leaving me with a sense of emptiness and a lack of purpose.

I've thought about a few potential solutions to my predicament, but I am only half-serious in considering them. One option is to seek a mentorship with a successful billionaire in the business world. Or, start my own company. Otherwise, I fear I may lose my mind remaining in this frustrating situation.

The people you mention are obviously without passion or live in a fantasy because there are many people like myself who would love to have an opportunity the same as the one you have provided to them.

Not reading all that but realize that there aren’t that many hyper ambitious and passionate people out there, especially in the younger ranks. 

It's important not to generalize and assume that all younger employees have an entitled or stagnant mindset. Instead of giving up on mentoring, try adapting your approach to resonate better with the younger generation. Foster a positive work culture, provide clear career development paths, and offer regular feedback. Remember, it's a two-way street, and both mentor and mentee need to actively participate and communicate.

As a soon to be 39 year old I have to speak for young generation. Until employers give you true incentive to work hard pay no attention to this thread. The world is moving too fast to deal with old school mentality. There is no pension, healthcare benefits for life, and consistent bonuses. So like you were taught in your finance classes , time value of money, the math ain’t mathin in this environment go to where the money is and except nothing less. Half the of the people complaining will give the money back they made in stress and poor health for what they thought was the “American Dream”. If and when it makes sense to comeback for bonuses then comeback. Otherwise all these folks that have an old school mind set will work to death with no “true” upside. 

I'm guessing most of the people backing Gen Z'ers here are Gen Z'ers themselves trying to bathe in their delusion, but I have had nothing but bad experiences hiring that generation. Although a small company we have hired top notch people from top 20 schools and maybe 1/10 have been eager to learn and put in the work. More people have asked for a raise within 6 months than have not. I just had a summer intern who, I kid you not, asked us to double his intern salary within 1 month of starting. The entitlement in that generation is just unprecedented.

Fundamentally it’s a comp issue, while yes our bases (and not necessarily our total comp) have increased,  they have not kept up with rent / food / going out / rest of life. 50% of our generation lives still lives with their parents whereas that used to be unthinkable in the past… While there is no arguing that IB pays well, the quality of life it gets you is not what it did in the past (and it doesn’t look like this issue is going away anytime soon) which all begs the question, what’s the point?

Again I have to defend the younger generation. As a soon to be 39 year old, I ask are you hiring minorities or are focused on vanilla top 20 undergrad white males? If you’re focused on the latter that’s on you. There is plenty of talent just need to focus on someone that doesn’t look like you and talk about baseball and bull$hit like that.
 

My second point I have to bring up is the entitlement the last poster has. You’ve been part of the greatest Fed induced bull run in history. I’m sure the bonuses you had only helped fuel the late nights. With money basically being free and transaction volume being endless I’m sure they’re some mistakes you got away with in your analyst days. The point of being in real estate was never about the paycheck. It’s always been about the bonuses, carry, profit sharing, etc. If that’s not there what’s the point? So please don’t think  your $hit don’t stank when your roses really smell like boo boo. Sorry not sorry that some folks realize juice isn’t worth the squeeze. In country that values individualism and monetary success there is no justification to think otherwise. So stop complaining. Think outside of the box for your hires and TRAIN them. You already know school don’t teach everything and definitely don’t teach it your way. Real estate lacks standardization so there will always be turbulence when bringing on new hires. Back to my cave. Don’t @ me. 

It’s going to sound like I’m on a tangent here but I’m not.  This is yet another symptom of the problem: inflation.  Inflation has been a problem since long before post-Covid.  But the pernicious nature is that it’s an exponentially worsening problem.  It’s at the point white collar workers (young generations specifically) are throwing in the towel.  It’s not that they want more pay to do less work or slack.  It’s that it’s an enormous amount of work for the little each dollar can buy you nowadays.  If you’re more established with assets and never had the student debt kids have now, you don’t understand getting yourself out of a hole that’s only recently people are seeing how fast it’s exponentially deepening.

Man I wish I had someone like you - I struggled so hard / still do with finding a good solid individual to learn from 

Over the next several decades our non-functioning political system is going to become a massive liability. While most see this as a Republican / Democrat problem it’s really a boomer problem. These people absolutely plundered our society, and continue to do so, and they won’t be out of power for another 10-20 years.

Answer:

1) Social Media has destroyed expectations. Everybody wants to become a banker (or in this case, a RE guy/gal) to get money and feel mistreated if they don't get the conditions shown on those silly Covid FAANG tik toks.

2) Recruiting is so competitive that it takes a lot of the effort early on. Serious folk / hards will start recruiting as soon as possible and will at least start networking or polishing their CV. If they continue throughout college, that's +4 years of 'hard' professional grind, hence increasing the amount of time in the 'grind' when considering junior years in company.

This is an interesting convo.

• Real Estate is by nature, nepotistic, but the main advantage is an early focus:

My analyst bullpen at a big brand, 15 years ago was 50% from real estate families.  As far as real estate as a career path, early on, I think parental influence is huge.  I wasn’t one of them, but grew up in Hawaii and saw the dominate industry there for generational wealth and wanted to get in at an institutional level. 
 

I think the main advantage for children of this background is they have some kind of guiding North Star career wise.  Whereas, people might jump around fields because they are unsure what they want to do, these kids know what their destiny is at a younger age and build towards it their whole life.

I’m only 50 pages into the book about Elon Musk, but that guy was talking about solar, electric cars, space travel when he was a boy.  Having focus on things that go up (growing industries/values) in the long term, pays off. 

So, don’t be critical of kids with RE families, emulate them by having focus.  They’ll have a leg up, but you’ll understand how the game is played.

• Hard to ask for outsized comp from your boss who did the exact same job at way less pay not that long ago:

I think this is inherent and a symptom of our industry that underwent innovation in the 1990’s-2000’s (rise of REITs, funds, new sectors) and for the past 13 years had been piggybacking on an historic bull market. This is usually my response to staff who ask for raises every 6 months.