Getting back to "market pay" at large AUM firms...?
I currently work at a large real estate firm with $10B+ AUM. It's a "red tape" type of firm with lots of process, approval layers, etc.
I like the pace, it's a 40 hour/week type of gig and the pay was decent when I started ~8 years ago as an analyst.
Just for reference, I work in a high cost of living market (SF, LA, NYC). I'm currently at the associate / VP level and will likely make ~$150-170K all-in this year. I started 8 years ago at around $100K all-in fresh out of college (which was pretty good back in the day). People have come and gone throughout my tenure and the people around my level seem to be doing pretty well at other firms ($250K to $300K all in). The firm is slow at promoting / raising pay, which is why generally people leave every 2-3 years.
Is there a way to get back on par with my peers, or do I have to look for another job? It seems like my firm is willing to pay more for external hires, but internal promotions are slow and they are reluctant to pay the same as external hires, which I find strange.
So, this issue of paying skewed downward with increasing tenure is not uncommon at all (sadly). Frankly, most people will need to move/jump to get a big increase in pay and even title/rank. So, that may be your reality in all honesty.
That said, if you have been at the firm 8 years, you must have friends all over the firm. What has made people get big raises/promotions in the past? Some places require people to jump markets or take on managerial roles or do some type of special service. Regardless, you should figure out the deal internally then decide if you want to play ball or just shop your resume.
You can bring this up with directly with your manager at the next review cycle, if you are going to try and leave anyway, there is really not much harm. If you can cite some comps from legit competitor firms (even if you get from WSO) can really help your case. Some places take this risk more seriously than others. Some will just laugh and tell you to fuck off, but you should be able to figure this out internally before any such discussions.
My guess is you’ll have to leave to get a substantial raise. But other firms will almost definitely work you longer than 40 hours
Leave, it is really that simple. You should be moving shops every 3 years or so, unless you are in development where there is a big advantage in seeing projects fully through the lifecycle. The reason for this is it is the fastest way to advance your career and pay structure now. Companies for the most part do not value employees like they should.
I disagree with jumping every 3 years. It’s fine when you’re an analyst/associate/senior associate. But if you ever want to move into higher level management positions / senior management / investment committee, it generally takes 5-10 years at a firm to settle in and starting being pulled up the chain. By jumping every three years you keep resetting the clock and make it harder to jump to IC / senior management.
At some level yes, but to get back even with his peers on comp the OP will need to jump every 3 years for at least the next 6 years.
Some truth in this, and can certainly maximize your short term pay, but some risks/major considerations:
- You DO NOT want to tagged as someone likely to leave every three years.... this can be kiss of death in real estate, so how you manage this I'm not sure other than be smart about each jump (i.e. needs to make some sense beyond just pay increases)
- To the above, each jump better get you some better title/role or some other enhancement.... otherwise this strategy will cost you long run (more below)
- The biggest cost you could face is failing to get the big promotions... like the ones that let you run deals, teams, and earn stuff like carry or similar long term comp packages. A lot of firms (not all) will preference longevity (i.e. a proxy for trust) for these type roles. Analyst/associate and even manager/vp type roles are more interchangeable and thus not an issue (easy to lateral at those ranks), but director/vp and above requires more trust (including not to leave), so if you don't build up time/tenure with the firm, you could push back your timeline to getting such a promotion as each move resets your time counter.
- Caveat to last point... if you can jump to get that seniority/higher better role... you SHOULD do it.... a big reason to leave a firm is because you are tapped out on advancement potential (better reason than pure pay motivations)
It's so dumb, I see this time and time again.
Experienced VP is making $150K and is good at the job. Wants a bump to $200K and the firm doesn't want to budge. Experienced VP moves on elsewhere.
Firm backfills with another Experienced VP from another firm and pays $200K. Now this new VP will take 8-12 months to get "up to speed".
Super inefficient as now you have to "retrain" everyone. It's astounding to me that firms don't understand the opportunity cost of paying below market (or even market). If anything, the firm would save money by paying more for the original guy instead of having dead weight for a year trying to learn everything.
At its face value this seems to be true. However, most business realize that they don't even know what they will be doing in 12 months let alone what skills will be required for doing that work. The skills market is changing so rapidly, but people don't realize it in the day to day tasks. The place this is most relevant is in the tech industry, it is common for software engineers who are 3 - 5 years out of school will be working in languages that didn't even exist while they were in school.
It would make sense for companies to train and upskill their employees, but in reality they just don't know what to train their employees in.
This isn't tech. It's almost the anti-tech with a desire to become more in-tune with tech so tech doesn't eat our lunch.
Most real estate firms that are big have been around the block for decades, and with that comes decades of process that every needs to get up to speed with.
All the big name shops in the industry that I have worked with all have their own archaic systems created in the 1990s that they still use that are an absolute mess. As much as I like to say we're all the next Jon Gray's of real estate, I would say most people below MD are not calling big shots and are just process people. The knowledge of and efficiency execution is what gets a VP and below paid. In my opinion, if you're not on the investment committee, you're just a process person.
I 100% agree with you. But I think it’s simple why firms don’t raise pay. For the most part, people think their sh*t don’t stink and no one would ever leave them. Therefore they play this game and take a hit. Alternatively, they may believe (rightly so) that 99% of employees are replaceable, so might as well pay under market while you can, until you can’t anymore. You’ll replace the person when the time comes and that’ll be that. Most bosses understand no person below them is going to stay forever.
Based on the desciription, i think I know the firm. Blink twice if you live in LA...
You have been there a while, and so definitely should talk to your firm about what you think if fair market value, and put in an ask. That's minimum. At the same time, anyone who has not moved job within the past 5 years has money on the table for sure. Its just a matter of how much that delta is IMO, especially in these HCOL areas. Good talent in these markets with the right experience is valuable. I think its simple for you, if you cannot get what you want and if its for sure market, then you should have plenty of options elsewhere to get that market pay. Life is short, you gotta get yours while you can. And leaving after 8 years (if that happens) is for sure more than respectful.
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