How Real Estate Developers, Investors and Consultancies are Addressing Cost of Living Challenges

Understanding the Cost of Living Adjustment in Real Estate

The cost of living is causing a considerable amount of worry for employees.

Real estate developers, investors, and consultancies are tackling these challenges by offering alternative work locations and other benefits, helping employees cope with the higher costs of essentials.

By doing this, employers should see a surge of increased employee satisfaction and as a result, a more dedicated and productive workforce.

One effective strategy employed by the real estate industry to mitigate financial strain is the implementation of cost of living adjustments (COLA). This approach ensures that employees can maintain their purchasing power despite economic fluctuations.

A cost of living adjustment in the real estate industry is highly beneficial to employees, and there are many ways employers can put it into practice. Employee morale and loyalty are likely to increase as a result of this change, as they’ll feel more valued and respected.

According to our research, ‘cost of living/inflation adjustment’ was the second most common reason for a salary rise.

The data shows that this year sees nearly 1 in 5 people working in the real estate sector indicating that they’ve experienced a pay increase or a cost of living or inflation adjustment. This is up 16% from last year. The global average was an uplift of 6.4%, just over the global inflation rate of 5.8%.

These numbers of real estate pay rises in 2024 indicate that positive changes are being made to benefit employees within the sector. Evidentley, employers are being proactive and facing the economic struggles head-on. Real estate salaries are increasing as a whole, and the data is reassuring and positive.

What was the primary reason for your base salary increase?

Reasons Behind Pay Rises in Real Estate

The data from our survey shows different reasons why employees in real estate have experienced a pay rise. According to real estate salary increase trends, cost of living and inflation adjustments are the second most common reasons, but other factors have also contributed to higher pay.

The primary drivers and top three reasons for the salary increases are; annual pay reviews, cost of living adjustments, and promotions.

The other key reasons behind pay rises across the sector are as follows:

• Moving job / new employer
• Change in work responsibilities / role
• Structural changes
• Counteroffer by employer after resignation tendered
• Achieving a professional qualification
• Change in working location / remote working

Employers are not only increasing salaries to address the cost of living challenges, but these actions also demonstrate the industry’s commitment to maintaining a satisfied and productive workforce.

Annual Pay Reviews

According to the data, the top reason for a salary increase within the sector is because of annual pay reviews. These reviews are typically standard practice in real estate and occur every year to ensure competitive salaries and satisfied employees.

Performance, personal and professional goals, and market data are the main factors that are taken into consideration. 50.1% of respondents selected this as the primary reason for a pay rise, with the global average a 7.3% increase on last year.

Here’s the percentage of employees that voted this as the top reason for their salary increase and how the average pay rise percentage differs between the UK, the US and Germany:

• UK: 52.6% with an average increase of 6.6%
• US: 39.9% with an average increase of 8.7%
• Germany: 39.7% with an average increase of 8.9%

Cost of Living / Inflation Adjustment

In response to an increased cost of living and the impact of inflation, many companies within the real estate industry have increased the salaries of their employees. The data shows that this was the second highest reason for an increase as the economic fluctuations played out.

Globally, 17.1% of employees have experienced this benefit and have seen an average salary increase of 6.4%.

Here’s the percentage of the employees that selected this as the top reason for their salary increase and how the average pay rise percentage differs between the UK, the US and Germany:

• UK: 20.5% with an average increase of 5.9%
• US: 22.0% with an average increase of 6.7%
• Germany: 24.5% with an average increase of 5.4%

Promotion

Promotion was the third most common reason for a pay rise. As employees demonstrate their skills and professional development, they’re rewarded with more responsibilities and higher pay. This offers employees incentives and recognises their achievements.

According to the data, 10.8% of respondents said that this was the main reason for a pay rise and, on average, it increased by 17.6% globally.

Here’s the percentage of the employees that selected a promotion as the primary reason for their salary increase and how the average pay rise percentage differs between the UK, the US, and Germany:

• UK: 9.4% with an average increase of 15.8%
• US: 15.5% with an average increase of 19.0%
• Germany: 14.6% with an average increase of 16.9%

What other benefits are you entitled to?

Real Estate Employee Benefits: Easing the Cost of Living

To help combat the rising cost of living, alongside pay rises, employers are also offering added benefits to their employees. The goal of introducing such benefits, is to help further ease financial pressures and improve overall employee well-being.

Here are some examples of the benefits:

Healthcare or Subsidised Healthcare

In the survey, healthcare benefits were selected as the most common benefit that employees in the real estate industry are offered. This involves things like private care, dental cover, life cover, critical illness and more. This is beneficial for employees as it means they don’t need to worry about financing any treatment they may require.

As a result, the additional stress of an unprecedented accident or medical requirements is lifted, and employees aren’t out of pocket. Globally, 52.5% of employees stated that this is offered to them, making it the most common financial benefit received.

Here’s the percentage of the employees in the UK, the US, and Germany who have access to this benefit:

• UK: 58% of employees
• US: 69.8% of employees
• Germany: 32% of the employees

Mobile Phone Allowances

There’s no getting around how much technology is required both in and out of the workplace. And the mounting cost of technology is getting ridiculous, often having a detrimental impact on an employee’s finances, especially as there are often a lot of expensive add-ons.

As a result, employers in the real estate industry often offer employees mobile phone allowances to help fund their devices. This could be paying for data plans or for the devices themselves.

This takes the pressure and stress off people within the sector that require constant communication and need to pay for the upkeep of their mobile phones. The data shows this to be the second most widely available benefit offered by employers, with 46.1% of employees globally having some form of phone allowance.

Here’s the percentage of the employees in the UK, the US, and Germany who have access to the mobile phone allowance benefit:

• UK: 43.9% of employees
• US: 56.3% of employees
• Germany: 49% of employees

Car Allowances

Due to the increase in transportation costs, many employers offer their employees in the real estate sector car allowances. This helps ease the financial pressures of commuting and assists employees with expenses such as car maintenance and fuel.

Data from the survey indicates that 27.4% of employees globally have access to this benefit and the opportunity to ease financial pressures surrounding cars.

Here’s the percentage of the employees in the UK, the US, and Germany who have access to the car allowances benefit:

• UK: 37.5% of employees
• US: 19.4% of employees
• Germany: 28% of employees

Cycle to Work Scheme

Cycle to work schemes involve employers paying for their employees to have a bike in which they ride to work. The money for the new bike is then paid for in tax-free monthly instalments, and the employees can cycle to work every day and save money on commuting costs.

Plus, it’s an environmentally friendly and sustainable mode of transport and has the added benefit of promoting a healthier and more energised workforce.

22.4% of employees globally have access to this benefit. Here’s the percentage of the employees in the UK, the US, and Germany who have access to a cycle to work scheme:

• UK: 47.1% of employees
• US: 0.7% of employees
• Germany: 11% of employees

This is evidently a more prominent benefit in the UK, however, it might be a scheme that the US and Germany push for in the future.

Gym Membership

In keeping with the promotion of a healthier workforce, a gym membership is another benefit offered by employers within the real estate industry. By real estate employers offering an onsite gym or an allowance towards a gym membership, they’re promoting wellness and exercise, both of which are excellent for employee satisfaction and productivity.

Globally 12.7% of employees are offered this benefit. Here’s the percentage of the employees in the UK, the US, and Germany who are offered gym memberships:

• UK: 14.6% of employees
• US: 18.7% of employees
• Germany: 18% of employees

This specific benefit stops employees from having to pay to upkeep a membership and encourages them to remain fit and healthy.

By offering these benefits, the real estate industry is taking large strides to not only assist with higher cost of living challenges, but they’re contributing to a happier and healthier workforce. This is both by easing financial pressures and promoting wellness. This, in turn, will help employee satisfaction soar and benefit the entire industry as a result.

Real Estate Work From Home Benefits and Flexible Work Policies

Due to the Covid-19 pandemic, many industries have opted for alternative working locations. Working from home became a requirement for most workplaces worldwide in 2020 and, since then, a lot of companies have kept more flexible and remote work policies in place.

Remote work policies in real estate also help companies adjust to technological advancements and aid the improvement of a better work-life balance for employees.

As a result, companies in the real estate sector have varying requirements in place to offer employees the chance to benefit from working from home and more flexible policies.

A large reason for flexible work policies is real estate companies looking after employee well-being. A lot of workers experience better work-life balance, which can result in higher employee retention in the real estate industry and higher productivity and motivation at work.

Our Salary, Rewards & Attitudes Report 2024 explores the different options of working locations offered to employees in the real estate industry.

The options are:

• Complete autonomy over where and when the employees want to work
• 1-2 days per week in the office or on-site
• 3-4 days per week in the office or on-site
• 5 days per week in the office or on-site

Flexible Work Policies

By working from home, employees save money on transportation and commuting costs. From fuel to parking charges, they don’t need to dip into their monthly budget as much, which is a huge financial benefit. Another factor is the lack of need for more formal work attire, which can quickly become expensive.

Furthermore, employees can save money on meals as there’s less of a requirement for purchasing lunch at work.
31.7% of people globally indicated that they have complete autonomy over where and when they want to work. Truly flexible working.

Here is the data broken down into sections based on region for employees who have complete autonomy:

• UK: 33.6% have complete autonomy
• US: 30.8% have complete autonomy
• Germany: 29.0% have complete autonomy

Flexible working arrangements come with plenty of benefits such as; a better work-life balance, higher levels of productivity, and of course the money saving element too.

Mandated Working Locations

While some companies offer their employees complete control over their working location, others have policies in place. Ranging from 1-2 days a week to 5 days in the office, these options still leave room for flexibility, offering employees some freedom to save money on transport costs.

Globally, the most common working requirement according to the survey was being in the office 3-4 days per week with 37.5% of employees experiencing this within the real estate industry.

Here is this option broken down into the different regions:

• UK: 36.8%
• US: 40.1%
• Germany: 41.0%

In other cases, some employees are required to spend 1-2 days in the office and can spend the rest of their time working remotely. The global percentage of this requirement is 22.1%.

Here are the 1-2 days office requirement percentages in different regions:

• UK: 28.0%
• US: 24.9%
• Germany: 15.8%

Alternatively, some companies enforce the policy of 5 days in the office per week. This requirement is directly associated with a higher cost of living. However, with the implementation of the additional benefits above, employers can help ease the financial pressures in other ways.

Our survey revealed that globally, only 8.7% of employees in real estate are required to work in the office or on-site every day, and this significantly low number indicates that this option isn’t common.

When broken down into the different regions, the percentages are as follows:

• UK: 1.7%
• US: 4.2%
• Germany: 14.2%

Overall, the data indicates that the majority of companies require their employees in the office 3-4 days a week. Despite some necessity for office or on-site work, there is still some flexibility for employees who want to save money and work from home.

How Real Estate Developers, Investors and Consultancies are Addressing Cost of Living Challenges

Real estate developers, investors, and consultancies are making significant efforts to ease the financial stress of rising living costs for their employees. Through benefits such as healthcare, car and mobile phone allowances, and flexible work policies, they are successfully reducing financial burdens and improving employee well-being.

These proactive measures not only support individual employees but also foster a more motivated and productive workforce. By continuing to prioritise these strategies, the real estate industry can navigate economic challenges effectively.

For more information on addressing cost of living challenges and how to competitively review your benefits package, contact us today.