Author: Alex Nicoll
- Like the rest of the corporate world, real estate has a diversity problem.
- Proptech Building Engines is taking a concrete first step by tracking the diversity of the vendors used by its customers, landlords and building managers.
- The company hopes adding data on minority- and women-owned businesses to its software will promote diverse hiring.
- See more stories on Insider’s business page.
Last year, George Floyd’s death at the hands of a Minneapolis police officer Derek Chauvin sparked months of anti-racist protests across the country. It also led business executives to make ambitious pledges to change their organizations and hire DEI leaders to address racial inequity or unconscious bias. While some corporations have made concrete changes, many Black professionals believe this is “more talk than action.”
Commercial real estate is one of many industries where leaders have acknowledged their faults and vowed to create more equitable workforces. But what does that look like in action? Sometimes, the first step is as simple as just collecting data about diversity in hiring.
Building Engines — a more-than 20-year old building operations software company that landlords and property managers use to operate 2.5 billion square feet of space — announced a new diversity initiative on Thursday.
The company will allow customers who use its software to run their buildings to systematically keep track of how often they ask minority and women-owned businesses to bid for jobs on their property — and how often they’re hired.
Chief product officer Daniel Russo said that while the new feature may seem simple, gathering this data is an important part of beginning to address inequities in hiring.
“We first need to understand the baseline before we can go and try and make a difference in that space,” Russo told Insider.
Users of Building Engines software includes leading New York office landlord SL Green and real estate services giant Cushman & Wakefield.
A start to fixing real estate’s diversity problem
Commercial real estate properties require a wide range of services to remain operational, from day-to-day maintenance involving plumbers, electricians, and other technicians to larger projects like replacing a building’s HVAC system or roof. Property managers and building operators frequently tap outside vendors to do this specialized work, often comparing quotes from different providers through a bidding process.
In 2019, Building Engines purchased Synlio, which made automated vendor management and bidding software, in order to add those tools to its platform. The move gave customers a central location to track their jobs and bids to external vendors, as well as find cost savings or new partners to hire.
At the same time, the company began to hear more requests from customers asking for a systematic way to see and track the diversity of their vendors. As Building Engine clients felt pressure to address racial equity in their business operations, some found that they didn’t have an easy way to answer questions about the ownership of the businesses they vetted and enlisted for projects big and small.
“The problem that our customers were having was that they couldn’t answer the question: ‘How much are you spending with women-owned and minority-owned businesses?'” Russo told Insider.
One customer began to collect that data manually, looking up the background and status of each business it hired, while others tried to tabulate the same information by hand using their accounting services.
So Building Engines decided to make the diversity of a vendor an official part of its software, adding a tick box for every vendor to show it is a minority- or woman-owned business. Customers can add this information themselves when they upload a new vendor, while Building Engines can update its intel on already-onboarded vendors.
Russo hopes to be able to actually influence building managers who choose which vendor to hire during the bidding process.
“The accounting system doesn’t help you at the point of decision,” Russo told Insider. “It is really important time to have that information when you ask someone to quote for business — not at the end of the process.”
Along with women- and minority-owned firms, Building Engines will also track historically underutilized (HUB) businesses, which are small firms headquartered in “historically underutilized business zones” including Native American lands and other parts of the US.
Russo is also planning to actively reach out to underserved businesses capable of servicing large commercial buildings in order to add them to its list of potential vendors. That way, those firms can easily bid on jobs.
“I’m guessing right now that we probably have a very low percentage of them in our system,” Russo said.
Tracking diverse companies and how often its customers hire them will allow Building Engines to get the first-ever birds-eye view of equity in commercial real estate vendor hiring.
In the long run, Russo hopes that this data can be used not just to show individual businesses their own progress in diversifying their vendors, but to also create benchmarks for the industry as a whole.
“They only have their own data, don’t know if that’s good or bad,” Russo said. “At scale, this type of platform could say, ‘All of your peers are doing this well, and you’re doing better than them.'”
Original article from: Business Insider