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’Tis the Season... For Temps

By: John Salustri

You can add labor shortages to the apparently growing list of challenges facing brokers and their clients. Yes, we have the massive hurdle of adapting to advancing tech. And yes, we are all trying to close deals that refuse to pencil in a record-breaking (and deal-breaking) inflationary environment. And to top it all off, now we have to go fish for talent in a labor pool that has virtually dried up.

As a national headline, the dearth of hiring came to light in the depths of the pandemic-induced recession and the so-called Great Resignation. Today, even though COVID-19 is shrinking in our rearview mirrors, the impact lingers. In fact, according to Statista, this July’s seasonally adjusted quit rate was roughly 2.6%, “indicating no change from the previous month. Quit rates in 2013 were much lower than in 2023, with the rate in April 2013 being 1.7%.”

Of course, as dire as the hiring picture is, it can get a lot dicier for certain occupiers when the holidays come around. The challenge is especially acute in the industrial sector, and even more so since e-commerce virtually exploded during the depths of the pandemic-induced recession.

John Joyce, SIOR managing director of SVN Chicago Industrial, explains that his clients “will typically ramp up during the holiday season and bring in temps, like sanitation and line workers for food manufacturers, or pick-and-pack people and forklift operators for e-commerce clients.” But in fact, seasonal need is just one of the pressure-points of hiring. There is also the call for action when a corporate user has special, short-term projects. More on that shortly.

While the headlines point to covid-19 as the starting point of the worker decline, there is evidence that it was actually the continuation of a larger, longer trend. “From 2009 to 2019, the average monthly quit rate increased by 0.10 percentage points each year,” say Joseph Fuller and William Kerr, writing for the Harvard Business Review. In 2020, the trend slowed as folks held onto their jobs amidst pandemic fears.

“That pause was short-lived,” they say, and “We’re now back in line with the pre-pandemic trend, which is one that American employers are likely to be contending with for years to come.” Whether the challenges are worse seasonally or year-long, for industrial or office, are questions tough to gauge. Warehousing and distribution were cut short when the pandemic hit due to the explosion of consumer needs and demand.

“There was this rush no one expected,” says Joyce. In the Chicagoland area, he reports, “Amazon alone made up an approximated 23% of the market in terms of gross leasing absorption in 2020. That comes with tremendous demand for temporary employment.”

In the office sector, lower occupancy levels do not translate into lower employee counts, but rather just a greater number of those workers plying their trade remotely. “One of the big questions that an occupier looking for space will ask is, ‘where is my labor coming from,’” says Casey Flannery (Member Associate), a senior associate at Foundry Commercial in Nashville, Tenn.


As a commercial realtor, I try to wear as many hats as possible and offer as many different services as I can…When you hire my company, you're hiring my network as well.

That speaks to both the local labor pool and the specifics of what the corporate client is looking for Grant Pruitt, SIOR, tells of one young, entrepreneurial office client that was looking for like-minded (read youthful) talent. The more specific the request, the harder it is to source likely locations and the talent therein. In addition, “By the time we orchestrated a move, the available data would be old,” says the Dallas-based president and managing director of Whitebox Real Estate LLC.


To be clear, the expectation of clients is not to turn their brokers into talent scouts. And indeed, the full-service brokers we spoke with will not get so granular as to collect resumes. But they will pull out the stops to ensure client satisfaction in all areas of their business. “We do our best to assist clients in choosing a location with a good, strong labor force,” says Flannery.

Pruitt agrees. “Our goal is always to be a resource for our clients,” he says, “and labor statistics for a local market are just as important as project management and construction management.”

“As a commercial realtor, I try to wear as many hats as possible and offer as many different services as I can,” Joyce adds. To that extent, he sees his role as a sort of clearinghouse, connecting clients to the services they need, “including attorneys, accountants, lenders, asphalt repair, roofing, village planners, and HVAC providers.” He will make the necessary connections to providers of forklifts and racking systems, and he will even go so far as to work with temp agencies to fill needed client openings.

“I can tell the temp agency I work with that I need 200 people for the food industry, and I need them in a week, and they can fill that order.” Otherwise, he explains, he simply makes introductions between the client and the particular vendor. “It’s up to them to make the relationship work.” That is an expansive list of contacts focused on talent and hiring. But as Joyce sees it, “When you hire my company, you're hiring my network as well.”

A broad array of brokerage services — beyond what is traditional — comes in handy in the office sector as well. As the market continues to struggle through its hybrid-work issues, many corporate office users are relying more heavily on coworking space to fill a temporary need. In fact, the compound annual growth rate (CAGR) for the sector was 19.7% last year and is projected to grow 17.8% through 2026.

But will brokers want to spend time on relatively small, short-term arrangements when there are so many bigger fish to fry? “Absolutely,” says Pruitt, who refers to the option as another “arrow in my quiver.

“I had a client that for years would target buildings with some sort of executive suite,” he continues. The firm was very project-based and would need workers for only short stints — six or nine months at a time. They wanted the availability of offices to promote collaboration and camaraderie during the span of the project. “But they just didn’t want to pay long-term for space that would lie empty between projects.” The folks of Whitebox would do needs and workplace assessments of office buildings that offered shared-spaced options and “we’d go and figure out what the right blend would be.”


While brokers will not do the hiring, it is up to them to provide the market intelligence that will make a rich pool of job applicants available for a specific relocation or expansion. As Joyce explains, that includes such data as median income level, hourly wages, and educational levels. In other words, a complete “statistical analysis on the viability of the local labor pool.

“We learned that, in certain locales, people will drive up to 45 or 50 minutes to get to a job that will pay $15 to $17 an hour. In areas like southeast Wisconsin, there’s a tremendous amount of employment and new housing available, so people are moving there and finding well-paying jobs.” That is one of the reasons, he adds, that next to Southern California, Kenosha and Racine counties are among “the hottest industrial markets in the U.S.”

But, given the above-mentioned rapid-fire disintegration of labor data, Pruitt says his focus is less on current data than where the trends are headed. “Over the past five years,” he says, “there’s been such a war for talent that we’ve been more concerned with where the talent pool will come from in the future rather than where it is today.”

For this, the firm utilizes various demographic models, as well as the traditional measures such as drive-time analyses and weighted salary scores. At the end of the day, he says, all of this amounts to giving the client the tools they need “to make informed decisions,” says Pruitt.

No matter the task at hand, that, after all, is what customer service is all about.




Media Contact
Alexis Fermanis SIOR Director of Communications
John Salustri
John Salustri
Salustri Content Solutions

John Salustri is a freelance writer and editor-in-chief of Salustri Content Solutions. Contact him at jsal.scs@gmail.com.