Executives in housing
In recent years, the funding of housing associations has changed dramatically. Budgets from the government have been cut by 50%, resulting in significant changes to the industry.
As the smaller housing corporations absorb the shock on no longer being able to rely on their grants from the government, the larger corporations 'swallow' them up, creating an industry dominated with on-going mergers and acquisitions.
Industry overview
The key issues affecting the housing movement in the past 10 years have been the increased pressures on funding and the competition in the marketplace. Underlying this has been the economies of scale.
Due to the government's decision to cut budgets by half, tenants' rent has not only increased substantially, but associations have been forced to look into new funding arrangements. Therefore, when local authorities offload their housing, companies within the boroughs are fighting to bid for them.
Invariably, it's the larger corporations that have the capital to finance the bid, and the expertise to manage the project effectively. Therefore, the smaller companies have no option but to reassess their strategies and look for ways to diversify. More often than not, this means merging, or forming a strategic partnership such as a subsidiary.
It's also becoming more common for companies with differing motives - the humanistic approach from support housing and the mainstream generalist approach - to merge and purchase the offloads for commercial reasons.
How this has affected the industry
According to Peter Jeffery, director of personnel at Genesis Housing Group, "Over the past five years, housing associations have been under more pressure to perform. There are more restrictions on residential social lettings and what you can and cannot do. The dominating factor has been one of climatic change."
It's evident that the industry is going through a period of accelerated rationalisation, and as a result, Pete says, "A lot of companies have been forced to reassess their strategies for the future. They've had to become more proactive and open to new approaches - whether this means forming strategic partnerships or subsidiaries."
Skills shortages
Skills shortages dominate this industry - in many ways, the housing sector needs to up-stage its image to compete with the other challenging markets within the public and commercial arenas.
Peter says, "As it stands, housing's image as an employment sector is not as it should be. More work needs to be done to demonstrate the benefits of working in this challenging marketplace."
This is certainly true - how many people do you hear saying, "I want to work in housing?" It's not viewed as a popular career choice, the image does not evoke intrigue, and the financial benefits are not perceived to be high.
So, what is attractive about the housing market for skilled professionals? And why are many former commercial executives coming into the picture?
Survival: Old vs new
According to Barry Honnah, managing consultant for Hays Public Services, "There has been an increase in executives moving across to the housing sector from commerce - a trend many believe will continue, depending on the economic climate." Barry considers that if we experience a global recession, the housing sector will be attractive for executives, simply because of its operational similarity to the world of commerce.
In fact, it has been remarked that the housing sector is moving away from its traditional, altruistic roots and moving head-on into the fiercely competitive world of commerce. With this in mind, how important is your background?
Historically, you would have needed to have worked for many years in the housing industry and worked your way up to the top. According to Peter, "Nowadays, this inherent stigma - that only those with housing experience could get on - is less of a factor.
"But, that's not to say the cultural differences don't take getting used to!' With the key objectives of this sector being benevolent, executives have to adapt to the charitable ethos. They also discover that they're answerable to individuals who are lay people, in comparison - not strategists."
Commercial vs public
Decision-making processes are a lot slower than in commerce. Barry says, "Housing associations are under enormous pressure to ensure they're producing surplus. For example, if they have a project to build 500 houses, they need to ensure they build the houses within budget. The ethos is not one solely of profit, but of intricate thinking - that requires skill."
Processes are also more committee-led than in the commercial sector. There is a certain industry democracy that forms a thread around the housing corporation, binding them; therefore the decisions tend to have to be unanimous - across the board.
The challenges
So, how feasible is it for senior executives to survive and thrive in a challenging working environment that combines the vestiges of old, bureaucratic systems with a new, thriving commercial awareness?
With all the changes and turbulence in the market, senior managers are faced with a range of fresh challenges. The pace of change and acceleration of the market means companies are looking to hire those who're more attuned to business.
Executives who welcome and embrace change and don't see it as a threat are highly sought-after. Today's candidates for the top appointments are assessed on their ability to perform and deliver forecasted results. Competition is tight - only the best executive with a proven track record for success will survive this testing environment.
To succeed, it's vital to have an awareness of the overall housing market and what tenants expect. You will need to be conversant with budgetary procedures and have a fighting spirit - the desire to achieve tomorrow, what you might not have achieved today.
Sense of acheivement
The rewards of working in this sector speak for themselves - watching your company grow and flourish under your careful management, and providing your tenants with better services.
Peter says, "A commercial-minded executive with a humanitarian nature is the perfect ingredient for success in this industry." So, the only question is, are you ready to make that move?
