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By Anna Friedrich from issue IZ 8/2023

Is secondment a solution to overcome times of crisis?

Seconding personnel to another company for a limited period of time is common practice in some industries. Companies in the real estate industry can also benefit from this principle, known as "secondment". On the one hand, it temporarily relieves the company's payroll, and on the other, employees can acquire new knowledge.

Those who need a change of scenery don't have to quit their job right away: Employees can, for example, move abroad for a time or acquire new skills at another organization. This practice, known as secondment, has already been tried and tested by large law firms: they send their lawyers to important clients when they need staff, or they transfer their associates abroad, where they receive further training in an international environment. Secondment has now also arrived in the real estate industry.

For project developers in particular, it is currently a challenge to fully utilize their staff in view of the fluctuating order situation. Instead of cutting jobs and losing valued employees, they could "lend out" some skilled workers and have them come back after a certain period of time. This relieves the burden on their own payroll and still secures a job. When the economic situation has stabilized again, the employee returns at best with additional know-how, a greater wealth of experience and expanded skills. Expert knowledge is comparatively easy to "trade." Transaction and investment managers, for example, could go into an appraisal office. Property managers would be able to start working for a sustainability consultant.

Secondment promotes personnel development

"Secondment is not a temporary getting rid of employees," says Yama Mahasher, managing director of ESG advisory firm Westbridge Advisory and former chief operating officer of JLL. "Rather, it's an important part of the workforce development strategy. Employees want to shape and also learn something new." Since early January, he has loaned two of his employees to digital startup Quantrefy, in which Westbridge has a 50% stake. Quantrefy has developed an ESG platform for the real estate industry that enables real-time calculation of sustainability scores. The two Westbridge employees are expected to learn operations and finance there by the end of the summer.

After eight months, they return to Westbridge. "We loan our employees out for at least six months," Mahasher says. If it were shorter, their field assignment would hardly be worth it, because onboarding alone takes several weeks. If the assignment is to last longer, Mahasher is willing to talk: "But it shouldn't be more than two years." It's important that loaned employees know where they belong. "The longer employees are gone, the harder it is to keep in regular contact. Of course, there's a risk that seconded employees won't come back. But I'm relatively relaxed about that," Mahasher says. "Even if we lose a key employee as a result, we may gain new talent just by offering secondment." That's because Westbridge doesn't just want to lend, it also wants to welcome employees from other companies. "That way, to some extent, we can reduce vacancies in specific job profiles while training asset managers in sustainability," Mahasher says.

The company is growing strongly - from September to December 2022 alone, the team has expanded from 100 to 150 employees. And in the first six weeks of this year, another 20 people have been added. This year, Mahasher is looking to add another 60 to 100 positions. "Senior positions in particular are hard to fill, so secondment is particularly attractive to us here," he says. His next step is to identify partners and customers who might be suitable.

Contractually, secondment is a classic temporary employee assignment. If this is not internal to the company, permission must be obtained from the relevant employment agency before implementation. There are also a number of points that need to be clearly defined in the contract between the companies: Some employers share the personnel costs, others pay the salary in full plus a bonus to the old employer. Mahasher expects the new company to cover additional costs - for example, for travel or housing expenses if the employee moves to a new location. He only sends employees he has known for a long time. And, they have to want it. "Our two seconded employees were surprised at first because they had never heard of secondment," says Mahasher. When he explained the principle to them, they were thrilled: "They were totally keen to get to grips with new areas, build up a new skillset and get to know a digital company." In the meantime, he is already planning the second transfer.

The author: Anna Friedrich is a journalist at Wortwert, a business newsroom.