At the beginning of 2022, a new wave of real estate will rise, and a number of real estate enterprises, including rongchuang, Jianye, Wanda and Shimao, will start a new round of organizational structure adjustment.
Organizational change has become the new normal of the industry. After all, after calling out the “Silver Age”, Yu Liang directly skipped the “bronze” and defined the current industry stage as the “black iron age”. Hu Baosen admitted that the “black iron era” is not for the flat real estate enterprises.
In the business environment of internal and external difficulties, real estate enterprises not only need to reduce costs and increase efficiency, tighten their belts and tide over the difficulties, but also usher in an opportunity to rethink the problems of employment and enterprise structure.
On the other hand, with the optimization of the organizational structure of real estate enterprises, it is often a large-scale personnel adjustment. A top20 real estate enterprise employee said that last year, the company suddenly issued a document announcing the merger of the two business divisions, and it is expected that the proportion of layoffs will reach 50%. Even if they escape the fate of being laid off in the short term, it is difficult for employees of real estate enterprises to feel at ease.
centralized rongchuang split area of Shimao headquarters
Just a few days after the new year, Shimao Group took the lead in making drastic changes in the organizational structure. On January 5, Shimao Group announced the launch of a new round of organizational structure adjustment to integrate the functional departments and regional functional departments of the group headquarters.
Among them, the functions and powers of investment, audit and procurement belong to the group, and the functional departments of regional and regional companies are adjusted from 11 to 7. In addition, Shimao also revoked the original Zhejiang regional company, upgraded the central China regional company, and redistributed the jurisdiction of some projects of the Shanghai Soviet regional company.
One month later, the adjustment idea of “Henan Wang” Jianye group, which had been brewing for half a year, also surfaced. Jianye group will change from the original five level management of “group – Business Group – Region – City company – Project” to three-level management of “group – City company / professional company – project company”. In addition, Jianye holdings, real estate group headquarters, Zhongyuan Jianye group headquarters, new life group headquarters and zhuyou group headquarters are merged into a new group headquarters, with nine business centers.
In fact, in 2022, in addition to Shimao and Jianye, Zhongliang, Wanda, Xiangsheng, Zhongjun and other real estate enterprises have all adjusted their organizational structure. From the perspective of adjustment content, in essence, it mostly points to streamlining the structure and further promoting flat and efficient management.
In his new year’s speech this year, Lin Zhong, chairman of the board of directors of Xuhui holdings, pointed out that Xuhui adheres to the “three centralizations” and does not authorize. The first is the centralized allocation of resources, the second is the centralized management of funds, and the third is the centralized decision-making of investment; Secondly, strengthen management and control of business decisions and major key matters.
In this round of structural adjustment of real estate enterprises, rongchuang is the only unique figure. When most real estate enterprises chose to merge regions, rongchuang chose to further split and establish new regions in February.
Specifically, rongchuang has been transferred from seven regions to nine regions: the newly established northwest region manages Shaanxi, Shanxi, Gansu and Ningxia; The original southwest region is divided into Chengdu Chongqing region and Yunnan Guizhou region, which manage Sichuan and Chongqing, Yunnan and Guizhou respectively.
However, according to Yan Yuejin, research director of the think tank center of E-House Research Institute, although the regional adjustment of rongchuang belongs to the concept of expansion, it is still implementing the strategy of simplification.
“The purpose of this adjustment of rongchuang is not to increase the number of management areas, but to reduce the management span and management level, which is actually helpful to improve the management efficiency. Under the current business pressure, reducing the management cost and optimizing the management mode seem to meet the expectations.” Yan Yuejin said.
Chengdu Chongqing economic circle is the region with the most development potential after the Yangtze River Delta and Dawan district. Southwest was once a heavy warehouse area of rongchuang. In the company’s performance, 28 cities in 5 provinces contributed about 20%. In the first centralized land supply in Chongqing in 2021, rongchuang cooperated with other real estate enterprises to win a total of 8 plots, spending about 9.909 billion yuan, which shows its importance.
Overall, the organizational structure adjustment of real estate enterprises mainly focuses on the headquarters, regional departments and business departments. According to the report of the China Index Research Institute, the enterprise headquarters are flat, professional and platform; Adjust the regional organizational structure with improving efficiency as the core to shorten the management radius; Independent marketing corporatization and new or independent key business departments are the most important performance trends.
why should the big company disease of real estate enterprises be treated?
With the deepening of urbanization and the implementation of policies such as purchase and loan restrictions, the speed of sales collection of real estate enterprises has slowed down, aggravating the tension of the capital chain. According to the statistics of China Index Research Institute, the average growth rate of sales of 10 billion real estate enterprises in 2021 was 4.2%, far lower than the high level of 36.9% in 2017. The industry has entered the channel of speed reduction and stability.
At the same time, the restrictions of the “three red lines” of real estate enterprises’ financing and the bank’s housing loan concentration management system put a “tight hoop curse” on the capital side. The cold wind in the industry is bleak and people are in danger. Real estate enterprises such as Evergrande, huaxiangnian and jiazhaoye have embarked on the road of public debt default. Real estate enterprises such as rongchuang, Shimao and Yajule frequently sell assets to save themselves and find a glimmer of vitality.
Before the proposal of saving food and clothing, Yu Liang said that the real estate industry should change to the era of management dividends. A few days ago, Yu Liang jumped over the “bronze” and directly proposed the arrival of the “black iron era”. Therefore, in the face of the changes of the market environment, many real estate enterprises have made active internal adjustment and seek changes in the organizational structure, so as to reduce costs, increase efficiency and coordinate business.
In the view of a middle-level manager of Guangdong real estate enterprises, a few years ago, due to the guidance of real estate scale expansion, many real estate enterprises fell into the “big company disease”, the company structure continued to expand and the regional business continued to disperse, thus pushing up the personnel cost and communication efficiency. “Some city companies don’t have many projects in their hands, but they may be equipped with a team and set up more than 10 departments. In fact, the input-output ratio is very mismatched.”
In view of the organizational adjustment of Jianye group, chairman Hu Baosen pointed to the crux of the problem. He mentioned, “from the national level, with a total population of 1.4 billion, the government adopts five-level management, and Jianye, a private enterprise, is also five-level management. The phenomenon of overstaffing and low efficiency is becoming more and more serious.”
In fact, the organizational structure adjustment of real estate enterprises has gradually normalized. Not only the adjustment frequency is high, but also the change action is very fast. According to incomplete statistics, since 2021, more than 20 real estate enterprises, including Vanke, country garden, China Resources Land and Longhu, have started the road of organizational change, and many enterprises have adjusted more than once.
Developers’ bosses such as Yu Liang and Hu Baosen have also emphasized the sense of hardship in the past year. Late last year, Lin Zhong, chairman of the board of directors of Xuhui holdings, said that in an unpredictable era, real estate enterprises should respond quickly to external variability, uncertainty, complexity and fuzziness. All business changes are inseparable from organizational changes. I believe that many real estate enterprises will make drastic organizational changes in the future.
In mid February, Yu Liang directly defined the current stage of real estate development with the “black iron era”. In the concluding speech of Vanke annual meeting, Yu Liang also mentioned the need for adaptation and adjustment in the organizational structure, such as the construction of investment extension, product and other teams in a game of chess. In the face of fierce competition, we should concentrate resources and energy, and carry out process reengineering at the same time. The way of subcontracting at all levels is no longer feasible.
employees are uneasy to organize “downsizing” and downsizing and job transfer
It is worth noting that the adjustment of the organizational structure of real estate enterprises often leads to large-scale personnel adjustment, starting personnel downsizing, job transfer and diversion.
Taking Hongyang real estate as an example, while reducing the merged area, its structure adjustment also involves the adjustment and change of principals and personnel in seven regions, and the middle-level employees make a small proportion adjustment according to the new regional organizational structure, job transfer, city change or personal wishes.
A top20 real estate enterprise employee recalled to sina finance that one night last year, the company issued a document announcing the major organizational structure, the merger of residential and commercial divisions, and the merger of regions and regions. It is expected that the proportion of layoffs will reach 50%.
“From the perspective of optimization, the first batch is non unified undergraduate, the second batch is over the age of 35, the third batch is non-985 and 211 schools, and the fourth batch is estimated to be Guan Peisheng.” Another real estate enterprise was laid off workers said.
Even if they escape the fate of being laid off in the short term, it is difficult for the internal employees of real estate enterprises to feel at ease after the adjustment of the organizational structure.
Previously, there was market news that after changing from five-level to three-level structure, the number of personnel planned to be optimized by China construction industry group was 651, with an optimization proportion of more than 60%. Although Jianye quickly denied this, Hu Baosen also admitted that more than half of the people may have to return to the front line due to the compression of institutional staffing.
A chief planner of top30 city company admitted that although he had not been laid off after the adjustment of the company’s structure, he also planned to change the track to start a business after the lunar new year.
For laid-off employees, it is not easy to get back to employment in a short time. On the one hand, the job scale of the whole real estate industry has shrunk greatly, and the market is seriously oversupplied. Many years of real estate experience also makes it difficult for many practitioners to change careers.
According to the talent report of real estate industry in the first half of 2021 released by liepin.com, in the first half of this year, the number of job seekers in real estate related industries ranked first in all industries, accounting for 14.73%, but the number of new jobs accounted for only 10%, significantly lower than that in 2020.
On the other hand, employees of high turnover real estate enterprises, once regarded as a pastry, are now frequently discriminated against in the workplace. When applying for a job, professional managers of high turnover real estate enterprises such as Evergrande and Yango Group Co.Ltd(000671) (2.690, 0.06, 2.28%) often have difficulty in passing their resumes. An employee of Evergrande once received feedback from headhunters that “Vanke will not accept employees who have joined Evergrande within 2 years”.
For the adjustment of the organizational structure of real estate enterprises, Yan Yuejin stressed that the key is to do a good job of guidance, “to stabilize the morale of the army, stabilize expectations and stabilize operation.” Yan Yuejin said that if real estate enterprises do not actively guide, it is easy to be considered that there is unrest within the enterprise. On the contrary, it is easy to trigger the market’s speculation about the enterprise’s capital and debt, resulting in many unexpected risks.
