Who's Next? Who Knows

I was recently interviewed for a podcast episode and the host asked for my perspective on leadership within the valuation profession. This triggered something in the deep recesses of my mind because it led me to share concerns about the pipeline of leadership talent in valuation generally.

The valuation profession faces several challenges in attracting young professionals, including a lack of awareness, additional educational and experience requirements, and compensation that may not be competitive with careers that have shorter entry paths. Furthermore, once individuals join the profession, encouraging engagement with a Valuation Professional Organization (VPO) has become increasingly difficult.

In the past, entering the valuation profession almost compelled you into membership with a VPO: They provided the education, mentorship, and credentials necessary to successfully practice in the field. The advent of federally mandated appraiser licensing turned floors into ceilings, disincentivizing those in the real property space from going any further than their state required.

In business valuation, there has been a decrease in support for VPO membership and education, with fewer firms covering the costs of junior associates' membership dues and educational fees. Younger professionals are less likely to join VPOs or seek designations unless it provides clear benefits such as promotions or increased compensation. While a designation was previously necessary to be recognized as a credible BV practitioner, individuals are now achieving success without credentials, particularly in emerging areas like fund valuation.

Personal property spaces are somewhat insulated from this trend, though they also compete with individuals who practice without obtaining comparable education or credentialing, as these are not required to enter the field. While it would be beneficial for anyone intending to appraise to receive proper training at a minimum, there are still individuals who offer “valuation” services at a lower cost to consumers, who may not recognize the difference until later.

Although it is possible to attract new entrants to the profession and connect them to Volunteer Professional Organizations (VPOs), engaging young professionals to commit their time and talent in a volunteer capacity remains challenging due to several factors.

• First, there is significant pressure for young professionals to maximize the profitability of each hour, particularly when working on a fee basis. While volunteerism offers networking and professional growth opportunities, it detracts from billable hours.

• Secondly, even when there are willing volunteers, the environments they enter may not always be welcoming to those who bring new perspectives or seek changes within their profession or organization. Established volunteers often feel protective of their previous work and may be reluctant to relinquish control to younger practitioners.

• Assuming the first two challenges are addressed, it is crucial to provide meaningful and rewarding tasks for young volunteers to justify their time investment in an organization. Infrequent committee meetings that result in few assignments or projects can quickly discourage them from volunteerism, as the goal is to contribute substantively rather than engage in minimal tasks.

The long-term impact of this situation is significant. With a reduced pool of volunteers to draw upon when opportunities arise requiring the expertise of active practitioners, the burden increasingly falls on a limited number of participants, which heightens the risk of burnout. Additionally, this results in a decline in the availability of qualified instructors to teach best practices in valuation, thereby jeopardizing the maintenance of high professional standards.

Most importantly, this indicates that when it is time for organizational boards to transition to the next generation of leaders, there may be a lack of prepared and enthusiastic individuals ready to assume leadership roles. Without the strategic insights of practitioners at the table, VPOs risk missing growth opportunities and overall relevance to both practitioners and users of valuation services.

There are efforts to engage with younger professionals from the VPOs. The Appraisal Institute has several efforts under its Next Generation Appraisers umbrella; ASA offers recognition through its Rising Stars award program; and NACVA has “30 Under 30” and “40 Under 40” recognitions, to name a few. And many VPOs offer free or discounted student memberships to those studying in higher education as a means of engaging with them prior to entering the workforce.

Perhaps the most meaningful engagement of younger professionals is the work done by ASFMRA with their Young Professionals Network, or YPN. Not only do they offer structured opportunities for younger members to engage throughout the year, but they also have two dedicated seats on their Executive Council for YPN-eligible members.

While any effort to attract and engage young professionals with the valuation community is laudable, there is a looming need for these individuals through the valuation profession generally and in volunteer leadership roles specifically. Most VPOs have a considerable number of members at or close to retirement age (which, admittedly, is a nebulous concept when part-time practice is an option).

As dedicated long-time volunteers decide to reduce or end volunteering on behalf of their VPOs, my fear is a lack of new talent will leave a void in organizational leadership and in the profession overall. While I am not going as far to make this a clarion call to emphasize bringing younger professionals into the volunteer ranks, we are not far off from this becoming a critical need.

For established practitioners, there should be two compelling ethos involved here: A strong desire to leave the profession better than you found it, and to give those who will follow in your footsteps the same volunteer opportunities you’ve been afforded. Find those younger professionals you see as future leaders and encourage them to get more involved supporting the profession that provides their livelihood – before those opportunities dwindle and the profession finds itself wanting for talent.