A new survey of corporate executives underscores a major shift in how companies are making real estate decisions today, with more than half saying that talent now trumps cost as the top strategic consideration.
Of the 229 executives surveyed by CBRE Group, Inc., 50 percent named talent availability as the foremost consideration in real estate decision-making, while only 31 percent named real estate cost as a top factor.
People and workplace experience are dominating the corporate real estate agenda, together with escalating costs, according to CBRE’s Americas Occupier Survey.
Today, these two issues are driving real estate conversations; as a result, workplace strategy is increasingly being viewed as both a critical employee attraction and retention strategy (57 percent), and as a means to control costs.
Further, of survey respondents, 85 percent cite space efficiency and restructuring as a top strategy for reducing occupancy costs.
“With talent retention and cost management both so highly valued, yet clearly in conflict when jointly pursued through traditional means, it is more important than ever to explore new and innovative solutions,” said Julie Whelan, Americas Head of Occupier Research for CBRE.
“What’s clear from this survey is that today’s corporate real estate executives must balance the new workforce desires with a realistic workplace strategy that brings talent and expense management into simultaneous focus.”
Survey respondents indicated that their labor force — which is more generationally and ethnically diverse than ever before — places the highest importance on the desire for a great “work experience,” specifically the functionality of the workplace, freedom of work style and a sense of community.
“Connectivity to the people and places needed to get the job done and freedom of choice in choosing when and how to work are the primary preferences of today’s labor force. Corporate executives are taking notice and prioritizing the workplace experience when making real estate decisions today,” said Karen Ellzey, executive managing director, Global Workplace Solutions, CBRE.
“We hear this conversation every day when working with our clients, but this survey confirms that there has in fact been a paradigm shift when it comes to the way companies view the role of real estate in their business.”
Among the workplace attributes at the top of the priority list, survey respondents cited: Connectivity to partners and suppliers (44 percent); Flexible working (42 percent); Flexible workspace (39 percent); Provision of amenities (34 percent)
Indoor environmental quality (33 percent); Public transportation accessibility (24 percent).
The corporate real estate executives surveyed also identified the critical areas still needed to answer the call of today’s target workforce.
Among them are a commitment from the C-suite to empower and approve the delivery of a modern work environment – and with that, accurate, quality data to justify the strategy, and capital to implement.
“This is not a space where corporate real estate departments can act alone. If the expectations of tomorrow’s labor force are to be met, a combination of HR policy changes, integration of IT advancements and adaptation of modern cultural and managerial practices are required to ensure workplace change is both functionally effective and financially sustainable for the long-term success of the organization,” added Ellzey.