by Brianna Crandall — April 5, 2017 — While talent continues to reign supreme on the list of top concerns for companies today, a new survey of corporate real estate executives underscores the challenges they are facing in today’s economic environment. Of the 176 Americas corporate occupiers surveyed by global commercial real estate services and investment firm CBRE Group, 52% named economic uncertainty as a top-three concern, up from 36% in 2016.
As a result, 87% of corporate occupiers report that they are managing to this uncertainty by disposing of surplus space and/or implementing more efficient workplace designs to prepare their portfolios for the future. Further, only 26% of respondents expect to expand their portfolios over the next two years, down from 38% in the 2016 survey. Approximately one-half of the 2017 survey’s respondents indicated that the size of their portfolios would remain stable with 2016 levels.
Other key priorities for corporate occupiers in 2017 include:
While uncertainty is driving many real estate decisions, creating a workplace experience focused on talent remains top of mind for the majority of corporate occupiers surveyed. A full 67% of respondents cited employee satisfaction as the key measure of the success of their workplace strategy programs.
This is a higher percentage cited than occupancy cost per square foot (56%), occupancy cost per employee (53%), and target cost reduction (42%). Further, 55% of respondents said talent attraction or retention was among the top three drivers of their organizations’ workplace strategy, and 53% said promoting collaboration was the most important driver. Only 40% cited operating expense savings as among the top three drivers.
Julie Whelan, Americas head of occupier research, CBRE, noted:
Mobile and cloud technology has made it efficient to work from anywhere, so the office is becoming an optional place. Employees must be drawn to the workplace through a positive emotional connection. In turn, employers benefit from a collaborative and cohesive culture because both formal and informal communication are more powerful when face-to-face.
To motivate employees to come to the office, occupiers are turning to a range of amenities and services that support the integration of the workplace into both their personal and professional lives. Fully 64% of respondents said amenities are most important to their labor forces, with food offerings being the most prevalent (81%) and hospitality services on the cutting edge (32%).
Employers are also increasingly placing importance on developing a workplace culture that enhances employees’ health, with 76% of survey respondents reporting running an employee wellness program.
Elevating the corporate real estate function
The management and operation of corporate real estate departments is continuing to centralize and rise in importance within corporations. While there is clear recognition of real estate’s impact on employees, the prevalent organizational structure remains cost-centered, with 66% of respondents reporting to finance, operations or procurement departments.
Matthew Toner, managing director, Global Workplace Solutions, CBRE, pointed out:
Today’s top companies are shifting the traditional view of the physical space from a mandatory cost toward a customizable, revenue-enhancing tool. Business leaders clearly accept that a well-designed and managed office can enhance their employees’ collaboration, engagement, health and productivity. However, empirically demonstrating CRE management decisions drive improved metrics in these areas remains the holy grail.
Regardless, there’s no question CRE tech has entered the mainstream. The new breed of technology provides previously unfathomed abilities to efficiently monitor buildings, optimize space utilization and engage employees.
The Americas Occupier Survey 2017: Building Advantage in Uncertain Territory is available to download from the CBRE Web site upon registration.