by Brianna Crandall — February 6, 2020 — The retirement of Baby Boomers and the debut of Generation Z workers, along with other demographic shifts, have major implications for real estate occupiers, investors and policy-makers around the world, according to a new research report from global real estate services firm Cushman & Wakefield. All stakeholders need to understand the impacts of these trends and how to position themselves to maximize opportunities, says the firm.
Entitled “Demographic Shifts: The World in 2030,” the report analyzes the seismic shifts in workforces worldwide as 693 million Baby Boomers reach retirement age and 1.3 billion members of Gen Z enter the labor force over the next 10 years.
The report looks at the different approaches to work and lifestyle taken by Baby Boomers, Millennials and Gen Z around the world, and the impact on workplace strategy, sectoral growth and the changing order of the world’s cities over the next decade as one generation exits the workforce and another enters.
Dr. Dominic Brown, head of Insight and Analysis, Asia Pacific, at Cushman & Wakefield, stated:
These demographic trends will drive the pace of growth in cities around the world. Cities will need to establish themselves as “places” to attract the highest quality workers and in turn create the greatest real estate opportunities for occupiers and investors alike.
Cushman & Wakefield compared labor force growth and gross domestic product (GDP) growth of more than 137 cities worldwide. Cities with high growth in both categories have the best prospects for strong real estate demand, while slow growth in both categories indicates a lagging market. Cities with faster growth in GDP than in the working-age population are “high productivity” markets that may appeal to investors as they rise up the value proposition. Those with greater growth in labor than GDP are considered “low productivity” markets that need to harness that attraction of talent to boost output. (See table.)
The study concluded that the world’s top-performing cities are located in Southeast Asia and India, which bodes well for the economic growth and strength of real estate markets in these areas. High-productivity cities are located mainly in China. Most cities in Europe and North America ranked as low productivity or lagging markets for economic and real estate growth, and their trajectories need to be assessed accordingly.
Generational similarities seem to be stronger than cultural similarities
Somewhat surprisingly, while individual countries and cities have their own demographic trajectories, the differences are more intergenerational than international, according to the report.
Kevin Thorpe, chief economist and head of Global Research, explained:
We were surprised that generational behaviors superseded cultural ones. Gen Y and Gen Z workers, to some extent, have similar workplace preferences no matter where in the world they live, but the two generations also differ in many ways. For example, workplace strategy will need to account for an ever-increasing array of requirements to meet the needs of tomorrow’s professionals. Understanding these generations’ values, how and where they want to work, and their interpersonal strengths and weaknesses will lay the foundations of securing the best talent available.
Generational traits related to FM
A few of the findings relevant to facilities managers (FMs) are highlighted below.
- Millennials care about big issues such as the environment; 29% rank the environment as their top concern, 27% believe that businesses should try to improve and protect the environment, and 32% say businesses should try to improve society. Millennials are expected to analyze corporate procurement and supply chains closely.
- Millennials want amenities such as walkability, food and bar concepts, gyms and fitness centers, and childcare facilities.
- 50% of Millennials prefer to work remotely at least one day a week, and the other half prefer to work in a workplace full-time.
- The Millennial desire for workplace flexibility is expected to boost the continuing growth of collaboration spaces, quiet zones and lounge areas blurring the live/work line.
- Having grown up with global terrorism risk and ongoing economic turmoil, Generation Z has a sharper focus on security and stability.
- Generation Z respondents are less likely than early Millennials to indicate they would choose work/life balance over a well-paid job, and tend to be driven and more competitive.
- With Gen Z being the first generation to grow up surrounded by the internet, eCommerce, smart phones and social media, workplaces will need to continue to adapt to keep up with their expectations that all of life is both physical and digital.
- The highly motivated, tech-savvy Gen Z workers tend to want control of their own workspaces, so companies will need to provide a multi-faceted work environment that allows for connecting casually, collaborating with colleagues, meeting with teams and focusing on individual work.
“Demographic Shifts: The World in 2030: How Boomers, Millennials and Gen Z Will Impact the Global Workplace by 2030” is available to download from the Cushman & Wakefield website. The firm serves real estate occupiers and owners through property, facilities and project management; leasing; capital markets; valuation and other services, with 48,000 employees in approximately 400 offices and 70 countries.