Commercial trend: Local ‘talent’ beating out cost
LOS ANGELES – March 8, 2016 – A new survey of corporate executives finds a major shift in how companies are making real estate decisions today, with more than half saying that talent now trumps cost as their top strategic consideration.
Of 229 executives surveyed by CBRE Group, Inc., 50 percent named talent availability as their foremost consideration in real estate decision-making – only 31 percent named 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.
The two issues increasingly drive real estate conversations; as a result, workplace strategy is being viewed as both a critical employee attraction and retention strategy (57 percent) and as a means to control costs.
Survey respondents (85 percent) also 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," says 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 is more diverse in terms of ethnicity and age than ever before, and this group considers a great "work experience" highly important, 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," says Karen Ellzey, executive managing director, Global Workplace Solutions, CBRE.
"Corporate executives are taking notice and prioritizing the workplace experience when making real estate decisions today," Ellzey adds. "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."
Workplace attributes at the top of respondents' priority list