Employee Attraction, Retention and Productivity Replaces Cost Management as Most Important Driver for Workplace Strategy
Companies are increasingly prioritising employee needs when making business and real estate decisions, according to the latest annual European Occupier Survey by global real estate advisor, CBRE.
The survey, now in its fifth year, polls real estate decision makers at global corporations collectively occupying approximately 200 million sq m worldwide to understand their objectives and associated challenges across a broad range of issues. The respondents represent companies headquartered primarily in Western Europe or North America spanning multiple sectors, of which the largest are: banking and finance, professional services, and technology and telecommunications.
The importance of an effective workplace strategy that prioritises staff needs has risen up the agenda. This is a shift from the start of the economic downturn when cost was the core strategy driver, which created a potential disconnect between companies and their employees. Today, companies acknowledge these factors cannot be managed in isolation as evidenced by a third of respondents (33%) citing labour and skill shortages as a key business challenge, up from 21% last year. In addition, the workforce featured heavily as an explanation for companies’ location decision-making. For example, approximately half of the respondents (46%) cited talent availability as a key factor behind location decisions, while 30% highlighted the cost of labour as a key driver. Both responses were 10% higher than the corresponding figures last year.
As a result, interest in adopting workplace strategies continues to gain momentum. Of those surveyed, two thirds (67%) reported that their workplace strategy was primarily driven by the need to attract and retain talent. This represents a 20% increase from last year (48%) and dislodges cost savings from the top spot (56% in 2013 to 43% today) into third place as the principal aim of such a programme. The second most popular reason to implement a workplace strategy was the desire to increase employee productivity (46%), up from 37% last year.
In addition, amenity rich locations that provide quality space and transport accessibility are increasingly sought by companies with 65% stating these factors are vital for building selection and to attract the younger generation. This demonstrates the increasing importance placed on workforce satisfaction and its impact on decision-making.
Richard Holberton, Senior Director – EMEA Research and Consulting, at CBRE commented:
“Roll back two years and 70% of companies reported that the uncertain economic outlook in Europe was a key factor in their real estate strategy, with cost management being the primary objective. Today, this has somewhat abated with 50% identifying weak economies as a concern.
Instead, attention has turned to the workforce. Location decisions are becoming more dependent on where labour is, or where it can be persuaded to move to, and building selection also increasingly reflects the importance of staff attraction and satisfaction. As a result, property decisions and employee aims are becoming increasingly aligned, with workplace and staff wellness high on the agenda.”
Ian Entwisle, CEO – EMEA Global Corporate Services, at CBRE commented:
“A core feature of our results is the focus on workplace, space and people. Labour is the single largest expense for companies, so the impact of improving productivity through shrewd strategies can be material. Initiated intelligently, employee wellbeing and engagement can be enhanced, which will positively influence a company’s profitability, culture and brand.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
* Abridged from an article by Laura Stevens, EMEA Communications Manager at CBRE based in London with responsibility for, Global Corporate Services, Asset Services, Office Agency & Tenant Representation and Sustainability.