Survey: “The workplace as a weapon in the battle for talent”
Almost two-thirds of companies consider employee engagement (68%) and talent attraction and development (65%) to be two of the three most important drivers of their real estate strategy. This has even more priority than cost reduction. This is evident from the EMEA Occupier Survey 2019, the annual international survey of office occupiers conducted by real estate consultant CBRE.
Employee experience becomes key priority
The survey reveals that the employee is the decisive factor for employers in decisions relating to accommodation and real estate, with a view to attracting and retaining talent. The most important driver for companies’ real estate strategy is alignment with corporate goals. Interestingly, cost reduction was cited as the most important driver in 2018 when employee engagement did not even feature in the top three.
Most significant challenges
Increasing numbers of companies are seeing labour and skills shortages as an important strategic challenge. One third cites this as a priority, twice as many as in 2018. Other key challenges for companies include economic uncertainty (43%), technology disruption (36%) and cost escalation (31%). Broken down into sectors, it is interesting to note that real estate managers at technology companies see meeting the preferences of talented employees as the greatest challenge.
Our survey confirms the trend that has been evident for several years – the fact that employees are increasingly becoming a key factor in companies’ choices of accommodation. In this, sustainability, health and technology are becoming increasingly important. For investors, this offers an opportunity for capitalising on this demand in the operation of office accommodation, based on the knowledge that occupiers are willing to pay an extra premium for quality. It is not the location alone, but the entire building concept that determines whether a real estate investment is successful.
Willing to spend more for good workplaces
Companies can use accommodation and real estate to enhance their ability to attract talent. They are also willing to pay extra for it: almost 60% would be willing to pay a 10% higher rental price for a building with a high level of facilities and services. Equally, 46% would be willing to pay this for a fully-tech enabled SMART building.
Opportunities for owners: growth in technology investments
The survey also reveals that 70% of companies plan to invest more in real estate technology, with the focus shifting from building-oriented technology (such as measuring energy performance) to more people-focused solutions (such as navigation apps). It also appears that the need for flexible offices is still growing: the number of companies that say they intend to make significant use of flexible office accommodation in the next three years is 20% higher than is currently the case.
For the survey, 180 companies were approached from a wide range of sectors. The full survey can be downloaded here.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.