Companies Increasingly Taking a “Lead-with-Labor” Approach When It Comes to the Workplace
October 13 2016 - 8:30AM
Business Wire
New CBRE paper reveals that talent shortages
are reshaping the workplace paradigm, with the war for talent
influencing all aspects of real estate decision-making
A new paper from CBRE Group, Inc. reveals a paradigm shift in
how companies are approaching real estate decisions today.
According to the paper, the first in a CBRE Thought Leadership
series on workplace performance, the age-old adage, “location,
location, location,” is being replaced with “talent, talent,
talent” as the primary driver behind real estate
decision-making.
In a recent survey of global occupiers conducted by CBRE, top
corporate real estate executives cited talent availability as a
major criterion when it came to selecting a market for their
workplace. This “lead-with-labor” approach allows companies to
maximize talent recruitment, while also achieving potential cost
savings by locating in secondary markets where real estate costs
are lower, and where talent is clustering.
“If an organization is able to create a business strategy based
on where it needs talent, possibly relocating certain operations to
secondary markets, they can reduce both real estate costs and the
labor costs compared to major markets,” said Kristin Sexton,
managing director, Labor Analytics, CBRE.
While many companies still prefer to locate in gateway cities
for client access, proximity to suppliers and major transit
options, many of these markets are “already tapped in terms of
labor and many of our clients are asking what lies beyond, what is
the next tier of markets in which to find talent,” said Mark W.
Seeley, senior vice president, Labor Analytics, CBRE.
Though smaller, secondary markets often have a limit to the
number of space requirements they can support, they likely
represent the next phase of growth for employment, according to the
CBRE paper. Moreover, given the reduced competition, such markets
allow strong companies to become the clear preferred employer.
At the core of the war for talent are millennials as companies
across all industries strive to create workplace environments that
attract this critical, yet still somewhat perplexing,
next-generation talent.
While conventional wisdom suggests that millennials are obsessed
with living and working in the center of big cities, a recent
global survey of more than 13,000 millennials commissioned by CBRE
showed that three-quarters of employed millennials work in large
towns or cities, split two-to-one in favor of central rather than
suburban locations. The vast majority of the remainder work in
small- or medium-sized towns.
Further, when asked to rate each type of location according to
its appeal as a place to work, the millennials surveyed said they
preferred central city locations—but not overwhelmingly, as
suburban and small- to medium-sized towns ranked a close second
with 55 percent saying they find these markets “fairly” or “very”
appealing. Even a third of millennials would be happy working in a
business park or campus setting, and over a quarter find a rural
location appealing.
“It’s about cost, community and cultural values,” says
Christopher J. Perri, senior managing director of CBRE’s Global
Workplace Solutions business. “As young tech leaders and other
millennials transition into family-oriented phases of their lives,
there’s going to be more of a need to get out of the city and find
alternative locations where they can still have the ‘cool
factor’—but at a manageable cost profile and in a place where they
want to raise their kids.”
“We believe those areas that can replicate the CBD
live-work-play experience are certainly outpacing performance of
other suburban areas and perhaps in some cases maybe even the
larger cities,” said Julie Whelan, head of Americas Occupier
Research for CBRE.
The first paper in CBRE’s Thought Series on Workplace
Performance can be viewed here. To access the compete series, click
here.
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 (based on 2015
revenue). The company has more than 70,000 employees (excluding
affiliates), and serves real estate investors and occupiers through
more than 400 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.
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CBRE Group, Inc.Robert McGrath212 984
8267robert.mcgrath@cbre.com
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