How property can attract talent
A modern corporate property team does more than manage buildings and facilities – it provides an environment that makes people feel good and work better; one that attracts talent.
It’s a difficult goal to achieve if the company is burdened with inflexible, costly, conventional workspace on long-term leases, and too many regional offices.
Rent per square foot only accounts for about 35% of total cost of office occupation, according to Actium Consult. With additional hidden costs on top, it makes more sense to adopt a flexible portfolio strategy with multiple options that cost less. According to HBR, companies including IBM, AT&T, and Dun & Bradstreet have saved millions of dollars through savvy real estate management.
Sourcing inspiring workspace is one of many factors that property professionals should be addressing in the rapidly changing world of work, says Savills World Research Director Yolande Barnes, author of the European Cities 2017 report.
Barnes says: “Property used to be about the bottom line and maximising profits – about prime Grade A offices, costs per square foot and location. Now it’s about attracting human capital.
“Generally speaking, those still in old-fashioned spaces are in sectors where there’s little job competition, such as back office functions. Where there’s a scarcity of young, talented people – as in the digital industries – that’s where the workspace starts to matter.”
Places where people want to be
Whichever industry a premises department is in – whether it’s insurance, finance or fast-moving tech – it should now be thinking of property less in terms of square footage and more as places where people want to live, work and be happy.
This change of emphasis may be why Savills has found relocation decisions being made more often by human resources than premises. Property teams now need to work closely with HR, whose biggest concern is attracting highly skilled workers by finding the right workspace in the right neighbourhood in the right city.
When it comes to choosing that place, corporates should consider whether a central business district would draw in the talent. Tech talent, for example, often wants to be in the CBD, where space is running out and rents are high, such as in Stockholm and Dublin. The Savills report notes: ‘As in many more European cities, there is a need to build more mixed-use, city neighbourhoods with good access to the centre.’
PwC research spotlights a response to that need for more mixed-use developments. In a report written with Urban Land Institute, called Trends in Real Estate® Europe 2017, it mentions Hamburg, which is building a €1 billion investment in the new HafenCity (harbour city), Lyon, where mixed-use quarters are part of the Part-Dieu CBD new development plan, and Oslo, which is becoming more vibrant and sustainable as a city through major mixed-use development.
Flexibility and work-life balance
Another trend that property departments need to accommodate, if they aren’t already, is flexible working. Over 50% of workers now work outside the main office for 2.5 days a week or more, according to the Regus Workplace Revolution report.
Compared to previous years, it says, there are more consultants and freelance workers, as well as older employees working beyond pensionable age, who want greater freedom to work flexibly.
Giving staff the ability to work in flexible or activity-based workspaces, even if it’s just for some of the week, doesn’t only attract talent – it can save corporations a lot of money in desk space. Although leases have become shorter and more flexible in most cities in the past 30 years, living and working costs are high in the major cities. Annual costs in London are US$88,800 per employee, according to the Savills Live/Work index, and US$111,900 in New York.
Barnes suggests property managers need to look at other workspaces too, including shared spaces or studios laid out in a way that encourages co-working or co-creation. These are better suited to new flexible work-styles, fit employees’ lifestyle choices and meet the needs of different generations. They offer places to meet interesting groups and to collaborate more easily.
Learning lessons from smaller firms
It’s taken decades for global corporate property teams to learn the lesson that many small, creative companies have known for years – motivational workspace attracts talent.
Communications agency AB, which moved to offices in Bermondsey two years ago, deliberately chose a building with open-plan space in one of the oldest parts of London. The area has a trendy, bohemian feel, lots of eateries to take clients to and places to have a drink after work. It’s also commutable and accessible for staff.
Chris Winning, Head of Client Services for AB, says: “Corporations have made up a lot of ground in terms of flexible working and how offices are organised. Smaller outfits that cannot offer staff the money they’d get in bigger companies have had to think flexibly and more creatively for longer.”
The workplace of the future is agile, with open-plan activity-based spaces, seating options from hot-desks to sofas, and separate areas for collaborative and private work. With all the resources at large corporations’ disposal, those that commit to changing their strategy can inspire in a way that small companies can only dream about.