CBRE: Talent Beats Cost in Office-Location Decisions

More than half the corporate executives surveyed favor talent availability over real estate cost as their top strategic consideration when making real estate location decisions, reported CBRE Group, Los Angeles. 

CBRE’s Americas Occupier Survey said half of the 229 executives interviewed called talent availability their foremost consideration while less than one-third named real estate cost as their top consideration in office-location decisions.

“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,” said CBRE Americas Head of Occupier Research Julie Whelan. “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.”

CBRE said executives increasingly view workplace location strategy as both a critical employee attraction and retention strategy and a method to control costs. “Further, of survey respondents, 85 percent cite space efficiency and restructuring as a top strategy for reducing occupancy costs,” the report said. 

The executives surveyed also indicated that their labor forces–now more generationally and ethnically diverse than ever–strongly values quality “work experience,” specifically the workplace’s functionality, 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. Corporate executives are taking notice and prioritizing the workplace experience when making real estate decisions today,” said CBRE Executive Managing Director of Global Workplace Solutions Karen Ellzey. “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.”

Among the top workplace attributes, survey respondents cited:
• Connectivity to partners and suppliers (44 percent)
• Flexible working (42 percent)
• Flexible workspace (39 percent)
• Provision of amenities (34 percent)
• Indoor environmental quality (33 percent)
• Public transportation accessibility (24 percent)

“This is not a space where corporate real estate departments can act alone,” Ellzey said. “If the expectations of tomorrow’s labor force are to be met, a combination of human resource policy changes, integration of information technology advancements and adaptation of modern cultural and managerial practices are required to ensure workplace change is both functionally effective and financially sustainable for the long-term success of the organization.”