Labour shortages place pressure on firms' real estate strategy

Around two-thirds of occupiers rank employee engagement (68%) and talent attraction & development (65%) as being two of the three most important drivers of corporate real estate (CRE) strategy, even ahead of cost-reduction, according to CBRE's 2019 EMEA occupier survey.

'In an environment where occupiers identify labour and skills shortages as a key strategic challenge, decision-making across a range of issues is increasingly dominated by the need to optimise human capital,' said Richard Holberton, head of CBRE EMEA occupier research.

In last year’s survey, cost-reduction was the single most important driver of CRE strategy and employee engagement was fourth, but this year, cost reduction has dropped to fourth, employee engagement is second and talent attraction & development is third. In this context, optimising human capital is becoming the overriding aim of occupiers’ property decisions, according to CBRE.

Over a third of companies see labour and skills shortages as a key strategic challenge, double last year’s result. In line with last year’s survey, technology disruption (36%) economic uncertainty (43%) and cost escalation (31%) all feature highly as key challenges for occupiers.

The survey identifies four major levers through which companies are seeking to use real estate as a way of influencing and enhancing their appeal to skilled labour. These include procurement and fit-out strategy, flexible space strategy, user experience strategy and technology strategy.

Ian Entwisle, CEO, global workplace solutions APAC/EMEA commented: 'There are clear links between all these different areas of strategy. The challenge for companies is to establish an effective approach to each element as well as identifying the synergies available from combining elements of all four.

'There may be an experimental element to this process since the best solutions are not always obvious, but in general every effort is being made to invest in the best possible environments to make the existing workforce both more efficient and, where possible, more productive.'

Mike Gedye, CBRE strategic advisory, occupier added: 'The survey makes it clear that strategies for skills, space and service are converging and should be viewed holistically. This implies the need for much closer collaboration between CRE teams and other business support functions, but does not suggest a one size fits all approach. On the contrary, it is likely to call for highly flexible and adaptable approaches underpinned by a coherent and dynamic data strategy.'


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