(Y)our Space: All change on the corporate front
Business models are seemingly under almost constant revision.
3 minutes to read
Business models are seemingly under almost constant revision. Yet it is not just technology forcing this change. The emergence of expert, and often lower cost, third party providers; the urgent need for skills that sit outside of the traditional orbit of a business; and a renewed focus on core business competencies following the Global Financial Crisis (GFC) have all served to extend and complicate corporate supply chains. Rarely does a modern business today undertake entire processes and functions exclusively from end to end. Instead, they draw upon a range of specialist outsourced providers, small tech and creative start-ups and, increasingly, freelance staff to support the delivery of products and services.
(Source: Knight Frank (Y)OUR SPACE Report, 2018. Sample = 129 Global Corporate Real Estate Leaders).
This has a number of implications for the workplace. It can reduce the quantum of core staff who required dedicated workspace. It can mean that the workplace needs to have greater flexibility in order to house a more transitory workforce. It increases the need for a more flexible, collaborative workspace to affect interaction between those core and temporary staff. It can even influence location decision making, with proximity to suppliers become a more significant consideration.
Often a change of business shape leads to a change in real estate requirements. This dynamic has intensified in recent years owing to the proliferation of outsourced providers and shared service centres; the increase in tech skills required by businesses and the associated rise of what has become known as the ‘gig economy’. The constitution of the corporate workforce is changing. Corporate real estate must follow suit and reflect the future shape of the organisation and its workforce. Legacy real estate, which reflects a structure from the past, can often stymie progress. This re-setting is strongly in evidence across global real estate markets.
A further dynamic, rightfully challenging the corporate constitution, is the need to broaden diversity. Diversity and inclusivity strategies are now prevalent within businesses as they seek to be more representative of the wider world in which they sell products and service, and as evidence increasingly points towards the outperformance of those companies who reflect about average gender, sexuality and generational diversity.
Again, there are clear implications for real estate. The workplace and accompanying HR policies need to be supportive of, for instance, female returners to work, disabled staff or older workers. Once more, in a global labour market that has clear skill shortages, these diversity policies make absolute sense commercially – as they enable the attraction and retention of a broader pool of talent.
Generational diversity will in our view, become a particular hot-topic over the medium term. To date the millennials have tended to dominate the debate, but future best in class businesses will need to provide workplaces that attract and support those with grey hair and grey matter, amongst others. As corporate diversity strategies grow greater teeth, we fully anticipate increased influence on global workplace design.
For more insights into the dynamics shaping occupier decision making and the implications for global real estate markets, take a closer look at (Y)OUR SPACE