New framework emerging for business location decision-making, says CBRE
The disruption caused by the Covid-19 pandemic has shifted the expectations of both companies and employees on optimal future ways of working. This is having a knock on effect on locational decision-making by businesses, according to the latest insights from global real estate advisor CBRE.
Locational decisions now need to be integrally linked to both a company’s employer value proposition as well as its skills and functions profiles. With this in mind CBRE has identified seven recommendations for approaching location decisions in this new environment.
1. Recognising differences in the workforce, including variable responses to the pandemic and future expectations, is the first step in developing a location strategy.
Richard Holberton, Head of EMEA Occupier research, CBRE comments: “Corporate location strategies involve complex decisions, trading off quantitative and subjective factors - no single location ever scores highest across all selection criteria. The final choice nearly always involves a complex set of trade-offs, but above all should be consistent with broader business objectives.”
2. Focus on business units and functions, not sectors
Richard Holberton continues: “Businesses need to consider the functions people work in, how they are split between different office settings and how they interact with one another, clients, and other external stakeholders.”
3. Recognise how brand and culture may have shifted during the pandemic for both existing and potential employees.
Richard Holberton comments: “Whilst existing employees may have expected certain responses from their leaders it is important to consider the implications of such statements on the ability to attract talent.”
4. Consider revised commuting patterns in location and consolidation decisions
Stephen Fleetwood, Head of Location Advisory EMEA, CBRE comments: “Less frequent visits to the office means that some employees are already choosing to live further away. This is the result of changes in house price data and other residential location metrics. Not all employees will think the same. This phenomenon is potentially more important to experienced sector-focused or skills-focused workers who have reached a stage in their lives where more space and more time at home is important.”
5. Retain scope for physical proximity when hiring virtually
Stephen Fleetwood continues: “One of the key advantages of virtual hiring is that it brings into play workers who previously would not have been accessible, in locations where locating a new office was considered unviable, too remote or where talent attraction was perceived as challenging. Some companies are still choosing to hire virtually in specific selected geographic areas. As such, this enables them to have the ability to bring the workforce together.”
6. Devise new measures of productivity to understand which work environment is best
Stephen Fleetwood comments: “Companies need to begin to calculate productivity in offices. Established real estate data is largely focused on cost, or workplace measures on employee satisfaction or attrition. Neither fits the bill. Companies will need to break down processes across business functions and assign new measures that establish how productive people are, especially when comparing office-based work with homeworking.”
7. Look before you leap – hasty decisions can be expensive
Stephen Fleetwood concludes: “Prior to the pandemic many companies had already invested in making space more attractive and useable and this is just as important now, if not more so. Look before you leap – hasty decisions can be expensive.”