4 lessons financial services real estate departments can take from big tech
As expectations for corporate real estate departments shift, tech firms are setting the tone for people-first innovation by prioritizing data and the end-to-end user experience.
In most industries, the Corporate Real Estate (CRE) function is shifting beyond managing transactions and keeping the lights on. Today, CRE teams are expected to develop and facilitate a swath of strategic solutions that drive value and support the core mission of the business. They must prioritize cost-reduction strategies, compliance, new technology adoption and integration, all while making the office an amenity that attracts, retains, and inspires talent.
The financial services industry is no exception. But as a more traditional industry that values its time-tested processes and proven business strategies, rapid change can be difficult. As business transformation is at the forefront of driving growth, financial services CRE leaders are looking to other industries for inspiration, most ardently tech.
While the technology sector has endured major disruption this year with more than 141,000 layoffs, tech has historically been a driving force in engaging workplaces and unmatched services and new human-focused strategies are reshaping the office for the better—and revealing fresh opportunity for financial services CRE leaders looking to do the same. In addition, as banks are ramping up their investment and focus on driving technology within their organizations and their customers, which leaves them competing with tech for much of the same talent, especially Gen Z, so it is incumbent on banks to learn from their tech peers.
Leading tech firms have identified and implemented key changes responding to emerging workplace trends, creating workplaces that better serve the people who use them.
It's a model financial services companies would be wise to follow. Although financial services companies are more office-forward than the technology sector, they must create an office experience that inspires and supports a variety of work preferences—or possibly face employee retention issues.
Following are four ways to elevate the impact that in-house CRE teams can have on their financial services organization, as modeled by leading tech companies.
Rethink the purpose of the office
The office experience has been the cornerstone of the return-to-office campaign across many industries, but as a whole, financial services firms have not yet been able to achieve a universally satisfying hybrid experience. While many have created great experiences for some departments or employee groups, most have fallen short of integrating a cohesive office experience into the broader real estate strategy.
Evolve the skills of your corporate real estate leaders
Simply put, the “product” that CRE delivers to a company—a resilient, engaging, and optimized workplace—has changed significantly post-pandemic. If the product is changing, the team (i.e., “the factory” providing it) must as well. Business acumen, critical thinking and high-touch experience mindset have emerged as requirements for building high-performing teams, but how can financial services firms cultivate these skills in the people they already have?
Broaden hiring practices
Unlike technology companies, financial services companies are actively hiring new talent—and many are struggling to fill roles or find talent with the right skills and experience. A North American survey from IDC found that 50% of financial services firms are struggling to find candidates with the right skillsets to meet their needs.
Embrace digital transformation
Automation and artificial intelligence (AI) are revolutionizing the workplace, replacing some job functions while redefining others. Eighty-five percent of companies are increasing their CRE technology budgets despite a difficult operating environment because they understand that it is a key differentiator and driver to meeting their wider business objectives.
Operationalizing hybrid work takes time and requires an openness to continuous innovation and experimentation. It means having a willingness to pilot and test new ideas, even if they have a chance of failing. Moving beyond low-value amenities like ping pong tables to the more meaningful shaping of experience standards can be achieved by conducting outreach, surveys, and benchmarking to better understand what employees want and need.
The key takeaways from this process will likely redefine the purpose of the office and real estate and leasing strategy, with profound ripple effects across office design, layout and even team scheduling. Standard practices may still look different from department-to-department or even between geographies, but the key is to institute a system that responds to all employee needs and preferences, with flexibility built in.
To bring people-friendly solutions to life, you might choose to retrofit existing workspace or move to a new location. For example, JLL worked with a large financial institution to create an employee-centered New York headquarters.
The organization opted to relocate to design an office space that fostered collaboration and engagement as well as represented the company’s culture and sustainability goals. Through employee surveys and other exploration, project partners were able to pinpoint workplace solutions that would deliver on all counts.
Today, the new headquarters directly reflects employee tastes and preferences, from a “Test and Learn” space, quiet zones and meditation points, light and acoustic variability for neurodiverse employees, to apps for ordering lunch or viewing available seating and a dedicated guest services team. These thoughtful elements help to elevate the workplace experience.
For inspiration, look to tech companies that have supported extending the CRE role by shifting the reporting structure and encouraging collaboration between departments. Many tech CRE leaders are reporting into HR or Chief People Officers, rather than the CFO or CAO. They have also ramped up cross-departmental collaboration, working closely with HR, tech, and communications to ensure that CRE is providing the strongest value to each business unit. A broader employee focus demonstrates the value that CRE provides to the business, and collaboration across shared services enables CRE to take the lead on an integrated strategy.
One solution, to borrow from the tech sector playbook, is to shed traditional hiring practices. Pursuing CRE candidates with a financial services background seems like the fastest and most sensible approach, but what you’ll gain in onboarding efficiency you may lose in your ability to innovate.
Consider tapping into emerging skillsets, like professionals with experience in health and wellbeing, hospitality, and events management. Other ways to drive value in the workforce include upskilling and reskilling current employees through education, training, and mentorship programs. And, if one of your priorities is to improve how CRE partners with the business, consider bringing in a team member from the business into CRE. You may find that their knowledge of the company and culture complements the CRE skills of your team to deliver higher value.
Goldman Sachs recently reported that generative AI could replace up to 25 percent of the workforce or 300 million jobs. In the business and financial services sector, that number jumps up to 35 percent. Predictions aside, technology is an invaluable tool for current professionals to effectively do their jobs, often managing low-value tasks so that professionals can dedicate their skills to critical business functions.
Over the next three years, occupiers are focused on tech solutions that will increase revenue, measure and improve sustainability metrics, and improve business decision-making. But despite ambitious goals, the majority of companies are struggling to achieve their technology objectives. This is due to the complexity and abundance of tech offerings, maturity in platforms and solutions, and disconnected data. Many tech companies have naturally integrated technology into the workplace—it is, after all, their industry. When it comes to transformation, here are a few strategies that are working well across tech and financial services, and some that aren’t:
|What’s not working
|Separate data efforts that don’t go deep enough or include data from other departments (HR, operations, etc.)
|Integrated data models and platforms that bring cross-departmental stakeholders together
|Decision-making that is completely consensus driven vs. command/control
|Healthy blend of balancing multiple stakeholders needs with swift data-backed decision-making
|Thinking of ‘workplace’ in singular terms
|Holistic physical and digital workplace experience that extends beyond the office
|Basic one size fits all bundles
|Thoughtful details and experiences that vary across a portfolio, tailored to business need
|9-5 office experience
|End-to-end workday experiences creating “Moments that matter”
Despite decisions can sometime take longer in the tech industry due to multiple stakeholder approval levels, however, the returns equal a better workplace product and experience for employees. Tech experts have the benefit of a long history of thinking through how consumers experience their products and are constantly making improvements to the user experience. Taking their learnings is a strategy that sets their workplaces apart because they often take the same approach to designing their workplaces and experiences that they offer employees. Combining financial services swift decision-making with the thoughtfulness of a holistic workplace experience strategy is one -way banks can stand out.
A future-friendly financial services office will mirror the way that employees often use technology in their daily lives—seamlessly. By integrating physical and digital work experiences, your CRE team together with HR and IT can help give employees the connectivity they need.
A proven new vision for the financial services workplace
There’s no one route to success in the fast-changing nature of work, for financial services companies or other sectors. The good news is, the tech industry has forged a clear trail for those CRE departments ready to venture forward.
By considering lessons from tech, financial services CRE leaders can embed an improved experience across its workplace ecosystem while returning maximum value to the enterprise, its employees, and customers they serve.