How HR Leverages
Real Estate to
Rewrite the Talent
Alignment between Human Resources and commercial real estate leaders is crucial when discussing a company's workplace and talent strategy.
The hiring landscape is changing. Voluntary employee turnover rates, consistently on the rise since 2010, are now exceeding pre-recession levels, according to the Bureau of Labor Statistics. Meanwhile, 45% of employers worldwide say they can’t find the skills they need — the highest percentage in over a decade, according to the most recent Manpower Group Talent Shortage Survey. Inability to retain employees is saddling employers with enormous financial burdens, with Gallup estimating that millennial turnover alone costs the U.S. economy $30.5 billion annually.
Suffice it to say, it’s a challenging time to be a HR leader.
The silver lining? The changing talent landscape provides HR with a tremendous opportunity to explore innovative strategies for hiring and retention. With a record 47% of Gallup workforce reporting that now is a good time to find a quality job, C-suites are feeling the heat of a competitive job market — and HR leaders should seize the moment.
“We have a burning platform right now with an incredibly tight labor market,” says Mary Bilbrey, Global Chief Human Resources Officer at JLL. “Every tool you have, you have to pull out.”
One such tool finally receiving its due as a talent game-changer is the physical workplace. While the real estate and talent agendas have traditionally been managed in separate silos, forward-thinking HR leaders now see a direct link between the two areas — and are acting accordingly. By collaborating with real estate to create a physical workplace centered around the employee, these HR leaders are not just increasing worker productivity, engagement, and retention rates. They are helping their companies best their competitors in the war for talent — and in doing so, rewriting the rules of the HR playbook.
“Today’s top employers understand that you have to compete on all axes,” says Bilbrey. “The way your space presents, where you’re located, the amenities you offer, the workplace benefits you provide — these are all big components in making you the employer of choice for top talent. More and more, HR is becoming a key player in the conversations that implement these elements.”
Cross-company problems require cross-company solutions
Though the payoff can be enormous, forging the relationships necessary to drive workplace change is no small feat. Uniting traditionally siloed divisions requires HR to position such partnerships as beneficial to the overall company. To do so, HR should start by building a financial case.
“HR needs to come to the table with a commercial view,” says Bilbrey. “You need to say, ‘Here is the cost of recruiting, the cost of the time to fill jobs, the cost of turnover, the cost of health and wellness benefits — and here’s how a smart, combined strategy between the talent and real estate agendas can help bring those costs down.’”
When presenting a financial case, HR can frame physical workplace investments as essential to the company’s long-term viability, according to Dr. Marie Puybaraud, Global Head of Research for JLL Corporate Solutions. Dr. Puybaraud sees a change in the way forward-thinking companies are looking at commercial real estate — and a corresponding opportunity for HR to get involved.
“Traditionally, real estate has been seen as a cost,” says Dr. Puybaraud. “Now, more and more companies are looking at real estate as an investment. At a certain point, you are not talking about just the physical environment, but also the culture — how people work together and interact. That’s why HR gets into the conversation.”
Joining the conversation, however, is only half the battle for HR. Enacting effective change requires HR leaders to combine an understanding of real estate priorities with an awareness of larger physical workplace trends, all while considering their own employees’ specific needs. Balancing all three components requires an intentional, patient, and nuanced approach. HR leaders looking to begin the process should understand the following basic truths:
Education is essential — From learning how to speak the language of real estate, to becoming an expert on emerging trends in the physical workplace, it is critical for HR leaders to augment their existing knowledge base with external education.
Perspective matters — While surveying employees can provide key insight into their opinions about the workplace, HR should balance the employee perspective with a larger awareness of how design features influence productivity, engagement, attraction and retention.
Change takes time — Maintaining a patient, long-term approach is necessary throughout every facet of the workplace re-design process, from establishing the initial relationship with real estate to seeing results from the implemented changes.
In today’s ultra-competitive hiring landscape, creating an employee-centered physical workplace is quickly evolving from a luxury to a necessity. Those winning the war on talent have already realized the importance of cross-company partnerships in optimizing the workplace for talent attraction and retention, not to mention employee engagement and productivity. Though affecting change may not be an overnight process, its challenge is exceeded only by its gains. The result? HR leaders are left with two choices: become a contributor to the conversation on workplace change or get left behind.