3 ways the right real estate can improve business resilience
Learn why real estate could be the differentiator your business needs to succeed
If the past several years have taught us anything, it’s that we live in an era of constant transformation with complex and ever-changing circumstances amid geopolitical and economic uncertainty.
Faced with such challenges, it’s time companies stop viewing their real estate footprint as a cost center, and instead, start approaching it as a competitive advantage. Insights from JLL’s latest survey of over 1,000 real estate decision-makers across the globe suggest that we’re entering a crucial, two-year window of opportunity for organizations like yours to redefine your workplace strategies and create flexible, tech-enabled, future-proof real estate portfolios.
"We’ve seen buildings become a critical enabler of successful organizations, especially in attracting and retaining talent."
In a recent survey, we found that 50% of office workers have left their job since the start of the pandemic. People working remotely three to four days a week are the most volatile; 74% have left their job in the past two-and-a-half years, and 79% said they could do so in the coming months.
Here’s how you can turn your real estate from a costly expenditure to a source of support for future business resilience:
1. Reduce office costs to maximize flexibility
Hybrid working has changed the way we use office spaces. Evaluating your real estate portfolio and lease commitments to ensure you have the right spaces in the right location and with the right services and amenities can help identify where you’re operating inefficiently and reduce costs.
"For many of our clients, we’re finding this doesn’t necessarily mean less or more overall square footage but rather using spaces differently and increasing the quality of the space."
Example: Based on their employee growth projections, 87% of one non-profit client’s offices will be at or near capacity by the end of 2025. Instead of looking for more square footage, they opted to spruce up their current space with updated policies like desk-sharing. They also chose to add more “work points” or alternate seats where focus and collaboration can happen –like phone rooms and meeting spaces. JLL uncovered an opportunity to save the client over $1 million in annual rent based on recommendations to better use their office portfolio, support hybrid work and modernize the workplace.
But it’s not just about enhancing or rearranging your space. Lease renegotiations and sale-and-lease-back strategies can also help diversify and increase your portfolio flexibility. In some cases, short-term leases—those you’d find through co-working and flexible space providers—can give you the flexibility you need to withstand short-term economic shocks.
2. Improve business resilience with office space technology
The pandemic proved how reliant we are on our technological infrastructure, both in and out of the workplace and how fragile our businesses can be if technology fails to deliver.
Setting a good baseline for metrics and putting in technologies that measure where and how employees are using space are key to making faster decisions. Yet, our research shows that only 13% of organizations currently use real-time analytics for business decision-making. But 56% of companies plan to adopt technology for predictive facility management in the near future to improve performance and the overall lifecycle of their assets.
And that’s a smart move. In a study from Forrester Consulting, one intelligence-driven facilities management platform, like Corrigo, can deliver 238% ROI by uniting operations, asset and work order management, maintenance and analytics for smarter facilities management.
As the use of space becomes more dynamic and portfolio composition more complex, companies are turning to data and Artificial Intelligence to help reduce costs, make better portfolio decisions and enable work from anywhere. For example:
- Work technologies support companies moving from attendance-based to outcome-based.
- Workplace technologies help create a healthy, dynamic and engaging work environment that’s energy efficient and automated.
- Portfolio management technologies use new data sources to design and optimize workplaces.
Example: JLL analyzed an insurance company's badge swipe data to understand how often employees were coming into the office to create a portfolio optimization strategy for its more than 1 million square feet of space. Through the analysis, JLL determined the client could shed about 40% of its portfolio, saving them nearly $6 million in annual rent in their first year and consolidating from five buildings to three.
Without sustained investment in technology and data, companies will find achieving performance and resilience goals more challenging. Technology implementation is still at an early stage, but companies will need to double down on intelligent investments in the next two years.
3. Plan for the future of work
There’s no going back to the way things were. Our research shows that 53% of organizations will make hybrid working permanently available to all employees by 2025, and 77% agree that offering hybrid working will be critical to attracting and retaining talent, meaning companies need to have strategies in place that will help retain employees while keeping them happy and productive.
Quality of life is now ranked as the number one employee priority, with health and well-being a close second, according to JLL research. In fact, 59% of employees now expect to work for a company that takes care of the health of their people.
By creating a safe, supportive environment, your people can better adapt to adverse situations, retain motivation and maintain high performance.
"What’s more, improving workforce resilience by enhancing physical and mental health and well-being is the number one strategic priority for the real estate function between now and 2025, with almost half of the decision-makers in our global Future of Work survey saying they plan to expedite investment to support this."
The bottom line? The ability to create resilience in your business relies on a resilient workforce paired with a robust physical infrastructure. And don’t forget rugged technological platforms: a fusion of people, place and technology. It also means successfully navigating new working patterns against a backdrop of constant change - which is easier said than done. But when we embrace change, we find new ways of doing things.
Building a diversified and flexible portfolio enables organizations like yours to future-proof your real estate and respond to significant disruptions. It’s time to shift from survival mode and find ways to adapt and transform our buildings to better support resilience, now and in the future, so we can handle whatever comes our way.
Want to know more about how to give your business a competitive advantage? Click here.