Many elements are changing within the profession of corporate real estate, with the driver being today’s employee. Our world is more globally connected than ever with innovation and continuous interruption occurring at a rapid pace. Along with this connectivity are workspace trends transforming how work actually gets accomplished.
The CRE Shift
Senior executives now must know corporate real estate needs, models and terminology; keeping current in CRE knowledge shows how influential CRE is becoming in the business world. The traditional CRE role is shifting away from space size, location and timing toward delivering services to support people, place and technology. This shift means CRE professionals need to have a broader skillset, as the future is less about space and more about services and strategy. Traditionally the CRE role measures success by the square foot, but now professionals also need to understand the various needs beyond the physical space, such as macroeconomics, the drivers behind innovation, and where and how to attract and retain talent.
Technology is a key component in CRE’s future. A report by McKinsey Global Institute points out that digital flows now have a large impact on gross domestic product (GDP). Thus, CRE executives need to be aware of how this will influence their function in real estate, especially in terms of attendant cyber security risks and cyber security needs within building management systems.
Tech also impacts how cities attract talent. Smart solutions for infrastructure challenges are increasingly more important for city planners and managers and are already a vital factor when deciding locations. Companies are more drawn to the cities that pursue young talent and keep up with the technology infrastructure needed to maintain not only growth but also future cyber needs.
Next Generation Workers
Our next generation of workers is even more mobile and connected than the millennial set. These workers will change real estate requirements regarding how much space is needed, where facilities will be located and how the space is designed, used and managed. This generation’s workplace will be built around technology networks and the complexity needed to sustain them. CRE will need to provide the technology-enabled workplace networks that support greater agility and flexibility for both the company and the employee. So much of our future work activity is going to be automated, or outsourced, that employee numbers within an organization will shrink. With this more mobile workforce, people are working for any location and at any time, making the office needs much more flexible and often smaller. The struggle to attract and retain new talent is putting more emphases on the physical environment and highly developed workplace experiences.
Ecommerce fuels demand for logistics and distribution facilities that are well-located and highly efficient, while manufacturers are continuing to replace people with robots in automated facilities. What this all means for CRE is that different skills are needed with more specialization across industry and type of facility.
Physical space needs will continue to shrink as more work takes place online or remotely. As technology continues to improve the mass manufacturing processes, look for yet another shift from large to smaller size production facilities or those that specialize. In addition, small-line production will be moving closer to the customer so it can get products to people more quickly. We already see this here where tech parks are being developed next to large cities reducing travel time for employees and deliveries.
Operating at the Strategic Level
The CRE role in major corporations is becoming more strategic and will be at a higher level within the company making it either part of the executive level or a support role into it. The employee experience is an important goal that will become even more important as the years progress. Some CRE professionals think the CRE role will become more of an “experience manager” that offers employees an a la carte workplace experience with a menu of services, locations and support. Here is where I think logistics, human resources and corporate real estate cross over and should even cross-train: the focus on the employee experience will be added to the traditional role and not replace it.
The Gig Economy
Our next article will dive into the gig economy and outsourcing and how they will impact the CRE role.