95.2% 30% CORPORATE REAL ESTATE CHALLENGES IN 2013 SURVEY SUMMARY. Financial Services

Transcription

1 Financial Services CORPORATE REAL ESTATE CHALLENGES IN 2013 SURVEY SUMMARY Highlights % While 95.2% of respondents believe the workplace has an impact on employee productivity %... only 30% measure how the workplace impacts productivity. In the ever-changing financial services industry, corporate real estate (CRE) teams face myriad challenges in maintaining increasingly distributed/global portfolios. Mergers and acquisitions, as well as corporate dissolutions have confronted CRE teams with portfolios that can literally change overnight. Despite this volatility, portfolio managers are expected to demonstrate strong value in sustainability, speed-to-market, cost reduction and operational efficiency. Building on the findings of Gensler s 2010 Global Portfolio Management and Planning Survey, we conducted a survey last year to delve deeper into CRE challenges. The questions specifically looked at growth, information tools, and workplace strategies. This summary highlights the survey results. The findings offer insights into the types of tools and processes that can assist CRE teams in better managing their real estate portfolio. Corporate Real Estate Challenges in 2013

2 METHODOLOGY Gensler issued this survey to senior leaders of top financial services firms: 90% were at the VP level or above SVP, Executive Director, Managing Director, C-Level and report to the most senior levels of their organizations 81% represent US-headquartered firms RESPONDENT PROFILE Global Scope Respondents were responsible for understanding and directing global portfolio holdings with very diverse local workplace and real estate conditions. Portfolio Size 60% of the companies surveyed had portfolios of more than 5 million square feet. Real Estate and Workplace Responsibility Just over half of respondents reported responsibility for workplace decisions. A third reported responsibility for both real estate and workplace decisions. Over which geographies do you have direct responsibility? Approximately how many square feet of total real estate does your company have in its entire portfolio? Which of the following statements best describes the scope and responsibilities of your role? 100 (%) United States 90% Canada 30% Central/South America 30% Asia-Pacific 30% Western Europe 25% United Kingdom 25% Australasia 20% Eastern Europe 20% Middle East 20% Africa 20% 50 to 100 million sf 23.8% 20 to 50 million sf 9.5% 5 to 20 million sf 28.6% 2 to 5 million sf 9.5% Less than 2 million sf 28.6% Workplace Decisions 53% Both Real Estate and Workplace Decisions 33% Real Estate Decisions 14% Corporate Real Estate Challenges in

3 Growth and Consolidation Possibly as a result of the volatile economic situation of the last few years, 21.1% of respondents indicated their company expected no headcount growth in the near future, a change from our findings in Overall, respondents still expressed strong expectations for portfolio expansion over the next three to five years, with the strongest growth potential seen in new markets such as the Asia-Pacific region and Central and South America. Respondents expected smaller growth in Europe, the Middle East, North America, Australasia and Africa. 52.6% of respondents expected portfolio consolidation to occur in North America, 15.8% in Western Europe, and the United Kingdom and Eastern Europe both predicted at 10.5% for portfolio consolidation.* Where do you expect the most portfolio activities for your company over the next three to five years? Growth Consolidation United Kingdom 0% 10.5% Eastern Europe 10.5% 10.5% United States 10.5% 52.6% Central and South America 21.1% Western Europe 15.8% Middle East 0% Asia-Pacific 57.9% Australia Corporate Real Estate Challenges in

4 Economy Still Looms Large When asked to rate various factors for potential impact on the industry, concerns about the economy dominated the responses. Economic volatility took the top spot 84% of respondents were concerned about its impact on the industry, with business models and growth in new markets claiming second and third (78% and 72%, respectively). Talent availability was also a consideration for almost 2/3 of respondents, while generational shifts and climate change rounded out the list. For the factors listed below, please indicate the level of impact you believe each will have on the future of real estate and the workplace in the financial services industry. (percent citing high or very high) 84.2% 77.8% 72.3% 61.1% 44.4% 38.9% 29.4% 15.8% Economic volatility Changing business models Growth in new markets/geographies Talent availability Cyber security Political risks/uncertainy in emerging markets Generational shifts Climate change Within what timeframe do you generally plan for business changes or headcount growth? Planning for the factors above is done on a relatively tight schedule, with 63.2% of respondents saying planning for change happens less than three years out. Another 31.6% of respondents said they plan three to five years out. Less than 3 years out 63.2% 3 to 5 years out 31.6% 11 to 15 years out Corporate Real Estate Challenges in

5 Informing the Right Choices Timely access to information is vital for CRE decisions. Survey respondents indicated better understanding of space utilization and business unit workflow/processes would be most helpful. At the opposite end of the spectrum, benchmarking against peers was seen as important by only 1/3 of respodents. How would you rate the importance of the following information for making effective real estate/workplace decisions? (percent citing quite important or very important) Space utilization 83.3% Better understanding of business unit workflow/work processes 83.3% Electronically available occupant information who sits where 77.8% Employee satisfaction with physical environment 68.8% Employee work patterns/work styles (i.e., mobility) 61.1% Cultural variances differences in workplaces across regions 55.5% ROI for sustainability strategies 52.9% Peer comparisons 33.3% Confidential Financial Services Client, Minneapolis, MN, USA Corporate Real Estate Challenges in

6 Workplace Important to Productivity But Often Unmeasured Almost without exception, survey respondents agreed that real estate and the workplace impact employee productivity. But only 30% report that they measure that impact. This highlights an important opportunity financial services firms have to develop a strategic approach to portfolio and workplace management that aligns with business objectives and metrics. Do you believe that real estate and the workplace impact employee productivity? Do you measure how the workplace impacts employee productivity? Yes 95.2% No 4.8% No 70% Yes 30% Companies that do not currently track productivity gave relatively consistent weight to measures of employee satisfaction, engagement, retention, attraction and work flow. Companies that do measure productivity, reported they rely heavily on measures of employee satisfaction and engagement, and slightly less so for retention, work flow and attraction. Both groups saw employee health as least valuable. Companies That DON T Measure Which of the following measures do you think would best help you track employee productivity? vs Companies That DO Measure Which of the following measures do you use to track employee productivity? 61.5% 53.8% 69.2% 69.2% 53.8% 30.8% Employee Satisfaction Employee Engagement Employee Retention Work Flow/Work Process Analysis Employee Attraction Environmental Impact on Employee Health 100% 66.7% 50% 33.3% 33.3% 33.3% Corporate Real Estate Challenges in

7 Strong Interest in Alternative Workplace Strategies When asked about interest in a variety of alternative workplace strategies, respondents indicated strong interest in nearly all options, pointing to their openness for new approaches to traditional workplace design. Which of the following alternative workplace strategies do you believe are of greatest interest to the financial services industry? (percent citing quite interested or very interested) Most 79% 73.7% 72.2% 66.6% 57.9% Open, collaborative spaces with solutions for addressing privacy Design strategies based upon work flow (i.e., activity-based settings) Consolidation smaller offices/smaller workstations Mobility programs (no desks/shared desks) Employee work-at-home solutions Least In terms of drivers of alternative workplace strategies, repondents cited cost as the number one driver, but followed closely by the desire to attract and retain talent with flexible work arrangements. Which of the factors below do you think are the biggest drivers of alternative workplace strategies? (rank each factor where 1 has the biggest impact and 7 the least) 1. Need to reduce real estate costs 2. Flexible work strategies to attract and retain talent 3. Advancements in technologies that support virtual communication 4. Business emphasis on collaboration 5. Differences in how employees work today 6. Preferences younger workers have for space 7. Digitization of information storage and retrieval Corporate Real Estate Challenges in

8 Key Takeaways Corpore Real Estate Executives (CREs) remain focused on the bottom-line. They are looking for opportunities to cut costs even as they recognize the need to retain talent and evolve in response to changing business models. Information is at a premium. There is a growing interest in work flow and process analysis alongside continued interest in traditional data such as space utilization and employee satisfaction. Measures of workplace productivity are strongly desired but rarely used. Alternative workplace strategies are on the table. Cost and flexibility are the top factors driving interest in new ways of working. For more information, contact: Rocco Giannetti rocco_giannetti@gensler.com +1 (212) Rockefeller Center 1230 Avenue of the Americas Suite 1500 New York, NY USA Dianne Dodge dianne_dodge@gensler.com +1 (949) Gensler The information contained within this brochure is and shall remain the property of Gensler. This document may not be reproduced without prior consent from Gensler. Twitter.com/GenslerOnWork Facebook.com/GenslerDesign YouTube.com/user/GenslerTV 4675 MacArthur Court Suite 100 Newport Beach, CA USA