Commercial landlords need new investment to retain good tenants

Despite a faltering economy, staff and skill shortages in companies mean that in many cases staff are virtually unsackable and they are pressing increasing demands on employers for improved fringe benefits. Companies are responding both to retain and attract new talent.

The result is a requirement to up-grade existing facilities in offices and other business premises. The tech industry is perhaps at the “tip of the iceberg” here, but other employers are under pressure to follow suit and offer employees better work-place facilities, not to mention the urgent need to improve energy efficiency.

New research

A recent study by MRI Software, a global leader in real estate software, found that two-thirds of employees want ‘hotel-style’ amenities at their offices. The new survey tapped 6,000+ US, UK, and Australian office workers for their opinions. The results show an increasing trend in these types of real estate settings, modern workplace features are now expected, and necessary to attract and retain the best talent, in a post-pandemic world.

Skill shartages

Almost 50 per cent of companies are finding it difficult to fill one or more job vacancies and see the need to improve not just the oft quoted “work-life-balance” for staff, but also the facilities available whilst they are at work, given that in some instances many are still working-from-home (WFH).

The lifting of lockdowns in the West, following the fortuitous and timely roll-out of effective Covid vaccines, resulted initially in surging consumer spending. Encouraged by strong household balance sheets after a year or more of forced saving the increased demand, coupled with supply shortages due to Covid, led to a ramping up of inflation. This at the same time as governments were tightening fiscal policies to deal with the debt overhang left by bailing out individuals and companies is leading to recession.

The war in Ukraine, with its increased energy and food prices, has only added to the woes of Western countries, but the looming recession seems to have done nothing to improve the jobs / labour supply problem. Long-Covid, career changes, part-time instead of full-time working and early retirements are blamed for much of the shortage of staff issue.

Hotel style office facilities

The result is, especially in the office sector, ‘hotel-style’ office amenities and user-friendly work tools are emerging as a key part of the employer play-book for winning over new and existing staff, that’s according to the new survey which was commissioned by global PropTech giant MRI Software, a UK leader in property solutions.

The survey of 6,000+ US, UK, and Australian consumers (2,004 in the UK) shows that almost two-thirds (64%) of employees now look for workplace amenities such as areas for socializing, outdoor spaces, on-site cafes, state-of-the-art infrastructure, air conditioning and flexible work facilities. These are crucial insights for employers to draw on to keep talent in a post-pandemic world.

Work campuses

One example of the trend is FI Real Estate Management’s programme of refurbishment works at the former IBM work campus in Warwick. The £4.5m investment package being put in will involve the firm undertaking a complete refurbishment of its two-storey development on Haywood Park.

The development will provide office space at a variety of sizes, also incorporating co-working space for freelancers, small businesses and those looking for satellite offices. The fit-out work will be completed by workplace specialist Office Principles, and will also see the scheme rebranded to become “The Woods” [Pictured above].

FI Real Estate Management has said of the scheme:

“The Woods, our newly branded development in Warwick, is an exceptional office space and we have been very excited about its refurbishment this year. We have been working closely with Office Principles to develop designs that will transform the space into vibrant offices with a contemporary look and feel.

“The development’s location and the size of space available have already drawn major interest from the West Midlands and beyond. With the refurbishment now underway, we are significantly elevating our offer, bringing fresh and invigorating space to the market in Warwick.”

Dockland’s developments

Likewise, UK real estate British Land behemoth’s strategy is to develop along the campus concept theme, combing “well connected, high quality and sustainable buildings with an attractive public realm where businesses can cluster together to drive growth and innovation.”

The company are delivering a fourth Campus at Canada Water in London’s Docklands, and says it has identified opportunities to take this successful model outside London, targeting centres of innovation such as Oxford, Cambridge and well established research parks

British Land says that “employers are increasingly using office space to attract and retain key talent; buildings which promote health and productivity are an important part of this approach, so our developments and refurbishments incorporate wellbeing principles by design. We also look beyond our campuses; we invest in local communities and our events and activities bring people together and enliven our space for everyone who uses it.”

Hybrid working

The MRI Software research study shows that hybrid working is leading organisations to rethink the workplace as most people want the flexibility to combine work-from-home with in-office options.

The key findings include:

· 19% say amenities are “critical” to deciding whether to work at a job or not

· 11% say “If an employer doesn’t have a lot of these things, I’m not interested”

· Over a third (34%) see them as key factors after the nature of the job itself

· Only 15% of people want to work at home every day

MRI is a leading player in the UK property technology market and counts Savills, Knight Frank, Lloyds Pharmacy, Holland & Barrett, and the UK Government’s Foreign and Commonwealth Office among its 4000+ clients worldwide.

Similar issues in the trades

Andy Walker’s engineering firm told The Daily Telegraph that a problem usually associated with an economic boom, too few workers, is persisting even with a recession looming. It appears that companies are focussing on pay restrain rather than looking to lay-off staff:

“Everyone you speak to in the industry seems to be struggling to get trades people,” says Mr Walker who is the managing director of Lancashire-based Walker Engineering. “I think we lost a lot [of staff] in Covid around the 60 year age that decided enough was enough.”

In the immediate period after the lifting of lockdowns staff enjoyed a period of job security when labour shortages were allowing them to bid-up wage levels throughout the economy. Many workers changed jobs or careers, while others deemed it time to call it a day!

Although the era of the almost “unsackable” worker may be drawing to a close with recession indicators rising, employers seem reluctant to let good staff go and are doing all they can to retain good talent and skills.

They realise that reducing staff on the way down could leave them short when the tied turns. Most employers will do all they can to keep good staff – and that includes improving work-place facilities – when economists are warning that labour shortages are here for the long-haul.

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