I recently finished a report on the condition of the New Jersey economy and the challenges facing companies that call the Garden State home. While we can all whine about cost of living, high taxes and excessive regulations, we should all remember the quality of life and education levels of the population.
None of those even come close to dealing with the challenge of recruiting and retaining quality talent. Baby Boomers will start retiring en masse in 2018 and there won’t be enough talented people to replace them. The New Jersey Department of Labor is projecting that the population will remain essentially flat, meaning that competition for quality talent will be fierce. The recruiting pool will be comprised of Millennials and Generation Z, with all of the opportunities and challenges associated with those groups.
We will see more demands for “work/life balance” along with a willingness to work anytime and from anywhere. Straight compensation will still be critical, but creating a workplace that encourages “stickiness” will be just as important. Companies will have to re-think how they design space and the work styles that can be accommodated in those spaces. Employees are already looking for work environments that encourage creativity and engagement, allow collaboration, and disengagement, when necessary.
Cost control will always be a part of the real estate decision but employee retention, recruiting, and productivity will outweigh any marginal cost reduction opportunity. Employers will start demanding that buildings be well appointed and fully amenitized. The cost for these features will be more than outweighed by the gains created by lower turnover and increased workplace effectiveness.
Savvy landlords will understand that they need to evolve from simply delivering an office space to becoming a partner in creating a dynamic work environment.