Global CRE trends 2018 - Marie Puybaraud Global Head of Research JLL Corporate Solutions
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Top 10 CRE Trends for 2018 Dynamic workforce Flexspace Innovation culture Digital drive Smart real estate Rapidly changing workforce Coworking and flexible A work environment Harness digitisation and Digitally enabled environment workspaces supporting creativity, cross- rich data real estate collaboration and innovation Adaptive organisation Future skilling Wellness Humanisation Community Responsiveness to a Rethinking skills base and Being in good health as an Reintroducing the Nurturing a rapidly changing operating profiles actively pursued goal human factor at the network of environment core of the enterprise interdependent individuals © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. 2
Portfolio career Liquid workforce Between 20% and 30% of the working population is already working in the on- demand or gig economy. 80% 60% Source: Independent Work: Choice, Necessity and the Gig Economy, Mckinsey, 2016 of all employees during of the workforce nowadays Coworking the 1980’s worked for the switches employers after only four. of
Flexible working Workplace utilisation About 30-40% of space is underutilised of employees work from home at during a typical workday. 54% least once a month. Source: Occupancy Planning Annual Report, JLL 2017 Supply side growth of employees say access to No. of coworking spaces worldwide external co-working spaces has a 16 000 positive or a very positive impact 13 800 >60% 14 000 Coworking and flexible on their engagement and 11 300 12 000 workspaces productivity at work. 10 000 8 700 8 000 5 800 of employees work at least once a 6 000 3 600 The proportion of flexspace month from third places such as 4 000 2 070 within CRE portfolios will 34% internet cafes, public libraries or 2 000 1 130 co-working spaces. 0 continue to grow in 2018. Source: Human Experience, JLL, 2017 2011 2012 2013 2014 2015 2016 2017 Source: Coworking Survey, Deskmag, 2017 Incorporate flex-space as a core part of workplace and portfolio strategy. © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. Menu 4
Cross-Collaboration Operating models for innovation of CEOs plan to enter new Open innovation 61% strategic alliance or joint venture. 48% Source: 20th Annual CEO survey, Design thinking 59% PwC, 2017 Co-creating with customers, partners, suppliers 55% Traditional R&D 34% Innovating in emerging markets, exporting to developed markets 34% Taking risks, failing fast, trying again 31% A work environment supporting Open Innovation Internal incubators 27% creativity, cross-collaboration Investing in start-ups via and innovation of large companies stated that corporate venture capital 21% open innovation is important or critical to higher levels of future New collaboration 97% business performance. Q: what operating models does your organization currently use to imperatives are changing Source: Building a Digital Ecosystem: drive innovation? Percentages denote the number of companies using these innovation models. Collaborate for Growth, Accenture, 2017 corporate innovation Source: PwC’s Innovation Benchmark; Base: 1,222 infrastructure. Source: Innovation Benchmark, PwC, 2017 Review innovation infrastructure to foster hyper-collaboration within © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. and outside the organization. Menu 5
IoT investment Digital drivers 1 000 832 To meet changing IoT investments by businesses 80% customer expectations are projected to grow dramatically $M 500 215 over the next few years. To improve operational 52% Source: Leveraging the Upcoming efficiency 0 Disruptions From AI and IoT, PwC, 2017 2015 2020 To reinvent business / 47% operating model To create new products 41% Harness digitisation or services and rich data AI Investment 0% 20% 40% 60% 80% 100% of executives report they will invest extensively in AI-related Q: Why companies feel the need for digital transformation. technologies over the next Integrated technology and 85% three years. (Survey of leaders responsible for digital transformation initiatives). ecosystems will drive new Source: Technology Vision, Accenture, Source: Digital Trends Report, Nimbus Ninety, 2017 levels of enterprise 2017 performance. Align CRE strategy with enterprise-wide digital transformation. © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. Menu 6
“Traditional real estate organisations need to engage with PropTech companies in order to adapt to the changing global environment.” Technology partnerships Return on investment of real estate decision makers 89% agree with the statement Digitally enabled 81% real estate of real estate decision makers expect to collaborate with an Smart real estate existing or new supplier to develop their technological of occupants report that smart buildings technology is transforming 49% innovation capability. improve employee retention. the real estate life cycle. Source: Bridging the gap, Global Source: Smart Buildings Decoded, BPIE 2017 PropTech Survey, KPMG 2017 Deploy emerging smart real estate solutions to optimise user-experience © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. and enhance enterprise performance. Menu 7
Agility Drivers Why Businesses should improve agility? of companies report that “agility Management-level executives rated the top and collaboration” are critical to reasons for improving agility. their organization’s success, yet 94% only 6% say that they are “highly agile” today. Source: Global Human Capital Trends, Deloitte, 2017 Key obstacles to digital transformation 84% 65% 58% Responsiveness to a rapidly believe the expect higher expect higher Lack of properly skilled teams 63% changing operating capability to customer employee Outdated technologies 61% environment respond more satisfaction productivity and Lack of integration of new and existing technologies and data 59% quickly to new and retention. retention. opportunities will Inflexible or slow processes 42% Nurture an agile culture Lack of collaboartion between IT and give them a 35% distinct and workplace against the business advantage. backdrop of market and What’s stalling digital transformation efforts? Source: The State of Business Agility, CA Technologies, 2017 digital transformation. Source: Global Digital IQ Survey, PwC, 2017 Embed agility in the organisation to seize new opportunities and respond © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. to a volatile operating environment. Menu 8
Changing profiles Talent strategy Top approaches to get sufficient talent to of HR professionals say that skills support business strategy: needed for jobs in their organisation are changing. 65% 59% Source: Resourcing and Talent Planning Survey, CIPD / Hays, 2017 52% 51% Rethinking skills base and profiles Retrain or redesign of companies will either retrain people to use technology or will Develop and Recruit new Hire contractors redesign jobs to better take Adapting team 77% advantage of human skills. train existing employees and consultants employees competencies to meet Source: Global Human Capital Trends, Source: Digital Business Global Executive Study, future CRE challenges. Deloitte, 2017 Deloitte, 2017 Consider new and atypical profiles to drive the future of your © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. organisation and enhance CRE performance. Menu 9
Current state Desired state Only about 9.5% of today’s workforce is covered by any Switching off and Happiness at work kind of workplace wellness programs or services. meditation Source: Global Wellness Economy Monitor, GWI, 2017 According to WHO, by 2030 the largest health risk on earth 25% 69% will be depression. The global economic impact of mental health is estimated at US$ 1 trillion per year in lost productivity. Q: What criteria would give you the feeling of having a unique experience of work? Source: Global Wellness Summit, WHO, 2017 Source: Human Experience, JLL 2017 Being in good health as an actively pursued goal Wellness Architecture International Indoor air quality Daylighting Noise and Thermal comfort layout and active and ventilation and lighting acoustics design Support mental and physical health at work by Biophilia and views Look and Location and access Employee to amenities aligning workplace and HR feel engagement strategy. Source: “Building The Business Case: Health, Wellbeing and Productivity in Green Offices”, World Green Building Council, October 2016 Create a new wellness architecture to activate and sustain human experience. © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. Menu 10
Automation Humanisation In the period 2018-2020 the expected Only 22% of executives reported that their annual growth rate of sales in service companies were excellent at building a robots for professional use is expected to differentiated employee experience. Reintroducing the human between 20% and 25%. Source: Digital Mobility | Talent 2017 Trends, factor at the core of the Deloitte, 2017 Source: World Robotics, International Federation of enterprise Robotics 2017 Create workplaces that are people orientated, experiential and personalized. Enhance human experience while building on the potential of © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. automation and digitization. Menu 11
Building trust Impact on employees 61% 58% of CEOs say building greater trust among external report a positive impact on engagement and stakeholders and customers is a top three priority for productivity. A network of their organisation today. Q: Does access to spaces for shared community interests (vegetable interdependent individuals Source: Global CEO Survey, KPMG, 2017 gardens, spaces for artistic expression, spaces for leaving pets, etc.) have an impact on your engagement with the company and productivity? Buildings to become an Source: Human Experience, JLL, 2017 epicentre for communities to share passions, experiences and ideas. Meet community aspirations by seamlessly connecting people and © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. creating comfortable spaces. Menu 12
Act now and don’t be left behind! Dynamic workforce Flexspace Innovation culture Digital drive Smart real estate Adopt a user- Incorporate flex- Review innovation Align CRE strategy Deploy emerging smart centric approach to space as a core part infrastructure to foster with enterprise-wide real estate solutions to respond to a of workplace and hyper-collaboration digital optimise user-experience dynamic workforce. portfolio strategy. within and outside the transformation. and enhance enterprise organization. performance. Adaptive organisation Future skilling Wellness Humanisation Community Embed agility in the Consider new and Enhance human Meet community Create a new organisation to seize atypical profiles to experience while aspirations by wellness architecture new opportunities and drive the future of building on the potential seamlessly connecting to activate and sustain respond to a volatile your organisation of automation and people and creating human experience. operating environment. and enhance CRE digitization. comfortable spaces. performance.
Contact Marie Puybaraud, PhD Global Head of Research JLL Corporate Solutions Mob : +33 (0) 632 879 748 Marie.puybaraud@eu.jll.com www.futureofwork.jll www.humanexperience.jll WEF 2018 – The Future of Workplace http://www.jll.com/Documents/JLL_Future_Of_Workplace_Human_Experience_1.pdf © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. 13
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof.
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