Larry Smith, professor of economics at the University of Waterloo in his TED talk, “Why you will fail to have a great career,” pulls no punches when he calls out the absurd excuses people invent when they fail to pursue their passions. “I just want to be happy,” people say, and Smith finds this rather frustrating.
Happiness is one of many human emotions, but it is not an outcome or a destination. The experience of happiness comes from our actions—happiness is created where there are environments of respect, where we can take responsibility and be resilient. If employees have a sense of purpose, stick at it and work toward something they believe in, then they will be in a vastly different emotional space than just “happy.”
Employers and employees of the future will face an entirely new definition of work if they only strive to make people “happy.” A 2014 Forbes article, Millennials by the Numbers’ showed the following:
64 percent say it’s a priority to make the world a better place
72 percent would like to be their own boss
88 percent prefer a collaborative work-culture
74 percent want flexible schedules
88 percent want “work-live” integration
The 72 percent who say they want to be their own boss are going to have to focus on much more than just being happy. So, listen up future bosses: the future of your organization depends a lot upon the location of the real estate that you choose, because over the next five years, you will be competing for quality employees.
Mark Lautman pointed out a few supporting facts in his article in Area Development Magazine-Workforce 2014:
• Literally everyone who will be hired in the next 25 years has already been born.
• We can track exactly how many there are, where they live, and how many took Algebra II.
• In seven years, 75 million baby boomers will be older than 55. As they bail out of the workforce, there just isn’t going to be enough qualified entrants from the baby-bust generation to replace them.
Lautman writes that this, in effect, creates a zero-sum game, which means that if you need to add qualified employees to survive or grow, you will have to steal them from your competition. A zero-sum game changes everything, because it completely shifts the power in the hiring relationship from employer to employee.
Employers will have to identify how many employees will be lost and recruited away in the next 10 years, and what forces and factors are driving each major source of attrition. They will have to estimate how many employees they can get by promoting from within or by recruiting from outside. This is especially important for companies that need STEM (Science, Technology, Engineering and Math) talent.
Ukrainian physicist Anatoliy Glushenko developed the theory that the only difference between communities and cities that overproduce and underproduce technical talent is when they start teaching physics. Where conceptual physics is taught in 6th, 7th, and 8th grades, and math-based 9th through 12th grade, these communities and schools put STEM students into college and into the local workforce prepared and ready to perform technical work.
To further compound the issue of a chronic labor shortage, it is certain that higher wages will follow job growth, especially for the STEM employees. Robert A. Dye, chief economist for Comerica Bank, predicts “very tight” unemployment rates in Texas in 2015 and 2016—unless there is stronger in-migration to Texas from other states. He reports that:
• Wages and salaries for Dallas-Fort Worth employees rose 4.4 percent over the 12 months ending June 30, more than double the national growth rate.
• Employment growth typically leads to higher wages and increased inflation.
• Employees have had little negotiating power on wages for a long time.
So what does that mean?
It means that in order to remain competitive, companies will have to find ways to redesign their space to address trends that reduce occupancy costs (such as modular furniture systems, hoteling, etc.) in order to locate in the higher profile locations where employees want to work, but where rental rates are significantly increasing.
In this war for talent, there will be only winners and losers—companies that can grow, attract and retain new qualified employees and those that can’t. Employers will now have to focus on locating their companies in places where employees want to be, and where they want to live and work. Understanding the labor availability in areas where a company needs to hire will be the first step in any real estate decision process.
Employees will have a choice about where they want to work in the next five years, and the location of the real estate will vastly affect that choice.
Susan Arledge, managing principal of Cresa Dallas, exclusively focuses on tenant representation and finding locations for clients that improve productivity and reduce attrition. One of her clients recently stated, “You are either focused or you are not. If you have 10 balls in the air, nine of them are in free fall. Employers will have to make employee retention a major focus and priority.” This, however, is the same client who once sent a thought-provoking email asking, “Why is there a giant eyeball hovering over the pyramid on the dollar bill?” or who whines that the metric system can’t seem to catch on in the states, unless you count the increasing popularity of the nine-millimeter bullet. Only some of his stuff is worth remembering. Contact Susan at [email protected].
