Start Now To Plan For The Coming Demographic Shift
November 18, 2013
One of the most effective ways to maximize the productivity of your commercial real estate leasing dollar is to carefully plan and project your space needs over a defined time frame. I recommend that my clients plan ahead for three to eight years
Between now and 2020, there will be an important demographic shift that will affect how companies allocate and occupy space. Changes related to that trend will be magnified by the increasing flexibility that technology affords, and by increased competition for skilled talent that will occur as the Baby Boomer generation exits the workplace.
Currently, the labor force is dominated by Baby Boomers (born between 1946 and 1964) and Generation X (born between 1965 and 1980). Between now and the end of this decade, Boomers will exit the workplace and Gen X and the Millenials (born between 1981 and 2000) will replace them. Each one of those demographic groups has a particular set of expectations about their work environment.
So, what does this mean for your real estate plan?
The Baby Boomer generation entered the workforce in the 1970’s and 1980’s when there was an expectation that career success would lead to the proverbial corner office. Changes in the economy and the workplace today make this unlikely. While there may be significant perks related to achieving senior status, only proving a true business need will result in a large private office.
Increasingly, firms today allocate office space based on work to be accomplished rather than as a reward for seniority. As the Boomer generation exits the workplace (10,000 retire each day), the current trend toward more flexible and less hierarchal office space will accelerate.
The retirement of Baby Boomers will cause a labor shortage as the economy continues to improve. Many of the workers will be temporary and contract workers, rather than traditional full time employees. The toughest recruitment challenge is for highly skilled tech workers, and companies are finding that adapting to generational work preferences can help attract vitally needed talent.
Gen Xers in the workplace tend to be independent, and appreciate flexibility in the workplace. Corporate responsibility is important to them. Millenials seek work/life balance and have a preference for freelancing and contracting. Both of these groups embrace sustainability. How a company manages it corporate real estate can be an important factor in creating a workplace that is desirable to the rising generation of highly skilled workers.
Have you considered how your workforce will change between now and 2020?
< Return to News