Is it time for firms to merge real estate and human resources teams?

In the modern business world, the distinction between teams working in the two workplace functions is becoming increasingly blurred.

October 03, 2017

In the vast majority of companies there’s always been a pretty clear distinction between Human Resources and Corporate Real Estate: One looks after people and the other deals with buildings.

Yet in the modern business world, that distinction is becoming increasingly blurred. Take Google, which is known for turning established thinking on its head when it comes to workplace design and policies. Its new £1 billion London campus features sports facilities some gyms can only dream of with a rooftop running track and a half Olympic sized swimming pool which act as a prime attraction for recruiting new talent, not to mention retaining existing employees.

“Google’s high-end facilities are a physical demonstration that the organization is focused on looking after its staff,” says Dr Marie Puybaraud, Global Head of Workplace Research at JLL. “Job-seekers will start to see such facilities as a benchmark —and all employers will put greater thought into how they use the quality of life at work as a way or recruiting and motivating staff.”

Fellow tech giant Facebook is another case study in how HR and Real Estate are increasingly working together. Its corporate village will include 1,500 apartments as well as a grocery store and offices. “The company is using its physical facilities to provide for its staff in ways which clearly go far deeper than the normal working relationship,” explains Puybaraud. “It is only when Real Estate and HR work seamlessly together that they can deliver such projects.”

Indeed, real estate teams suggesting such recreational facilities may well struggle to get them past the board without the backing of their HR colleagues. Equally, HR teams may be looking for new ways to increase engagement among staff yet may struggle with the practicalities of developing ambitious plans that require a rethink of current office space while working in a silo.

Learning from the tech giants

While few companies have comparable resourcing to that available to HR and Real Estate teams Google and Facebook have, there are nevertheless valuable lessons to be learned from their strategic thinking. “You do not need to build a swimming pool to win the hearts of your staff,” says Puybaraud. “But you do need to recognise that the quality of human experience is the main factor now determining the shape of the work environment in the most successful organisations.”

If staff are more engaged and fulfilled at work, they’re more likely to develop better relationships with colleagues and put more into their work. For companies, it equates to better productivity and lower turnover of staff.

Puybaraud believes it’s a key reason why more companies will merge their HR and Real Estate teams in the coming years. “More businesses will realise how closely productivity follows on from deep level employee satisfaction. We predict that joint HR / Real Estate teams will be commonplace within a decade.”

Indeed, some companies are already taking significant steps to align the two functions. ConocoPhillips, Qualcomm and Chevron are just a few of the big name companies where employees in HR and Real Estate teams report to the same person. The skillset of these combined teams have the potential to make a big difference to how organisations think about their employees and the type of workplaces they create.

“Management teams which fuse HR and Real Estate will include more people who specialize in motivation and engagement issues,” Puybaraud concludes. “The solutions they come up with will not include a running track in most cases. But they will involve finding out how workplace design stimulates the kind of people their organization seeks to recruit.”

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