ARE YOU UNDERSTAFFED?
Eric Bowles knows from understaffed. No, no. As vice president and director of research for Atlanta-based CoreNet Global, Bowles recently completed the organization's most recent study, "Corporate Real Estate Trends in Organizational Structure," a look at the staffing and structural changes that have taken place in corporate real estate departments of late. And he's not surprised at the results of last week's Quick Poll, which revealed that 74% of our corporate real estate respondents are understaffed. Only 26% said that their people "were tripping over" each other. Here's what Bowles thinks of the trend:
"The results don't surprise me, for two reasons. Real estate, like so many other departments, is being asked to do more with less, and doing more with less means everyone is running short-staffed. There are things you've done in the past that you would like to do or are important to do that you're simply not going to get to.
"On top of that, the business environment today has a high degree of change--change to move faster than ever before and to deal with things that are unexpected. And when you have a high degree of change, it takes incremental resources to manage that change, to work through it, and in a short-staffed environment that's hard.
"Service is at risk and certainly some companies will struggle to handle the needs of their clients, whether they're internal or external. But this connects with another trend and that's the trend toward outsourcing. We're seeing virtually all large companies outsourcing some of their real estate functions. It could be as small as maintaining their buildings, but there are an increasing number of companies that are outsourcing a very large percentages of all real estate activities. Only a few are outsourcing strategy, but there are many that are outsourcing a large amount of tasks. The pressure of being understaffed reflects a changing business model, from an internal to an external model.
"In this desire to drive down cost, you can drive things too far. For example, the organization that's trying to drive down cost is going to outsource and cut the costs paid to their partners as much as they can--standardize processes and make it really lean. By definition, that means you have no time to do anything else. If one additional task comes on the table, unless it's within the scope of the current contract, you don't have time for it.
"The situation isn't unique to corporate real estate. In most companies and most departments--IT, HR, finance--people are going to complain consistently that they're understaffed; nobody is saying they've got too much staff. It's going to be the mantra of the future.
"But look at the productivity gains we've had across the board, not just in real estate. Some of that comes because we're understaffed, so, to some extent it's a good thing. It's when it starts breaking--when you start having errors or can't deliver the quality of service that's necessary at the most basic level--that's when you've gone too far. We might be testing the edges of that right now in corporate real estate, although I think it's a growth period. Give the industry time to digest this and they will make significant progress."
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
