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he International Development Research Council’s Annual Survey of Corporate Real Estate Practices is a one-of-a-kind resource for tracking corporate real estate and facility management trends. Since first conducted in 1993, the survey has provided insights into how these corporate functions and their service providers operate.
Here’s a survey nugget for CREM technophiles. According to the latest survey report, respondents have become far less confident the Internet will “dramatically influence corporate real estate.” The report characterizes their overall feeling as “unsure.” These conclusions suggest a backlash against what technology pundits promised would transform the function. We can only guess what’s behind the data. Disappointment with Internet tools they’ve tried? Disillusionment with hucksterism? The answers await a yet-to-be-defined follow-up project.
With respect to staffing, the survey finds the ratio of corporate employees per CREM employee has fallen over the past nine years, ranging from a high of 1,082 in 1993 to a low of 238 in 2000. The authors don’t hazard a guess why. During the wild and crazy ’90s, many, if not most, corporate payrolls grew. So, in general, to push down the ratio of corporate headcount per CREM employee, companies would have had to add CREM staff at a faster rate than they added overall staff. If this were so, it would be a tribute to the decades-long efforts of organizations like IDRC and NACORE, soon to merge into CoreNet Global, to gain corporate recognition for CREM’s value to the company.
With respect to corporate investment in CREM, the survey shows the share of property in annual operating costs edged up through much of the 1990s, stabilizing late in the decade and for 2001 (applying a three-year moving average to the data makes this observation crystal clear). This ratio hit a low of nine percent in 1993 and 1995 and a high of 28 percent in 1999. The authors offer no explanation. But if the share of property in operating costs did rise coincident with the business cycle’s up-slope, this documents an important dynamic relationship about how business employs property and workplace in an expansion. The rising of this ratio is consistent with the suspected fast growth of CREM headcount: as property costs rise in proportion to total costs, more CREM personnel are required to manage property affairs.
With respect to CREM objectives, “minimize operating expense” and “meet the workplace needs of business growth” tied for top honors. The workplace theme also came up when respondents were asked to identify corporate real estate’s organizational role; for this most picked “to provide appropriate working environments for the least overall cost.” CREM’s objectives and role determine the knowledge and skills needed by the function’s personnel. “Strategic planning” was the top-rated skill for 2001. This squares with the recently completed IDRC Education-Needs Assessment, which found strategic planning to be the top member training need.
EDITOR’S NOTE: This survey began in 1993 as the brainchild of Prof. Ranko Bon of the University of Reading. With years of teaching experience in the U.S. and Great Britain, he knew that his and other academics’ research needed direct input from a broad-brush survey of corporate real estate practitioners. But nothing like this existed. Bon took on the challenge with some help from IDRC and NACORE. Soon, to keep the survey alive he
enlisted the help of Johnson Controls Inc., which assigned researcher Dr. Barry Varcoe to the project and committed some funding as well. This is where the survey stands today. Bon and Varcoe deserve high credit for creating and sustaining this valuable research tool. Companies or individuals interested in continuing this kind of researching by contributing to the annual survey funding may contact Joel Parker of the IDRC staff at 770-446-6996.