Locations That Promote Employee Health and Well-Being Coming to the Forefront
As workforce location preferences have evolved over decades, one thing has remained constant: individuals want to work and live in locations that foster their physical as well as mental and emotional health.
A focus on wellness in the workplace has become not just a “nice to have,” but a necessity to keep employees safe and healthy, and to enhance human performance. Health and well-being are among the new employee priorities that are now equal to — if not more important than — compensation as motivations for working for an organization. What happens inside the office is important — but outdoor air quality, community values, access to nature, and general quality of life are beginning to matter as well for the next generation workforce.
The Broader Meaning of Wellness
Health — encompassing physical, social, and mental well-being — has become employees’ third-highest priority in the workplace, according to JLL’s June 2021 Workforce Barometer survey. In a September 2021 survey focused on well-being, JLL research found respondents are increasingly holding their employers to a higher standard across all areas of wellness, with 75 percent saying they expect to feel safe at work, whether that means employers providing advanced hygiene protocols and flu shots or allowing employees to express their difficulties in managing their workload or other stress.
Wellness in all its dimensions has become a critical factor in talent recruitment and retention. The concept of wellness has shifted from a focus on physical well-being, achieved through exercise and nutrition, to something broader and more inclusive of how people think and feel. Wellness encompasses nearly anything that promotes physical, mental, spiritual or emotional health and well-being including happiness — or merely good feelings.
Shifting Location Strategies
With the shortage of talent in so many industry sectors, location strategy in recent years has been tilting toward the needs, preferences, and availability of the workforce. Offices have evolved — or should evolve — to more closely address worker needs, desired amenities, and preferences.
Health and well-being are among the new employee priorities that are now equal to — if not more important than — compensation. Location preferences for corporate offices have been shifting as companies seek to balance the cost and quality of the real estate in a particular location and its convenience, safety, and proximity to talent, customers, and jobs. In the United States, for example, office location preferences have shifted from central business districts (CBDs) to the suburbs and then back again over decades, as employers have responded to demographic change and lifestyle preferences.
Earlier in the 20th century, CBDs were the primary focus for offices. By 1960, the interstate system had opened the suburbs to urban workers, allowing them easy access to affordable and spacious housing, green space, and safety. Suburbia created a compelling value proposition for aspiring families throughout the 1970s and 1980s. Employers soon followed, establishing corporate campus settings within easy drives to convenient suburban locations, often near highway interchanges.
The preference for the suburbs persisted until the 1990s and 2000s, when enterprising mayors and civic organizations revitalized urban areas with 24/7 amenities and a greater sense of safety. Cities and urban centers once again became attractive to residents and employees, especially younger generations looking for a dynamic urban environment, cultural amenities, the convenience of public transportation, and a compact, high-density, live-work-play environment.
Quality of Life Rising in Importance as Site Selection Factor
Now, the value equation is shifting again. Urban environments and big gateway cities have grown increasingly expensive, with housing costs rising more quickly than the wages of the average worker. While many predicted the pandemic would be a death knell for cities, the population shifts haven’t backed up the rhetoric.
More than a few workers left and relocated temporarily from crowded cities and urban centers to work in less densely populated areas during the past 18 months, but workforce migration overall is more nuanced and complex than the headlines, with implications for all types of communities — cities, suburbs, and rural.
Only 8 percent of Americans — 26.5 million people — moved from one U.S. home to another between March 2020 and March 2021, according to data from the Census Bureau’s Current Population Survey. And though a declining share of Americans say they want to live in cities, fewer people moved out of them last year than in the period before the COVID-19 pandemic began. Where these folks did move from city centers to more rural areas, they contributed to rising home prices that make once-affordable areas out of reach for many buyers.
While many predicted the pandemic would be a death knell for cities, the population shifts haven’t backed up the rhetoric. Rather than thinking merely in terms of migration, workforce location must account for mobility, with some segment of the population relocating temporarily to a vacation home or mountain retreat before returning to the city center or suburban home base. While this trend is limited to high earners and those in control of their workdays, it nevertheless has implications for every area of the country and beyond.
These evolving demographic and workforce migration trends over the past two years have corresponded with the escalating war for talent and the need to choose locations where employees will want to go to live and stay. Talent availability and cost continue to be dominant factors for corporate site selectors, but, during the past decade, “quality of life” has been steadily rising in importance in Area Development’s annual Corporate Survey. In 2021, quality of life was ranked as the fourth most important site selection factor in the survey.
Of course, quality-of-life issues typically have a much greater impact on projects that need to attract certain types of employees, such as highly educated, specialized talent and “digital” tech talent. As an example, companies planning information technology, life sciences, research and development, and corporate headquarters projects tend to rank quality-of-life issues higher on the list of site selection factors than those planning other types of location projects. For companies in need of in-demand knowledge workers, talent recruitment may be a national endeavor, and quality of life may directly impact an organization’s recruitment success within a given specific geography. When talent can theoretically work anywhere, employers must provide a draw that not only brings people to a company but to a specific work location.
Health and Wellness Implications
Of course, quality of life or quality of place are subjective, encompassing any number of characteristics. Key attributes for a high quality-of-life ranking include high-performing schools (public, private, and post-secondary), affordable housing in a variety of good neighborhoods, efficient public transportation, short commute times, low crime rates, high-quality healthcare, spousal career employment opportunities, and competitive childcare costs. A good balance of lifestyle amenities — shopping, entertainment, sports, weather, alternative employment opportunities — is also highly regarded. The cost of healthcare may also be an important consideration, given that healthcare costs nationwide continue to rise more quickly than the general cost of living.
Quality of life is even more important when some workers theoretically can work from wherever they choose to live — even though many companies prefer hybrid work strategies that bring employees to the office at least some of the time. Some economic development agencies are even offering incentives for companies that create remote jobs in local communities, regardless of whether the corporate headquarters remains located in a distant market.
Evolving demographic and workforce migration trends have corresponded with the escalating war for talent and the need to choose locations where employees will want to go to live and stay. Whatever the interpretation, companies increasingly view quality of life and quality of place from the perspective of culture and values. That is, a company that values employee needs and preferences will consider whether current employees would want to relocate to a prospective new community, and whether the community is doing a good job of retaining or expanding its population of talented professionals. In industries with tight labor markets, access to parks, beaches, and mountains and availability of well-being resources, for example, can make a difference to workers and site selectors, too.
How Quality-of-Life Trends Are Playing Out
With the combination of the natural aging progression of the giant millennial generation beginning to create new households and families, and the newfound flexibility of remote work and hybrid working, Sun Belt cities and suburban environments are seeing growing popularity. Over the past 18 to 20 months, Sun Belt and suburban markets outperformed traditional CBDs in terms of commercial real estate rents and occupancy during the course of the pandemic.
Many of these new growth markets have benefited from demographic tail winds and quality-of-life advantages that suggest they may continue to prosper — unless climate change undermines the desirability of these areas. As the pandemic evolves and climate change impacts continue, it will be important for organizations and site selectors to bear in mind that well-being is dynamic, and the needs of employees are constantly fluctuating because of their life experiences and due to evolving workforce demographic changes over time. As the war for talent becomes ever more competitive thanks to the looming “sansdemic,” choosing locations and delivering environments that foster mental, physical, and social well-being will likely become more important in the coming years to attract the workforce of the future.
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