How Demographic Shifts Will Impact the Global Workplace by 2030

How Demographic Shifts Will Impact the Global Workplace by 2030

New Opportunities and Challenges Arise for Global Cities as 693 Million Boomers Reach Retirement Age and 1.3 Billion Gen Z Set to Enter Workforce


The retirement of Baby Boomers and the debut of Generation Z workers, along with other demographic shifts, has major implications for real estate occupiers, investors and policy-makers around the world according to a new global research report from Cushman & Wakefield (NYSE: CWK). All stakeholders need to understand the impacts of these trends and how to position themselves to maximise opportunities.

Entitled “Demographic Shifts: The World in 2030”, the report analyses the seismic shifts in workforces worldwide as 693 million Baby Boomers reach retirement age and 1.3 billion members of Gen Z enter the labour force over the next 10 years.

 

BIRTH YEAR

AGE IN 2019

AGE IN 2030

GENERATION LENGTH

Baby Boomers

1946 - 1964

55 - 73

66 - 84

19 years

Generation X

1965 - 1980

39 - 54

50 - 65

16 years

Generation Y /
Millennial

1981 - 1996

23 - 38

34 - 49

16 years

Generation Z

1997 - 2012

7 - 22

18 - 33

16 years

Source: Pew Research Center, Cushman & Wakefield

 

Proportion of working age1 population 2000-20301

 

Структура трудоспособного населения 2000-2030

Source: United Nations, Cushman & Wakefield
* Generation Alpha: Born from 2013 to present
** Silent Generation: Born from 1928 - 1945
1 Working age population defined here as aged 15-64 years

 

The report looks at the different approaches to work and lifestyle taken by Baby Boomers, Millennials and Gen Z around the world, and the impact on the world’s cities over the next decade as one generation exits the workforce and another enters.

“These demographic trends will drive the pace of growth in cities around the world,” said Dr. Dominic Brown, report author and Head of Insight & Analysis, Asia Pacific at Cushman & Wakefield. “Cities will need to establish themselves as ‘places’ to attract the highest quality workers and in turn create the greatest real estate opportunities for occupiers and investors alike.”

In European cities flexible working is now commonplace, and the number of people who work from home or a different location, outside the traditional office, is increasing. People who live outside the City often work from home to avoid a lengthy commute and achieve a better work / life balance, but increasingly they are also seeking to reduce their carbon footprint. This means the volume of office space employers need to provide is falling. However, and this will be particularly true for Gen Z as they enter the workforce, that space needs to be geared towards social interactions and face-to-face meetings with colleagues to be attractive.

Victoria Goroulko, Head of Global Office Occupier Services, at Cushman & Wakefield in Ukraine, said: “Changing demographics are important to our corporate clients in London as they pursue more dynamic workplace strategies to cater to a multi-generational workforce.

“The days of coming into the office to be told what to do and have your work monitored are dead. However, we still believe our corporate clients can benefit from a combined workforce, with both more experienced and Gen Z workers learning from one another, with high quality meeting spaces to help facilitate mentoring and training. It is important to acknowledge that as the world of work changes it has the capacity to impact everyone right from new entrants into the world of work to experienced professionals.

“On the investor side, clients need to understand the factors that will drive the demand for various property types, such as the number of new workers and/or recent retirees in the market.”

 

Generation Y

Flexibility and vast, largely untapped repositories of data have already started to unsettle traditional office dynamics. In Sydney, coworking already accounts for around 25% of the sub-3,500-square-feet lease market, while in New York, coworking accounts for 15% of leases between 50,000 and 100,000 square feet. More widely, increased densification is also creating increased wear and tear on buildings and their systems, as well as driving the need for more innovative space solutions with better amenities.

Recent analysis suggests that 50% of Millennials prefer to work remotely for at least one day a week. The other half prefer to work in a workplace full-time. In other words, most Millennials still want to work in an office at least some of the time.

 

Shift in Millennial office flexibility

Изменение предпочтений миллениалов касательно удаленной работы

Source: American Time-use Survey (BLS), Cushman & Wakefield, United Nations

 

Accordingly, the concept of the workplace is likely to become more fleeting and will need to cater to an evergreater number and diverse range of uses and users. We are already seeing this with the growth of collaboration spaces, quiet-zones and lounge areas blurring the livework line.

For a generation that already reports difficulties in balancing work and life, expect the need for even greater flexibility to continue as more Millennials become parents. The amenitization of office buildings will evolve, including yet more food and bar concepts, gyms and fitness centers, and childcare facilities. Child-friendly restaurants that meet a growing range of dietary needs, activity-based retail and entertainment that engage Millennials and their children, and fitness concepts that have in-house childcare will be prized.

 

Generation Z

It is too early to know exactly what to expect from the next generation to enter the workforce. However, we do know what they have experienced in their formative years.

Generation Z is considerably less likely than their older colleagues to indicate an interest in entrepreneurship. According to a survey of more than 18,000 Generation Z, Millennial and Generation X students and workers in 19 countries, the youngest respondents (high school students born between 1997 and 2002) were the least likely to indicate they would choose to work for their own business or a start-up if they had to choose for the rest of their career.xv They also appear more financially driven, with ambitions for high salaries, buying their own home and starting a family. Additionally, Generation Z respondents are less likely than early Millennials to indicate they would choose work-life balance over a well-paid job (58% vs. 71%).

 

"I would prefer work life balance over a well-paid job"

 

Я бы предпочел баланс между личной жизнью и работой, чем высокооплачиваемую работу

 

 

 

 

 

 

 

Source: Adapted from Deloitte

 

Generation Z is the first generation to live their entire lives in a digital world. Having grown up surrounded by the internet, eCommerce, smart phones and social media, these young graduates will enter the workplace with a “phigital lens”—the experience that all of life is both physical and digital. The workplace will need to continue to adapt to keep up with these expectations – expect property technology (PropTech) on steroids.

 

GDP growth

Cushman & Wakefield compared labour force growth and GDP growth of more than 137 cities worldwide. Cities with high growth in both categories have the best prospects for strong real estate demand, while slow growth in both categories indicates a lagging market. Cities with faster growth in GDP than in the working-age population are “high productivity” markets that may appeal to investors as they rise up the value proposition. Those with greater growth in labour than GDP are considered “low productivity” markets need to harness that attraction of talent to boost output.

The study concluded that the world’s top-performing cities are located in South East Asia and India, which bodes well for the economic growth and strength of real estate markets in these areas. High productivity cities are located mainly in China. Most cities in Europe and North America – more mature markets – ranked as low productivity or lagging markets for economic and real estate growth and their trajectories need to be assessed accordingly.

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