Why a Global Operating Model is a key priority for office occupiers in today's world

Recently, at CoreNet Global’s North American Summit in Anaheim California - a gathering of over 1500 corporate real estate professionals from around the world - we talked about the importance of Global Capabilities Centres (GCCs) in corporate real estate planning and operations. These branches of multinational companies, typically located in lower-cost countries, are being established to perform a range of business functions. The discussion was informed by a recent Savills research collaboration with CoreNet Global that talked about the challenges of talent attraction for multinational corporations and how GCCs are evolving to meet those needs.

For decades, the GCC story in Europe was limited. Poland was by far the preferred location for these ‘back office’ facilities, and the key location driver was the relatively low cost of the country’s real estate and educated workforce. In APAC, India was the GCC epicenter, offering the promise of even greater cost savings – over 70%, when compared to prime locations like New York and London.

Finding the right talent

In the past ten years, and especially in the past five, workforce demographics have changed, along with the shifting priorities of a new generation of workers. Over 30% of the corporate real estate participants in our CoreNet Global onsite survey stated that finding affordable and capable talent is a central priority in location strategy around the world. A more mobile workforce and the increased rent premiums that define prime office locations are shifting the potential role of GCCs. The growing importance of technology and AI adoption is also accelerating the demand for increased corporate performance. As Savills World Research tracks present and future talent hotspots, an alignment is emerging between young tech-savvy workers in secondary markets and the evolution of GCCs into hubs for innovation and talent incubation. GCCs now have to accommodate senior managers who will guide innovation priorities central to corporate identity and profitability, and nurture the talent who are contributing to those goals.

McKinsey defines it as an evolution from a GCC to a GOM - Global Operating Model - which considers a company’s entire talent footprint to decide what should get globally distributed to attract talent, manage risk and optimise performance. In Europe, we have companies looking beyond Poland to locations like Portugal and the Czech Republic. In APAC, India may eventually be challenged by Vietnam and Malaysia, but the adoption of this distributed strategy is uneven across the CRE landscape. While 33% of our webinar respondents are planning to increase their investment in GCCs, 30% are holding steady, and 30% have no plans to use them at all.   

Talent attraction and corporate performance are essential factors in location and portfolio strategy for multinationals. Corporates are increasingly developing real estate strategies that reflect a cost-effective, efficient and productive Global Operating Model – no matter what GCC strategy they might have deployed in the past.

Further information

Contact Christina Sigliano

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