Of­fice-based em­ploy­ment on the rise

Financial Mirror (Cyprus) - - FRONT PAGE -

2016 could be the first year that Euro­pean of­fice em­ploy­ment lev­els sur­pass the pre­vi­ous peak of 2008, ac­cord­ing to Col­liers In­ter­na­tional’s lat­est re­search ‘ EMEA Of­fices: Is Flex­i­bil­ity the Fu­ture?’

The re­port shows that of­fice-based em­ploy­ment lev­els in the EU have grown by 5 mil­lion, rep­re­sent­ing a 4.3% in­crease over the last ten years and sur­pass­ing the pre­vi­ous peak of 2008. This may seem low, but tak­ing into ac­count the sig­nif­i­cant im­pacts of out­sourc­ing and off­shoring, the global fi­nan­cial cri­sis from 2008 to 2012, and the im­pact of aus­ter­ity on both the pub­lic and pri­vate sec­tors, the out­look for of­fice em­ploy­ment in the EU is ac­tu­ally a pos­i­tive one.

The re­search shows the ex­tent to which out­sourc­ing of ser­vices has had a pos­i­tive im­pact on cer­tain ar­eas of the EU, in­clud­ing south­east­ern Europe, cen­tral Europe, cen­tral and east­ern Europe and the Baltics, which all re­ported growth of be­tween 6 and 15%, al­beit off a low base. The re­port also high­lights that the UK and Ire­land have seen sig­nif­i­cant growth in of­fice-based em­ploy­ment in the last ten years, re­port­ing a 9.8% in­crease be­tween 2005 and 2015.

This growth has been driven by the abil­ity of th­ese lib­eral economies to re­act to change, re-bal­ance and at­tract pri­vate sec­tor in­vest­ment. It also re­flects their more flex­i­ble ap­proach to em­ploy­ment, with both con­trac­tual and self-em­ploy­ment in­creas­ing post global fi­nan­cial cri­sis in or­der to help spark an in­crease in em­ploy­ment. There has also been pos­i­tive growth in the Nordics for sim­i­lar rea­sons, with the tech sec­tor play­ing a ma­jor part in the trans­for­ma­tion of th­ese mar­kets.

How­ever, the re­port clearly shows that there are win­ners and losers in the EU when it comes to em­ploy­ment growth. Ger­many has re­cov­ered but has been held back by a lack of ca­pac­ity in the labour force. Whilst France is in a sim­i­lar muted growth po­si­tion, but has been held back fur­ther by an in­abil­ity to in­crease flex­i­bil­ity into em­ploy­ment. On the other hand, in West­ern Europe growth has been far more muted, show­ing only a 1.8% in­crease in of­fice-based em­ploy­ment.

And in south­ern Europe, there has been neg­a­tive of­fice­based jobs growth since 2005, with a de­crease of 4.6%.

Specif­i­cally, Spain and Italy have been ham­strung by re­stric­tive and in­flex­i­ble labour laws and both of th­ese ma­jor economies, along­side smaller economies of Por­tu­gal and Greece have youth un­em­ploy­ment rates above 40%. The good news how­ever is that, due to reg­u­la­tory re­forms mak­ing it eas­ier for firms to op­er­ate more flex­i­bly, a turn­around for th­ese south­ern Euro­pean coun­ties is in the off­ing.

When it comes to the of­fice mar­ket, while pri­vate-sec­tor, of­fice based jobs growth will drive a con­tin­ual need for ded­i­cated of­fice space, the na­ture of many of­fice-based jobs points to an in­creas­ingly flex­i­ble use of space.

As a large num­ber of mar­kets look ready for some ma­jor space-sav­ing in the fore­see­able fu­ture, they are turn­ing to share-de­sk­ing in or­der to lower space re­quire­ments of ap­prox­i­mately 10 sqm per workspace. If this space ra­tio be­comes the norm, then al­most all mar­kets will be im­pacted cre­at­ing on the one hand in­creased flex­i­bil­ity, while on the other ten­ants will still be pay­ing for re­dun­dant space or space that they wouldn’t be able to im­me­di­ately sub-let.

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