Expanding the CRE Charter?

In my last Blog entry I discussed the future of the corporate real estate profession. The central role of the corporate real estate executive has been to manage the company’s real estate portfolio including property acquisition, disposition, leasing, and the day to day operations of facility management. For some large companies, the charter of CRE has expanded to include physical security, sustainability, and now even the charter may include company wellness programs. In an open online survey conducted by CoreNet Global, a strong majority of respondents – 80 percent -- said that corporate wellness initiatives represent a "significant trend," while only 20 percent said that they were a "passing fad."

And, more than 62 percent reported that their companies had instituted wellness initiatives in the last six months; 38 percent said that they had not.

And my recent dinner meeting with a group of CRE leaders reinforced this interest, where it was the main agenda item.

With intense competition for talented employees, it ‘s likely that companies would institute programs that would support the health and well being of their employees. These programs typically would include smoking cessation training, substance abuse, physical fitness facilities, company sponsored events such as road races, and other activities that add to the employee’s physical fitness. Some wellness programs also provide counseling, yoga, and other activities that address the mental as well as physical health of the employee.

Wellness programs result in healthier employees, reduced absenteeism, and higher productivity. There is substantial evidence that wellness results in improved employee recruitment and retention, and improved financial performance.

From my experience, a company wellness program is best managed by the human resources organization. There is most likely a manager or executive responsible for the program who reports into the human resourcesdepartmentand may have counterparts in the operating divisions that oversee local wellness initiatives.

But what is the role of the CRE organization in company wellness? Most likely, CRE management would serve in a support role, particularly in managing the facilities needed for employee wellness activities. These would include the provision of physical fitness facilities, the contracting with local health clubs, and possibly the contracting with consultants that would serve as on site coaches or counselors.

There are certainly examples where the CRE organization has direct responsibility for company wellness, but this would be the exception. The CRE organization is better aligned with sustainability initiatives such as energy management, and environmentally oriented construction such as the LEED (leadership in energy and environmental design) standard.       

Another area of focus that is closely aligned with the CRE mission is physical security. This would include the development of physical security standards for company facilities as well as the provision of security technologies such as card reading devices, closed circuit TV monitoring, and perimeter alarm systems.

The CRE department is already challenged to meet disruptive changes in the real estate market, the most urgent example is the imminent change in FASB/IASB leasing standards. As the economy goes through a possible downturn in the months ahead, there will be a significant demand to rebalance the company portfolio through subleasing and dispositions. My advice to CRE managers is to maintain your current charter, and decline efforts to add to your responsibilities such as company wellness initiatives at least in the near term. While a popular trend, company wellness is best managed by those responsible for employee recruitment and retention.