HR Has Forgotten Where Work Happens: How to Reunite HR and Real Estate Around Work Experiences

Key Takeaways

• HR often overlooks physical workspace in AI‑focused strategies
• Real Estate accounts for second‑largest cost after compensation
• Engagement surveys miss critical data on seat availability and tech
• Lloyds’ Chief People & Places role integrates people, place, digital
• CHROs should embed CRE data in people‑analytics for better decisions

Pulse Analysis

The post‑pandemic era has seen HR departments double‑down on AI‑driven talent models, skills‑based hiring and flexible work policies. While these initiatives promise agility, they frequently sideline the physical environment that shapes daily employee interactions. Corporate real‑estate, typically the second‑largest expense after payroll, often reports to finance, procurement or legal, leaving it out of strategic HR conversations. This structural disconnect means that decisions about office footprints, hybrid schedules, and technology investments are made without a full picture of how space influences productivity and engagement.

Data silos exacerbate the problem. People‑analytics teams rely heavily on engagement surveys, which capture sentiment but omit granular insights such as seat availability, meeting‑room technology performance, or whether a space supports collaborative work. Without spatial data, organizations risk over‑investing in office redesigns that do not align with talent needs. Lloyds Banking Group offers a counterexample: its Chief People & Places Officer treats the built environment as a core component of the employee experience, measuring and optimizing it alongside talent metrics. This integrated approach demonstrates how aligning HR and real‑estate can become a measurable lever for high performance.

To bridge the gap, CHROs should start by mining existing data for location‑specific trends, invite real‑estate leaders into people‑experience strategy sessions, and clearly define the scope of employee‑experience ownership. Creating a product‑led “work experience” function—whether under a new Chief of Work or within a people‑and‑places team—ensures that spatial, digital and people data converge. Such coordination not only improves decision‑making around office footprints but also enhances talent attraction, retention, and overall organizational agility in an increasingly fluid work landscape.