What KKR’s New HQ Means for the ‘War’ for Talent
Amid a heated battle for talent retention, the PE giant was looking for ways to keep its employees happy. The result was moving its headquarters in Manhattan and keeping parents and children together on business trips, and others in private real estate and PE are scrambling to keep up.
In looking at where its employees live, then crunching the numbers and realizing that a move across Manhattan would shave minutes off most commutes, KKR opted to move from its current headquarters at 9 W. 57th—the famed Solow Building featured in TV shows and movies—to the trendy Hudson Yards development in far Midtown West.
KKR’s move highlights the issue of finding top talent and keeping them, which was discussed at the recent ULI Real Estate Outlook 2016 conference.
During a panel conversation at the event, Darcy Stacom, a vice chairman and head of the Investment Properties group at CBRE, and Jeff Blau, CEO of Related Companies, discussed challenges facing corporations and how they are starting to view the location of their headquarters as a way to attract and retain existing talent.
According to Stacom and Blau, KKR went through employees’ home addresses comparing the time it would take to commute to its current headquarters versus Hudson Yards. The outcome: average commute times went down by nine minutes per person in the move to Hudson Yards. By making life easier for current or potential employees, the firm is recognizing that attracting the best people is about more than just compensation, the panelists commented.
During the same discussion, Blau said that his company, Related, changed its entire marketing pitch for Hudson Yards, moving away from the use and cost of the space itself.
“We’d get through the real estate people and CEO, but every single time we’d get to the CFO and we’d get blank stares,” Blau said. “So we asked CEOs in NYC what their biggest problem is, and it’s attracting and retaining talent.”
Human resources issues have increasingly been added to the roster of tasks that CFOs are responsible for. In a roundtable conversation, three CFOs from the institutional real estate sector talked about the “war on talent” and how to keep employees excited about how interesting the job is. Darren Berk, CFO at Dune RE Partners, said, “I don’t think just paying people more works.”
KKR has learned the lesson. The firm also announced it would extend paid leave for primary caregivers from 12 weeks to 16 weeks and pay for employees’ children and their caregivers to go along on business trips KKR is not alone in its thinking—a recent article highlighted how employee benefits will change in 2016, and the firm was among those it name-checked as focusing on perks related to education and family leave.
Amid a heated battle for talent retention, KKR was looking for ways to keep its employees happy. The result was moving its headquarters in Manhattan and keeping parents and children together on business trips.