The race for talent is increasingly influencing where companies choose to expand, hire, and invest.
New research from Savills suggests businesses are placing greater emphasis on workforce availability as demographic changes, housing affordability challenges, and rising demand for AI-related skills alter labor markets around the world.
For decades, office location strategies centered on access to customers, capital, and transportation networks. Today, many employers are weighing a different question: where can they find and keep the workers they need?
Talent Concerns Push Companies Beyond Traditional Hubs
The shift comes as employers face persistent hiring challenges. Savills points to labor shortages across many advanced economies, driven by aging populations, lower birth rates, and growing retirement rates.
Those pressures are prompting some companies to look beyond traditional business centers for future growth.
While cities such as London, New York, Paris, and Tokyo remain critical for headquarters and client-facing operations, rising labor costs and competition for skilled workers are encouraging employers to spread more functions across alternative locations.
The report shows growing interest in cities with expanding talent pools and lower operating costs, particularly in India, Southeast Asia, and parts of North America.
Housing Costs Are Becoming a Workforce Issue
The research also points to housing affordability as an increasingly important business consideration.
In many major cities, housing costs have climbed faster than incomes, creating challenges for recruitment and retention. As a result, companies are paying closer attention to locations that offer a stronger balance between career opportunities, living costs, and quality of life.
That dynamic is helping boost the appeal of cities that were once viewed as secondary markets.
AI Is Adding New Pressure to Location Decisions
Demand for specialized AI, software, and technical talent is further accelerating the trend.
As organizations compete for a limited pool of highly skilled workers, access to talent is becoming a strategic advantage rather than simply a human resources concern.
Savills argues that workforce considerations are now playing a larger role in corporate real estate decisions, with companies increasingly evaluating locations based on long-term talent access, workforce sustainability, and resilience.
The findings suggest that future office footprints may be shaped less by geography and more by where skilled workers choose to live and build careers.
