Even small improvements in the physical environment of a workplace can reap significant benefits in terms of productivity, says ELOISE HERON.
There has been a longstanding perception that a ‘green’ building is desirable in terms of the reduced cost of running that building, and the positive perception that occupying that building has for the occupier, or indeed to the landlord/owner. Many may believe that the savings in heating, cooling and possibly lighting the building would be the leading factor that would encourage an occupier to buy or rent this property; however, and perhaps surprisingly, staff costs, including salaries and benefits, typically account for around 90% of a business’s operating costs, and the building that its staff occupies significantly affects how productive that member of staff is to the company.
What can appear to be a modest improvement in employee health or productivity can have a huge financial implication for employers – one that is much larger than any other practical financial saving associated with running an efficiently designed and operated building.
The World Green Building Council recently carried out extensive research into the issue of how much money a ‘green’ building can save a company in terms of the increased productivity of its staff if they work in a comfortable ambient environment. They also carried out research as to how a company can create a simple framework to enable it to link company financial issues (such as absence rates, staff turnover and medical complaints) to the physical features of the building it occupies.
By encouraging businesses to make the link between these two issues in their own buildings, the World Green Building Council hopes to encourage businesses to make the issue meaningful, personal and transparent, and that businesses will start to see financial reasons to move towards greening its workplaces. The report focuses only on new and existing offices. It presents overwhelming evidence, which demonstrates that the design of an office impacts on the health, well-being and productivity of its occupants.
Small differences can have a large effect. What may appear to be a small improvement in employee productivity can have a significant financial implication for employers. Because an employer’s average costs are driven primarily by staff costs, then small changes in staff productivity can have a large knock-on effect on the profits of that business. Figure 1 illustrates the impact that a 10% variation in staff costs has on a typical business’s total operating costs.
The office environment is made up of several factors, which can be measured or evaluated in numerous ways. Some of these ways are noted in Table 1, with the primary findings of the World Green Building Council’s research stated immediately after each factor.
So how can employers measure these impacts and measure the improvements?
Employers can measure these factors by collecting simple data, such as:
- Financial (absenteeism/staff turnover/medical complaints). Most of this data is already to hand within HR/FM departments. Why are your staff reporting absences? Is there excessive ‘churn’ among your employees?
- Perceptual (how do your staff feel about their workplace?). Ask your staff. The answers can provide a wealth of information for improving office performance. Sample surveys are provided within the study.
- Physical (how does your office perform?). Gather information, which can be done with new exciting wearable technology/checking the temperature of the office or gaining external support (Figure 2).
Where these three areas overlap is where there is real opportunity. There is no ‘magic formula’ for ‘proving’ the business case. What the report demonstrates is that there is clearly an impact on the productivity of staff caused by the building they work in, and there are tools available to analyse this, and make the changes to increase productivity to the company in a fairly significant way.
MSc BSc (Surv) MSCSI MRICS
Eloise is an Associate Director in TWM, focusing on valuations and advisory services.