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Linking Building Health to Employee Productivity

Apr 30, 2018 10:49:20 PM

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Employee performance and productivity are critical variables to your company's operating income and profitability. High performance and productivity are facilitated by engagement. Quite simply, engaged employees contribute more to the organization and the bottom line. Commercial real estate firms like Colliers International reinforce that healthy buildings are significant contributors to employee productivity, which has been stagnant in the United States since the Great Recession and is experiencing the lowest annual growth rate since World War II (1.1%), according to the U.S. Bureau of Labor Statistics.

Companies with a majority of highly engaged employees experience nearly 20% improvements in operating income, according to sources compiled by Good.co, such as Gallup, the Society for Human Resource Management (SHRM), Harvard Business Review, Leadership IQ, the Dale Carnegie Institute and Deloitte. Conversely, companies with a majority of disengaged employees typically experience about 30% declines in operating income.

How Should Companies Be Thinking About Productivity and Engagement?

First, we must recognize that productivity is not just defined by efficiency. Productivity includes creativity, innovation and flexibility. Efficiency is a simple measure of work output and hours worked, but it is commonly used to define productivity. Therefore, workforce productivity is commonly understood through the ratio of total output divided by total input. When a company produces $100,000 worth of goods or services (output) in 1,000 labor hours (input), productivity equals $100/hour of work.

As you can see, this is a very simplistic formula that doesn't incorporate the value of creativity, innovation and flexibility that enables company growth, industry breakthroughs or corporate culture advancements. Efficiency can be blind. Actual productivity, which can be difficult to quantify but exponentially more valuable than efficiency, requires engaged employees who collaborate, question and think critically to improve results.

Productivity, as defined by the U.S. Bureau of Labor Statistics, is not a very useful measure of growth outside of pure production operations, such as manufacturing, farming and heavy industry. The average annual growth rate of U.S. GDP since the Great Recession is 2.1% compared to the productivity growth rate of 1.1%, and the technology sector has been ripping at 4% to 5% growth rates over the same time period.

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Commercial real estate, consulting and human resources firms have all been finding that true productivity and growth eminates from collaborative culture, purpose-driven leadership and healthy working environments.

What Helps Employees Become More Productive and Engaged?

Colliers International's Minneapolis-St. Paul-based Workplace Solutions Group advises that when optimizing the workplace, we need to shift from asking the question of how we can cut real estate costs and instead ask new questions that lead us to creating true value in the workplace that drives revenue. "Focusing solely on costs can lead to missed opportunities for productivity and revenue improvements."

According to U.S. News, companies pay office workers about 20 times more in salary and benefits than they pay in real estate. Thus, our focus should be on keeping employees engaged and productive. If cutting real estate expenditures by 10% leads to a 10% loss in productivity, your company loses $2 for every 10 cents saved.

Engaging employees requires winning over hearts and minds. It requires creating employees who feel esteemed, valued and enthusiastic about their work and career paths. It is the manager's responsibility to create a positive environment that breeds collaboration, purpose, enthusiasm and a sense of ownership among employees. Engagement is necessary for the high productivity that is driven by innovation, creativity and flexibility. An engaged and productive workforce attracts top talent and sustains superior growth.

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Productivity increases sustainably due to three major factors:

  1. Mission-driven purpose
  2. Leadership and management support of mission and employees
  3. Desirable work environment

We leave numbers one and two up to you, but we can help you create a desirable work environment that also decreases real estate costs, specifically utility costs. 75F solutions can reduce utility costs by over 30% in new and renovated buildings of myriad layouts and footprints. Whether measuring by cost per square foot or cost per employee, 75F can help you create the work environment that optimizes productivity and engagement. Our solutions are wireless and adaptable to any layout that you choose to improve employee collaboration, energy and flexibility.

Getting the Most From Employees Requires Superior Indoor Air Quality and Controls

A Harvard School of Public Health "COGfx" study found statistically significant correlations between indoor air quality and cognitive functions in environmentally-controlled office spaces. It found that participants in green building environments with reduced volatile organic compounds (VOCs) levels and low to moderate CO2 levels, as compared to the conventional building, averaged 61% higher cognitive test scores. In fact, CO2, VOCs and ventilation rates all had significant, independent impacts on cognitive function. Green building systems, such as 75F building automation systems, can maximize human health, building health and productivity benefits while minimizing energy consumption and losses.

Improved indoor air quality can boost employee productivity up to 8%, according to the same Harvard COGfx researchers.

Check out Colliers International's "Global Workplace Trends: 5 Shifts Companies Must Make in the Next 5 Years" for more on how connected workspaces are moving toward agile and dynamic (vs. fixed) assets that better cater to the workforce and workflows. Colliers International is not alone in recognizing these trends and opportunities for their clients. Name a large real estate company (JLL, Cushman & Wakefield, CBRE, Skanska, etc.), and you will find a major industry player identifying the importance of healthier (WELL ) and adaptive buildings in domestic and global markets.

Download the Free Indoor Air Quality Guide

Download the Free Indoor Air Quality Guide

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