The true value of space - why do we have offices?

15/06/2018

Tags: Wellbeing Blog

The way we use, manage and value space is changing. Organisations are increasingly focusing on getting more value from space by linking the workplace itself to the underlying factors that influence the delivery of business objectives. Productivity in the workplace can be hard to define, but a growing body of scientific literature substantiates investment in the working environment as a means to improve it. The first step is making a commitment to wellbeing and using technology as an enabler for data-driven decision making and business cases.

Over the last year, I’ve had dozens of meetings and conversations around the way in which we value, use and manage space. Forward thinking organisations understand that price per square foot and location aren’t the only important factors to consider in determining the true value of space.

Many organisations are considering a more flexible approach to working, whereby employees can pursue their own individual working styles, working from home or alternative environments. If we don’t always need to be in the office, what kind of place should the office be?

At home, where we’re unlikely to experience passing interactions, we may be less likely to collaborate with colleagues. Therefore the office should be somewhere to collaborate. Without inspiration from our colleagues and surroundings, we may be less creative, so the office should promote new ideas. Finally, it’s unlikely that we understand the impact of our home environment on our productivity, or more specifically, our cognitive function. Therefore, the workplace should be somewhere that’s tailored for optimal cognition. After all, the UK is a leading knowledge economy. 

A premium location with superficial good looks doesn’t at all guarantee that a workplace will support the delivery of organisational objectives, which are underpinned by the above requirements; creativity, collaboration and cognition. Therefore, how do we establish a metric for valuing space that does, and why are organisations struggling to build the business case for capitalising on the untapped potential of using the physical workplace to enhance productivity?

The first challenge in ascertaining how the workplace affects productivity is defining what productivity is. Productivity can be defined as the rate of output from a given number of inputs, or the efficacy of efforts to deliver a desired output. In certain environments, such as call centres, quantification and measurement of productivity may be more straightforward (e.g. average handle time, first call resolution, customer satisfaction, employee turnover). However, in most office environments, a plethora of interlinked and changing activities with various qualitative and quantitative outputs may be underway. Revenue growth is an indicator, but is influenced by any number of factors, such as changing markets or acquisitions. It is therefore difficult to directly measure and verify improvements in productivity, but this shouldn’t stop us; we can begin by focusing on health, and addressing the factors that we know limit success.

There’s an abundance of well-regarded scientific literature reviewing the impact of various indoor environmental quality (IEQ) factors on cognitive function, quantified in controlled experiments whereby the study participants completed computerised assessments of cognitive function. The most commonly used system for doing so assesses both cognitive and behavioural responses, ranging in complexity from speed of response and task orientation through to planning capacity and strategy. Poor air quality, which may be considered the most impactful IEQ variable, has been found to reduce cognitive function by 20-50% at levels commonly measured in offices [1,2]. Inadequate exposure to light may reduce quality sleep by 46 minutes per night [3] and productivity by 13% [4]. At low humidity, viruses may be 5x more prevalent [5], increasing absenteeism by up to 35% [6,7]. Furthermore, the salary-linked value of enhancing IEQ has been found to be worth 150x the associated energy cost [8].

From the evidence, it is clear that whilst we aren’t always able to directly measure productivity in our workplaces, it’s highly likely that taking measures to improve employee wellbeing will entail a significant cost-benefit. In recent years, the sustainability sphere has been dominated by a drive to improve energy efficiency, which is typically 1% of an organisation’s operating cost (whereas employees typically make up 90%). If you’d never reviewed or acted to improve your energy expenditure, it’s unlikely that your consumption per square metre would align with best practice standards. Very few businesses have a wellbeing policy that goes beyond mental health, and most don’t measure IEQ at all, so the chances are that it’s sub-optimal.

When focusing specifically on reducing the negative impact of IEQ on cognitive function, the first step is to collect data. Technology alone isn’t the answer, but we can’t always trust our intuition when it comes to wellbeing; an athlete may wish to eat at fast-food chains, but their nutritionist is likely to advise otherwise. With the expertise to draw meaningful insight from Big Data, Internet of Things (IoT) technology can give full visibility of the IEQ of a workplace at the point of user-intake, from which business cases and campaigns can be developed. IoT is becoming much more affordable and isn’t solely applicable to trophy assets with existing smart building technology.

For investors, this adds another dimension to differentiate assets for enhanced value, rent rates and retention of tenants. For facilities managers, it enables a proactive service delivery model, and data-driven decision making that balances sustainability, asset and wellbeing performance. For occupants, it enhances core business outputs, the attraction and retention of talent and reduces absenteeism. 

 

This blog was originally published here on LinkedIn. 

If you’d like to discuss any of these ideas, contact Edward.pugh@capita.co.uk.

References

 (1)   Allen JG, MacNaughton P, Satish U, Santanam S, Vallarino J, Spengler JD. 2016. Associations of cognitive function scores with carbon dioxide, ventilation, and volatile organic compound exposures in office workers: a controlled exposure study of green and conventional office environments. Environ Health Perspect 124:805–812; http://dx.doi.org/10.1289/ehp.1510037

(2)   Satish, U., Mendell, M. J., Shekhar, K., Hotchi, T., Sullivan, D., Streufert, S., & Fisk, W. J. (2012). Is CO2 an Indoor Pollutant? Direct Effects of Low-to-Moderate CO2 Concentrations on Human Decision-Making Performance. Environmental Health Perspectives, 120(12), 1671–1677. http://doi.org/10.1289/ehp.1104789

(3)   Boubekri, M., Cheung, I. N., Reid, K. J., Wang, C.-H., & Zee, P. C. (2014). Impact of Windows and Daylight Exposure on Overall Health and Sleep Quality of Office Workers: A Case-Control Pilot Study. Journal of Clinical Sleep Medicine : JCSM : Official Publication of the American Academy of Sleep Medicine, 10(6), 603–611. http://doi.org/10.5664/jcsm.3780

(4)   Heschong, L., Aumann, D., Jenkins, N., Suries, T & Therkelsen, R.L., (2003). Windows and offices: a study of office worker performance and the indoor environment. California Energy Commission. 1-5.

(5)   Noti, J. D., Blachere, F. M., McMillen, C. M., Lindsley, W. G., Kashon, M. L., Slaughter, D. R., & Beezhold, D. H. (2013). High Humidity Leads to Loss of Infectious Influenza Virus from Simulated Coughs. PLoS ONE, 8(2), e57485. http://doi.org/10.1371/journal.pone.0057485

(6)   Green, G., (1974). The effect of indoor relative humidity on absenteeism and colds in schools. ASHRAE Transactions. 80.

(7)   Green, G., (1981). Winter humidities and related absenteeism in Canadian hospitals. Digest of the 3rd CMBFS Canadian Clinical Engineering Conference.

(8)   MacNaughton, P,. Pegues, J., Satish, U., Santanam, S., Spengler, J & Allen, J., (2015). Economic, Environmental and Health Implications of Enhanced Ventilation in Office Buildings. nt. J. Environ. Res. Public Health 2015, 12, 14709-14722; doi:10.3390/ijerph121114709