Over the last thirty years, designing, constructing and operating buildings I’ve seen first-hand the benefits on people’s lives, their wellbeing and performance of improving their surroundings. And to me the business case is obvious for organisations to improve the workplace. However, it’s the more forward-thinking organisations in the UK that are doing this, and I wanted to find out why more businesses aren’t jumping on this opportunity.
A brief history of how we learnt about the workplace and productivity
We’ve seen overwhelming evidence over the last few years that our workplaces can have a very positive or negative impact on our productivity, performance, health and wellbeing. The gold standard research in this field proved:
- Better indoor air quality promotes individual productivity (2014-2015)
- Better individual productivity leads to better organisational results (2016)
- Productivity and organisational results can be measured and expressed as a return on investment (2017)
- This holds true in the real world as well as in controlled laboratory environments (2018)
In 2014, the World Green Building Council published “Health, Wellbeing and Productivity in Offices” which showed that better indoor air quality can lead to productivity improvements of 8-11%.
In 2015, Harvard University took this concept further and discovered more dramatic results in their published research “The impact of green buildings on cognitive function” which proved that worker cognitive scores increased by 61% in low Volatile Organic Compound (VOC) indoor environments and 101% in low VOC indoor environments with improved ventilation.
An overview of the 2015 Harvard study
In 2016, The Stoddart review took the next step by linking individual performance to organisational results. The review identified that effective workplace can improve business productivity by as much as 3.5%. It suggested that UK organisations should focus on making people within the workplace more efficient rather than trying to reduce real estate costs. When we consider that people costs are many, many multiples of real estate costs, this logic is irrefutable.
British Council for Offices research on workplace productivity
In 2017, we saw that businesses recognised the link between indoor environmental quality and organisational performance, but had trouble applying this to the real world as it was difficult to calculate ROI from improved productivity. The British Council for Offices (BCO) published their report “Defining and measuring productivity in offices”. The report suggests that productivity benefits of 2-3% could be gained by improving the workplace environment. They estimated that the value of productivity gains to occupants is roughly equivalent to between 30% of the annual office rent in central London and 75% outside London.
Together, the research suggests that UK businesses and organisations are sitting on untapped potential of 2 – 3.5% productivity gains by optimising their workplace.
Company XYZ adds £1.4m to £2.5m to its bottom line.
With a 2,500m2 building and 200 employees earning the average UK annual full-time salary of £35,423, company XYZ’s annual staff costs are £7,085m. Through simple low and no-cost workplace interventions, company XYZ increases annual productivity by 2 – 3.5% which over ten years compounds to an additional output of £1.41-2.5m for them.
We’re sitting on £40 – £70 billion of additional annual output for the UK economy.
The latest research applied these principles to real world situations and uncovered a potential £40 – £70 billion of additional annual output for the UK economy.
Last year BCO published the results of Whole Life Performance Plus (WLP+) a £530,000 three-year study, led by Oxford Brookes University and LCMB Building Performance, with funding support from Innovate UK and Engineering and Physical Sciences Research Council (EPSRC). We studied people’s performance in real world environments and found that office environments can dramatically undermine productivity and performance.
Our research found that indoor environmental conditions dramatically impacted people’s cognitive capability and performance. For example, when CO2 levels were lowered, people completed the tests dramatically faster and scored better:
- Test scores improved by up to 12%.
- Where test speed was measured in one building, people worked 60% faster in lower CO2concentrations, taking a mean of 8.2 minutes to complete a test in low CO2 concentrations, compared with 13.3 minutes in modest CO2
The implications of our ground-breaking study are dramatic:
The UK productivity improvements gained by optimising workplaces, equates to £40 – £70 billion of additional annual output for the UK economy.
Simplifying the steps to improved productivity, that any organisation can follow
After three years of research, we have developed a workplace improvement toolkit which quickly captures the performance of existing workplaces and identifies what can be done to improve productivity, performance and wellbeing.
We are working with a number of global industry-leaders who are optimising their workplace to capture this source of advantage for their people and organisation. We believe that configuring your workplace to allow your people to thrive and perform at their best just makes sense.
The latest BCO guide to specification suggests office users should focus on the impact workplace design and operation has on creativity, productivity, performance and wellbeing.
Why doesn’t everyone do this?
To me it seems like a no-brainer for organisations. I’ve been puzzled for some time – why don’t more businesses grab this source of competitive advantage?
But of course, I’m on the inside and might not appreciate how other people might view this evidence.
To examine this issue in more detail, we delivered a joint workshop “The Business Case for Productive, High Performing and Healthier Workplaces” in September this year with BCO and a cross section of over forty workplace developers, occupiers and designers from a wide spread of industries.
The workshop was kindly hosted by Argent at their King’s Cross development in London. Following presentations from Professor Derek Clements-Croome, on the impact of health and wellbeing on productivity, Dr Ed Suttie of BRE on their living lab Biophilic Office project and myself on the economic case for action, we debated the industry awareness of the issue, the barrier to actions and what tools are required to help organisations turn the research into action and impact.
We had a focused and passionate debate and as a group concluded that:
- There is a limited, but growing, awareness of the detailed research proving the impact of workplace design and operation on workplace creativity, productivity, performance and wellbeing
- Productivity is a broad term that varies dependent on the industry and department looking to make improvements, and it is universally something which can improve based on the UK’s performance compared to our peers in Europe and the USA
- Human resources (HR) and real estate functions tend to be siloed in most organisations, preventing a joined-up approach to capturing this source of wellbeing and performance advantage
- Case studies that prove the benefits, toolkits and technology that simplify the process of optimising the workplace will accelerate industry uptake
We are producing a briefing note with the BCO research team that captures the evidence presented and output of the workshop which will be available to BCO members. Get in touch if you’d like to get your hands on a copy when it’s published.
To find more information on healthier workplaces, click here.
About the author:
John O’Brien is the founder and MD of LCMB Building Performance Ltd. a real estate consultancy which helps clients make their workplaces, buildings and estates work harder. John has over 30 years of experience building and operating real estate. He has worked as a client, contractor and consultant in a cross section of sectors including Higher Education, Health, Commercial and Retail. During this time he’s delivered in excess of £3billion of real estate projects, operated estates with annual FM budgets of £80m and annual energy budgets exceeding £10m. John has recently worked with a cross section of clients including King’s College London, The University of Essex, the NHS and National Express. He holds a degree in engineering, a master’s degree in business and is a fellow of the RSA.
Get in touch with John O’Brien on t: 01295 722823, m: 07711 032137 or e: [email protected] if you’d like to learn more, improve your workplace productivity, performance and wellbeing, or get a copy of the briefing note from the BCO / LCMB workshop.
 Volatile Organic Compound: a term given to a number of organic chemicals, including benzene and acetone, that evaporate or vaporise readily and are harmful to human health and the environment, commonly found in new carpets, furniture, paints and finishes as well as cleaning materials etc.
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