Workplaces that work: for your employees and bottom line
Rents are high, but rents aren’t everything
What if we told you that a cheaper office rent on paper could actually be costing you more due to the impact that space could have on employee engagement and wellbeing?
At last check, rents across Metro Phoenix were on average $25.30 per square foot. That means that it would cost roughly $253,000 a year, or just over $21,000 a month, in rent for an average 10,000-square-foot office. At 150 square feet per employee, it would cost you roughly $3,800 per employee per year in rent.
But in addition to rent and other important factors like office location, access and building amenities, there’s actually a less obvious factor to consider when evaluating space options to understand the value potential offices could deliver to your bottom line. What is it, you may be asking? Productivity potential.
The 3-30-300 rule
Better productivity saves money, but how can we prove it? Beyond that, how can we prove that it’s more impactful than just evaluating a space on potential rent savings?
The 3-30-300 rule illustrates the average order of magnitude between a company’s costs for utilities, rent and payroll (all per square foot, per year).
$3 for utilities
$30 for rent
$300 for payroll
While actual figures will vary across locations and organizations, 3-30-300 is a solid rule of thumb. For example, where a 10% increase in energy efficiency would yield $0.30 savings per square foot and a 10% decrease in rent would save $3.00, a 10% gain in productivity is worth $30.
Create a workplace that works
The workplace is not just where work happens. It’s how work happens. And that changes over time. The reasons are numerous: a maturing (and very selective) workforce, pervasive internet access and mobile enthusiasm, an energetic (if wary) economy, newfound concern for worker wellbeing, rapid growth in the “contingent” workforce and the alarming disengagement levels1 of employees who can’t shake the feeling that we’re just not meant to spend 40 hours a week corralled in cubicles.
1. Tear down the walls
2. Zone out in a good way
3. Plan for the future
4. Remove barriers to technology
5. Be a brand ambassador
6. Go beyond recycling
1. Tear down the walls but only some of them
Major changes in business culture are affecting the way offices are configured, demonstrated by the rapid uptick in open office environments. Companies are striving for more collaboration when they opt for open office design, but their efforts often miss the mark.
Wanting an open office isn’t a poor instinct on the surface. Open spaces can be beautiful, energizing, flexible, collaborative and cost-effective, and make a statement about your corporate culture. However, designing an effective open office is far more subtle and complex than just sitting everyone at tables in one big room.
What are the two biggest sources of dissatisfaction in (poorly designed) open offices? Distractions and lack of privacy. These triggers can easily be addressed with careful space allocation and appropriate furniture.
For example, the individual workstation, or cubicle, has contracted, but the walls don’t have to come down completely. A series of small, personal work booths with walls no taller than ear height feels communal and personal at the same time. This setup allows for interaction if desired, but provides acoustic and visual relief between workers who report feeling uncomfortable for unintentionally eavesdropping and “spying” on others’ work in true open seating.
Consider curved walls and furniture, which—aside from being pleasant to look at—minimize sight lines so you’re not continually distracted by what’s happening 200 feet away. Curved layouts have even been linked with positive emotions, greater creativity and productivity.
Lastly, get the glass. Clear, partial privacy or fully frosted. Natural light is a big draw in open workspaces, and glass lets the light in, but keeps the noise out.
When you break down the physical silos, it tends to weaken the mental ones, too. Done correctly, a semi-open workspace creates a collaborative community of cross functional workers.
Collaboration is important, but so is concentration. Don’t sacrifice “me” for “we.”
Without barriers to brainstorming, impromptu meetings are sprinkled throughout the day, fostering a lively crosspollination of ideas. Open floorplans can dissolve physical hierarchies, encourage transparency and enrich and mold office culture.
As employees seek more connected ways of working, companies should respond with space to fit their needs. But making it easier to work in tandem should not come at the expense of heads-down focus.
2. Zone out in a good way
Not everyone works the same way. Even more obvious: not every task has matching constraints. The reason so many open offices flop is because they fail to account for different work styles between employees and among tasks.
An open floorplan certainly makes it easier for employees to interact. But just because they can see and hear each other better doesn’t mean they’re more likely to collaborate. The answer is to create a variety of thoughtfully conceived work spaces—or zones—that are conducive to different needs. What kinds of work are completed on a regular basis? What type of setting would be best for each?
Organize by function
Try shifting from an ownership to a membership model. The most productive workplaces are no longer oneperson-per-desk, but, rather, they create non-territorial neighborhoods by function. Diverse settings support the different ways they work, whether that’s alone, in pairs or in groups of various sizes.
- Formal conference rooms
- Casual brainstorming spots
- IT/mobile stations
- Huddle rooms
- Private enclosed spaces
- Quiet zones
- Social “magnet” areas
Different types of work areas should be acoustically isolated but still close in proximity. Employees need to be able to transfer between work modes quickly. Otherwise they’ll make do where they are in order to save time, potentially enduring distraction or becoming one to others.
It may sound counterintuitive, but people are more engaged and loyal to an organization that works this way. Why?
When people have greater choice about how and where they work, they are empowered to choose the space that is most productive for the task at hand.
Autonomy breeds trust and accountability with employees and promotes a feeling of control. Though seating choice may seem small, it creates a sense of ownership over personal process.
3. Plan for the future (even if you can’t predict it)
One of the best workspace investments you can make is in a setup that will grow (or contract) with you into the future. When designing the layout of your space, invest in the most flexible infrastructure you can, knowing that it’s going to change.
Workspace and construction decisions are often permanent and fairly binding (short of renovation), which is why your furniture and layout shouldn’t be. Flexible workspace options enable quick and painless adjustment for short- and long-term use.
- Furniture on casters: Highly portable without assembly
- Movable partitions: Provide privacy, boundaries and visual relief when and where it’s needed
- Modular pieces: Furniture built on like dimensions can be rearranged into a couple of workstations, a huddle room or cube space
Anticipate that you’ll need to make changes, and select an infrastructure that is equipped to handle it with minimal effort and expense.
In a fast-moving, ever-changing economy, organizations that can adapt to market and economic forces succeed.
Companies that are built on a flexible workspace model have the advantage because their culture is wired into fluidity.
In the event of major change, such as rapid onboarding, reorganization of teams, or merger/acquisition, employee disruption is minimized if your office layout can flex with you.
4. Remove barriers to technology
There are plenty of hurdles to success and productivity, and technology shouldn’t be one of them. As it becomes more ingrained in our work lives, technology should be largely unnoticed. In fact, the more invisible, the better.
Workplace technology should do one of two things: maintain your workflow or enhance it. Unobtrusively.
Maintain your workflow
You have to stay connected. Strong, reliable mobile reception and wireless internet access are a must. No excuses.
Perhaps the most important, yet most overlooked technology (and top offender in terms of productivity) is power. As in outlets. Or lack thereof. You’ll have sprawling cafes and community spaces just begging to be used as mobile workstations, but employees are still tethered to where they can plug in. Data and voice are sophisticated, but power is lagging behind. Until we have ubiquitous, wireless power, we need outlets. And we need a lot of them.
Then enhance it
Support teleworking: provide remote workers with file access, seamless conferencing and implement a BYOD (Bring Your Own Device) policy that integrates their personal phones, tablets and computers.
Think mobile first
Make every task possible (and easy!) to accomplish from a phone or tablet: printing, presenting, conferencing, etc.
Know where you’re going
Smart conference rooms integrate with calendars to show the current and future status of all meeting spaces, a digital concierge tracks workforce patterns to determine which stations are available for hoteling.
Simplify face-to-face and virtual presentations. Sophisticated video conferencing offers real-time viewing, editing, file sharing and gesture control.
If you asked an average employee about their biggest barriers to productivity, they might say, “I waste 15 minutes a day, every day, looking for a meeting room. And once I find it, I waste another 10 minutes trying to get the technology to work.”
The most expensive activities occur when teams get together.
A group of eight worth roughly $50 per hour will blow through $67 in lost productivity during a frustrating 10-minute delay. And that’s just in one conference room.
But one of the biggest losses from troublesome technology is neither cost nor convenience. It’s innovation. When employees are unencumbered by connectivity issues and unrestricted by physical distance, they’re able to collaborate, be productive and innovate beyond their specific job duties.
5. Be a brand ambassador
Leadership is most responsible for fostering a sense of connection at work, but your physical space can go a long way in setting the tone. The work environment’s configuration and expression are becoming critically important in communicating messages about a company’s culture and brand.
Would you bring a friend to the office? Do you bring clients to the office or prefer to do business at a restaurant/café, where you find it more convenient? What message do these scenarios send? If your organization has a standard, corporate, “pleasant-but-bland” office environment, then who’s to say your company itself is going to be any different?
In a survey of 3,000 workers, Gallup found1 that only 41% of employees felt they knew what their company stood for and how it differed from the competition.
It becomes even harder to differentiate yourself when you consider technology’s impact on comparison shopping. Customers and employees alike are comparing not only your products and services but your salary package, management style and break room to those that are “best in class.”
Whatever makes your brand stand out in the market place should be seen and felt in the workplace, too. You don’t have to plaster your logo on the walls, but a great workplace should feel like the company it’s home to and be aligned with its values. If not, you’re losing your best first impression: the one you make internally.
A branded workplace presents a strong identity and shows the importance of employee experience. It connects employees to their purpose by reminding them of the organization’s values and their role in that journey.
When you present the same message internally as you do externally, you boost employee buy-in because your message is authentic.
When employees feel valued, they do their best work, especially when they support company goals. Branding and consistent messaging are what get them there.
Employees are more engaged with the brand and their work that supports it. That shared mission—not specific policies—creates a resilient, high-performance organization.
6. Go beyond recycling
Until recently, “greening” the office and creating one where employees are inspired to do their best work were seen as different activities. Now we’re beginning to draw a direct line from “green” to “productive” through management practices and physical characteristics that contribute to both.
On a base building level, greening generates numerous savings through features like energy-efficient systems and materials. But since most companies don’t own the buildings they work in, they are hesitant to invest in building improvements, even if they reduce energy costs.
Instead of looking at up-front expenses tied to green initiatives, sustainability leaders are asking,“What is the employee experience and how does our corporate footprint support it—or hinder it?”
Leaders in sustainability understand that a building is only as green as its occupants. After all, your people are the ones who consume the most energy, turn on the lights, generate waste and so forth.
For example: 40% of your staff works remotely? Consolidate space and pay less to cool and heat it. Provide everyone with laptops rather than desktops for a more mobile experience. A 30W notebook with LCD screen uses around 80% less energy than its desktop counterpart. Even with an external monitor, the savings are well over 50%.
Of course, a technically efficient building can still be wildly unproductive if employee comfort isn’t considered. When you’re thinking about sustainability in your space, you have to think about the people inside it.
Consider lighting: now that more tasks are done on computers with back-lit screens, overhead lighting levels can be reduced from 750-1000 lux (designed for paper-based reading tasks) down to 300-500 lux. This not only uncovers cost savings, but employees also prefer it. Over-illumination has been linked to increased instances of headaches, fatigue, stress and anxiety.
Here are some other sustainable office updates that can have a remarkable impact on employee comfort, health, happiness and productivity:
There are ways to be sustainable that simultaneously support comfort and health. Look for the sweet spot where green and productive overlap. Within it you’ll find reduced absenteeism and boosted engagement.
Productivity matters. But can I actually calculate returns?
Yes, you can, using JLL’s 3-30-300 calculator. This proprietary tool takes your company’s real input values for things like square footage, rent rates, employee salaries, average sick days and employee retention, then spits out your true 3-30-300 and total cost of occupancy (TCO).
Using this tool, we find that a company with a TCO of just over $60 million per year and a human capital cost of $54 million can save:
- $1.50 p.s.f./year with a reduced absenteeism rate of 10%
- $11 p.s.f./year with 10% improvement in employee retention
- $65 p.s.f./year with a 10% improvement in productivity
Even if you cut that same company’s improvements down to just 2% across the board—you’re still looking at $13 per square foot savings annually. That’s a lot better than the $3-4 per square foot you might save with only focusing on finding the cheapest office rent, don’t you think?