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Substantial research shows that planning, design and management of the office environment have substantial implications for organizations, in both economic terms and in wise-use of "human capital."
Workplace Analysis is a Sound Investment:
Real benefits accrue from effective workplace design when the design supports
the situation-specific workplace behaviors that will contribute to business
success … when the workplace is purposively planned and designed to be
a "tool" for work, part of a system of enablers that includes technology,
work processes, skills enhancement and the workplace. Support for workplace
behaviors best starts with an understanding of the business, so that workplace
goals are clearly aligned with business goals. However, goals don't produce
value…outcomes produce value. By truly understanding workplace needs within
a business framework, BOSTI Associates' process allows workplace design
and how workplaces are used to generate behavioral outcomes that directly
and indirectly support and promote desired business outcomes. And making
the facility work really matters to any organization … it affects important
business outcomes, and has economic consequences.
Effects of the Workplace on Work
The physical environment for work is one of many things that affect team
performance, individual performance, and job satisfaction. But the physical
environment is always "present", always shaping behavior, interactions
and distractions. BOSTI's Associates have long been pioneers in research
that attempts to understand how much effect the workplace has on work,
and on the business.
BOSTI Associates has engaged in two major "waves" of research on these matters. In the 1980's, we collected data from some 10,000 workers in about 100 organizations (corporate and governmental), and analysis of these findings led to publication of a 1985 two-volume landmark work, "Using Office Design to Increase Productivity" (now in its third printing).
Newest Research (1994-00)
Much has changed since then ... in technology, in customer focus, in the
proliferation of teams, in matrix management, in mobility and virtual
work, and in workforce expectations. So, early research about the effects
of the workplace on work needed updating. To that end, since 1994, BOSTI
Associates has been collecting new data about a wide variety of job types
in several industries. We currently have a new database of over 13,000
cases (from 1994 to 2000, and growing), which now measures team performance
as well as individual performance and job satisfaction. Analyses of the
effects of the workplace on these bottom-line measures suggest that the
physical design of the workplace has a substantial impact on business
success factors ... and the results show great commonality.
Some highlights
of the findings:
BOSTI examined
the effects that the workplace has on performance and satisfaction, compared
to all other factors affecting work, such as technology; pay/ incentives;
advancement opportunities; skill-to-task matching; direction by managers;
work/ life balance, etc. The average findings for companies in our database
is shown in the graphic below.
The analysis shows that about a dozen particular features of the workplace are primary contributors individual job performance, team performance, and job satisfaction ... and that the strongest contributors are 1) a diistraction-free workplace that allows people to concentrate (both as individuals and in doing group-work), and 2) an environment that supports informal interactions with others, for face-to-face learning, and to keep up with what's going on. Both of these needs must be met in any business-supportive workplace, and they can, without interfering with the other.
The First Wave of Research: 1980-85
BOSTI's 1980's nationwide research project looked at the workplace as a collection
of "facets"... things like physical enclosure, aesthetics, privacy, furniture,
status communication, temperature control, lighting...eighteen in all. The
research was a set of large scale studies, involving some 10,000 workers in
100 organizations, and included a major before and after study. It explored
how changes in these "facets" related to changes in organizational important
measures of individual job performance, job satisfaction and ease and quality
of communication, all of which have measurable economic consequences to organizations.
Economic analyses demonstrate that the dollar value of the benefits of appropriately
designed office can be substantial, as can the costs of poorly designed ones.
The data suggest that the theoretical upper limit of benefits from a "perfect"
workplace could have an annual benefit equal to about 17% of salary. In practice,
we didn't believe that benefit was attainable. Our own experience at that
time suggested that 2 to 5% was reasonably attainable. However, the newest
data suggests the effects of the workplace are greater. [Brill, M. with Margulis,
S., Konar, E., and BOSTI, Using Office Design to Increase Productivity.
Buffalo, NY: published Vol. 1, 1984 and Vol. 2, 1985.]
ECONOMIC ANALYSES OF THE COSTS OF ACHIEVING THE OFFICE-BASED MISSION
In the past too much attention was paid to the costs of the office environment
and not enough to the value of the organizational benefits of its use.
Early analyses (1968) that compared the cost of people (salaries and benefits)
to the costs of the office environment disclosed that people costs were
far greater than office costs, in a ratio of 13 to 1 for offices newly
built, and 5 to 1 for offices leased. Put another way, over a ten year
period, 92% of all money spent to achieve the organization's office-based
mission was spent on people, 2% to maintain and operate the building,
and only 6% was the cost of building it new, and buying furnishings and
equipment.
These ratios were quite consistent over time, with the calculations done in
1968 and 1981.
In our 1991 calculations, the relative costs of technology began to increase
noticeably, and in our year 2000 calculation, they've surpassed facility
costs. In all these calculations, the total cost of the office environment
included: building it; buying its furniture; supplying electronic equipment;
software, infrastructure, and training; and providing energy and maintenance
for day-to-day operations. The newest
calculations are shown below:
U.S. Statistics/
Professional Job Type
10 Year Office Costs vs. People Costs, 1998 - 2008
ASSUMPTIONS & DATA SOURCES
Salary: 1998 Computer Programmer $49,570, up 3.82%
for 10 years = $590,197/ 10 years
(Median Annual Wage: U.S. Occupational Employment Statistics)
(Up 3.82% per year: ten year wage and salary growth (1988-1998): Bureau of Labor Statistics, employment cost trends)
Benefits: 1.35 x salary = $796,766
(Private industry white collar workers, Bureau of Labor Statistics, news release, June 29, 2000)
Square feet per worker = 286 S.F. "all in"
(IFMA Benchmarks III Report, 1999)
Class A New Construction @ $130/ S.F. = $37,180 (286 S.F. x $130)
(April 1999, Building Standards, Class A, NYC)
(Costs are for hard costs of construction, and do not include development and finance costs, which vary so widely as to preclude any estimate. However, even with development and finance costs equaling 50% of the construction costs, the people-cost to office-cost ratio is affected only slightly.)
Maintenance and Operations costs @ $9.86/ rentable sq.ft.,
up 4%/yr = $118.34/RSF x 286 S.F. = $33,845
(Includes: maintenance, janitorial, utilities, environment, life-safety, security, project costs, space planning, amenities, IFMA Benchmarks III Report, 1999)
Furniture set = $5,000 with $3,000 of upgrades over 10 years = $8,000
(Industry standard: $3,500 to $5,000)
Technology Support (hardware, software, infrastructure, training) = $10,000/year
(From survey of BOSTI clients)
|
ANALYSIS
OF TOTAL COSTS OF WORK
|
||||
| COST COMPONENT |
FOR 10 YEARS
|
|||
|
For 10 Years |
% of Total |
|||
| New Construction |
$37,180 |
3.8% |
||
| Furniture |
$8,000 |
0.8% |
||
| Maintenance & Operations |
$33,845
|
3.5%
|
||
| Technology Support |
$100,000 |
10.2% |
||
| People Total Cost |
$796,766 |
81.6% |
||
|
TOTAL
|
$975,791 |
100% |
||
Graphically displayed, the relative costs of people and
the workplace are:
IMPLICATIONS OF
THE ECONOMICS OF THE WORKPLACE
In the 1970's, upon discovering how little workspace costs compared to the
costs of the people who work in it, the next important research question was
to find out whether the planning and design of the workspace affected how
well people perform in it
BOSTI Associate's 25 subsequent
years of research and consulting and research done by others in the past several
decades demonstrates that the office facility really does "facilitate"...it
can measurably affect job performance, job satisfaction and ease and quality
of interaction, which are important "bottomline measures" for all organizations.
The research suggests that the dollar value of the benefits of appropriately
designed offices are substantial, as are the costs of poorly designed ones.
And, there is "symmetry" ... non-supportive design has negative effects (costs)
on work and workers, and design appropriate to the work has positive ones
(benefits).
Wise Use of Research Findings
Using our process, which quantifies those aspects of the workplace that have
the strongest effects on "bottom-line measures" enables us to set real planning
and design priorities, to maximize the value of any facility investment to
the business. By employing this information in a planning and design process
which carefully examines what individuals and workgroups really do, we can
develop high-performance work environments tailored to your organization's
specific work needs.
Our process of gathering information is both "top-down" and "bottom-up"
... balancing management's needs with those of its individual contributors.
Designing from the "inside out," from your employees' and their workgroup's
business-driven work process needs, on out to whole floorplates and buildings,
is by far the best way to capture the benefits that appropriate design of
the workplace can produce. As well, from this analysis BOSTI offers guidelines
for the management of the workplace, so it is responsive to organizational
change and yields long-term high performance.
Many aspects of the office that affect job performance and satisfaction act
fairly independently of each other. Thus, incremental changes can be made
without total office redesign and major investments. Knowing which aspects
of office environment affect bottom line measures and which don't, will alter
what managers demand in new facilities, what designers emphasize in designs,
and how offices get managed.
The office is more than just a cost center. It can be an investment with a
measurable return and is yet another productivity tool to be used intelligently.
BOSTI has worked with several hundred organizations now, either doing research
about them or using research results to help them design their offices as
a tool to increase productivity and the quality of work life. From this vantage
point, the major officing breakthrough we see is not any recurrent new technology,
design theme or physical layout, but a "thinking breakthrough" about what
office design is for ... the idea that carefully designing your
offices to support what people and teams actually do is an investment that
pays off in both business terms and in positive changes in corporate culture.
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