Editor's Letter

July 24, 2015

Productivity and Profit in the Office Environment.

Office employees who are satisfied with their working environment are likely to be more productive and thus more profitable. That’s a truism that most managers and executives would probably agree with – even if they don’t act on it. And the reason why they don’t act is that they can’t easily confirm the proposition with numbers.

But researchers are increasingly trying to measure the office environment’s impact on productivity. In a presentation last month at the Every Building Conference & Expo, the annual event presented by BUILDINGS and BOMA International, the value of increasing energy efficiency was compared to the value of increasing occupant productivity. David Pogue, CBRE Global Director of Corporate Responsibility, cited research that shows the return on investments in energy efficiency pales in comparison to the return from higher employee productivity.

The analysis was based on a hypothetical 100,000-square-foot office building in the Silicon Valley region. The building has an ENERGY STAR rating of 50 and utility costs of $3 per square foot. If the building’s energy efficiency were raised enough to attain an ENERGY STAR score of 75 (the minimum for certification), then its utility costs would go down to $2.38 per square foot, resulting in a savings of $62,000 annually, or $0.62 per square foot.

In terms of the employee productivity comparison, the research assumed that the same building houses 444 employees at an average of 225 square feet per employee. The average annual salary for employees is $93,750, for a total of $41,625,000 or $416.25 per square foot. If employee productivity improved 1%, the gain would be equivalent to $4.16 per square foot, more than six times greater than the projected energy savings.

The path to retrofitting buildings for energy savings is better understood than the path to enhancing occupant satisfaction and productivity. Nevertheless, acoustical performance is a major factor, as discussed in this month’s feature article (page 22) on remedying sound problems. Another productivity factor is interior fixtures and furniture, and this issue displays winners of our annual Product Innovations award program. Both articles – and indeed every issue of BUILDINGS – is designed to help facility and property managers add value to their buildings and to their professional roles.

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