Image courtesy of Flickr user Galileo55

Academics are obsessed with the productivity of open offices. Paying attention to this research can help you get more projects approved.

Online magazine Quartz recently published a complete guide to the litany of reasons open offices are bad.

Among the problems Quartz highlighted:

  • Sickness. Not surprisingly, workers who share offices take 62% more sick days. Just imagine the risk for workers who share their office with 300 others on an airplane!
  • Productivity. Research shows that people are sad when they move from private offices to cubes (shocker), and that leads to decreased job satisfaction and productivity.

As much as we all might like private offices, IFMA reports that over half of offices are in open plan configurations. These complaints and studies don’t seem to outweigh the perceived benefits of enhanced collaboration and easier workforce planning in the face of worker churn.

If you’re tired of the same old arguments for open vs. private space, dig deeper for the hidden nugget that savvy facility professionals use to transform facility management from a cost center to a revenue center. If you read through the studies, you’ll see the primary focus is all about productivity. Academic researchers are obsessed with worker productivity, and as a facility manager, you should be too.

First, the numbers. OECD numbers place US productivity (GDP output per worker) at roughly $130,000 per year. Average wages are $45,000, meaning that the average contribution per worker is $85,000 before other overhead expenses are accounted for.

Now let’s dig into this overhead. The average worker needs 250 square feet, which in pricey Silicon Valley will run $7,500 per year to lease. Annual energy cost is a relatively paltry $500 per worker. The rent alone seems to argue in favor of open office plans.

Next, let’s look at the effect of including worker productivity in project evaluation. Consider a project that replaces aging and faulty pneumatic controls with modern DDC in a corporate building of 100,000 square feet. The $100,000 project will save 10% on energy bills, paying back in a 5 years — OK, but uninspiring. Expanding the business case shows the real impact of the project is worker productivity. Broken pneumatics leave your facility blind to zone temperatures and unable to dynamically adjust settings to respond to occupant needs. While the energy savings are helpful, the project also helps reduce complaints, employee dissatisfaction, absenteeism, and an erosion of the very collaboration the office was designed to foster in the first place.

If you omitted energy savings from your business case entirely, how much more worker productivity would be needed to pay for the project? You might be surprised by the calculations.

A 100,000 square foot building will typically have 250 workers in it, each with a productivity of $130K per year. The project cost is just 0.19% of their output, meaning using productivity as the basis of savings, the entire project is paid back in only one year if any of the following conditions hold:

  • Each worker in the building works 1.5 minutes longer each day because they feel more comfortable in the space; or
  • Because the space was more comfortable, the average employee took just one half a day less off for sick time per year; or
  • The most affected 20% of employees in problematic zones reduced sick days by 2.4 days per year.

Which business case would you rather present? Do you include worker productivity in your business cases? Do you know that your colleagues use this technique for most large IT projects? What would happen if you tried this in your next project?

About Tom Arnold

Tom Arnold is co-founder and CEO of Gridium. Prior to Gridium, Tom Arnold was the Vice President of Energy Efficiency at EnerNOC, and cofounder at TerraPass. Tom has an MBA from the Wharton School of Business at the University of Pennsylvania and a BA in Economics from Dartmouth College. When he isn't thinking about the future of buildings, he enjoys riding his bike and chasing after his two daughters.

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