James Matthews, Sustainability Consultant at GVA discusses The Stoddart Review, which aims to raise awareness among business leaders of the importance of the workplace and real estate as a key performance driver, and summarises its key points.
What is the Stoddart Review? “It exists to raise awareness among business leaders of the importance of the workplace and real estate as a key performance lever.” Put simply, the review encourages those making decision to look further into how much their workplace is contributing to the success or otherwise, of their organisation.
In any economy, it is productivity, the ability to get more out from the same labour or capital that drives workers’ wages and corporate profit. In the UK productivity is reportedly 18% below on average when compared to the other G7 economies. Shockingly, stats such as those found in the Leesman Index highlight this issue, ‘only half of employees can say their workplace enables them to work productively.’
What would a 1% productivity increase to the UK economy mean in reality? It could potentially mean up to £20 billion increase in national output! This could add £250 a year to average wages and increase annual profits across the UK by almost £3.5 billion; not a figure you can ignore.
The review explores the idea that the more tailored the infrastructure is to the needs of those using the space, the better the employees will perform. If annual staff performance reviews sit at the heart of talent management within business, why then is the majority of workplace strategy dictated by lease events?
The review looks into current metrics for analysing the performance of office space utilisation. Using this metric has unsurprisingly led to a utilisation rate, not a productivity figure. Space utilisation results in design and occupancy strategies supporting density at the expense of performance and productivity. The review moves to reframe the business case for improving the performance of 90% of typical business costs instead of value engineering what is often on average 7% of business costs in its accommodation spend.
Highlighted within the review is the disconnect between the workplace, the industry serving it and its intended beneficiaries, staff.
My top 10 takeaways from the review:
- Workplace Appraisal: Smarter not more. When looking at productivity it has been common up until now to commission utilisation studies, resulting in an occupancy density metric. However, this confuses spatial efficiency with productivity. In trying to save real estate costs, increasing occupation density creates an environment that hinders rather than helps staff. The key to increasing density is mobility. The freedom to choose, combined with a choice of spaces that suit different tasks and different preferences.
- After salaries, property is the second largest cost any business will incur. It is therefore surprising that while employee effectiveness is reviewed annually, the infrastructure supporting staff is only reviewed when a lease event arises, approximately every 10 years. It should therefore be in the interest of business to continually observe, test, discuss, measure and be prepared to tweak and change the space when needed.
- The office is alive and well: 91% of UK employees still work solely from the office. Workplaces used to be the manifestation of power and hierarchy, now they affirm collaborative culture and a sense of community. In this circumstance, the workplace has become a source of coactive power.
- According to CIPD research carried out in 2015, the workplace has become a differentiator in attraction, development and retention of talent. Job candidates consider physical workspace a more important factor than leadership, CSR and technology.
- Leveraging the workplace industry: Prioritise effective user experience over economy focused, space saving strategies. Be aware of falling into the common situation whereby projects are cost-planned before any workplace designers have taken a brief and designers are allowed minimal to zero engagement with the end users or the executive board. This inevitably results in lower levels of employee satisfaction. Good workplace design is key to performance, engagement and the bottom line, making it a crucial consideration for all business leaders.
- Are we going to see the rise of the Chief Workplace Officer (CWO)? The review calls for the creation of a position who can act as a ‘super-connector’. This individual knows the right people to turn to and is able to match the right people to the right opportunities. The CWO can develop integrated business cases and acts as the interpreter between individual teams or business units’ needs and the infrastructure teams that deliver them.
- Agility is essential to success: Business agility is no longer a luxury, it is critical to survival. Speed and cost are now equally important and are now determining the shape of real estate portfolios. Alignment between workplace and purpose is a key tool in managing agility. Fast-growth businesses consistently demonstrate that business agility is contingent on a socially cohesive organisation. Human beings are social animals and work is a social institution.
- Long-term relationships are often formed at work. In the best workplaces, employers recognise that their staff want to forge these relationships and that company allegiance can be built or strengthened from such things.
- Every business relies on technology in some form or another. The review’s data shows that this need is more focused on the ease of use and the ability to provide choice than it does to the slightly more alternative ‘feature’ meeting rooms, however extraordinary they might look! Looking forward it is predicted that by 2018 at least 13 million workplace wearable devices will be integrated into wellness programs. Technology continues to drive the market and should enable us to provide a more productive space for people to operate in.
- In the fierce race to attract and develop staff into productive and loyal team members, it is essential to assess if your current workplace enables and supports your employees. This is the beginning of the workplace strategy. Ask yourself, can you afford not to do this?