Evidence is mounting that the building environment and design are fundamental for creating increased human performance, and significant movements are afoot within the real estate community as a response. Could this represent the start of a shift away from a traditional first cost-driven return-on-investment (ROI) model to one that is more nuanced?
A new metric “return on humans” is being coined in the real estate world to augment and enhance the typical ROI for buildings. Key drivers for this are (i) the need to improve employee health and wellness to reduce costs, improve productivity and enhance business performance, and (ii) the need to attract and retain top talent.
According to Scott Muldavin in his paper outlining the financial case for sustainability and WELL building, corporate wellness programs are not delivering the expected return in reducing healthcare costs because participation is below 50 percent at most companies. He asserts that wellness incentive programs cost around $700 per person per year (not to mention ~$10,000 per person annually for health insurance) compared with a one-time cost of $100-400 per person to implement the WELL Building Standard, and that the latter passively benefits all occupants, not just those actively participating in wellness programs.
Rex Miller, author of The Healthy Workplace Nudge, states in an interview on Brittanie Campbell-Turner’s The CONSTRUCTRR Podcast that reducing stress at work is the answer to increasing wellness. He says that 78 percent of employees attribute work as their number one cause of high or very high stress.
According to Dr. Amit Sood of the Mayo Clinic, stress predisposes to the worsening of almost every known medical condition known to mankind. He says that the World Health Organization calls stress the 21st century’s epidemic.
The built environment – and particularly the use of windows – can play a key role in helping people manage and reduce stress because of the positive impacts of both views and daylight on human biological systems. For example, the McGraw Hill Construction SmartMarket Report shows lack of daylight as the number one workplace hazard according to 36 percent of psychologists and psychiatrists surveyed.
Real estate company Cushman & Wakefield has created a tool called “Experience per Square Foot™” to help capture the value and performance of a workplace from an employee’s perspective and to understand where to make needed improvements from an owner’s perspective. This “experience” tool integrates real estate, technology and human resources (HR) initiatives. According to Bryan Berthold, managing director of workplace strategy and change management at Cushman & Wakefield, employee engagement has plateaued at 33 percent. As a result, its clients are looking for their real estate and the workplace itself to better engage employees and drive business performance. Increasingly, HR departments are also having to demonstrate to potential employees why they would want to work for their company. Workplace real estate has become a reflection of a company’s brand and values and is key to that value proposition.
Enlightened companies, such as Google and Genentech, already have facilities groups that are working on the cutting edge of workplace comfort. They are collaborating with research organizations such as the Center for the Built Environment (CBE) at University of California, Berkeley; and the Windows and Daylighting Group at Lawrence Berkeley National Laboratory (LBNL). CBE’s leading industrial partner program combines the expertise of industry, architectural practice and university research to produce world-leading data on the impact of workplace comfort, how to measure it and how to achieve it. LBNL’s FLEXLAB® allowed Genentech to optimize a new façade design for daylight admission and comfort before going forward with construction.
A few years ago, C-suite positions were created for technology and human resources to reflect their growing importance at the executive level. Will the next position created be “chief real estate” or “chief facilities” officer? The elevation of the built environment to a key business strategy will better focus attention on how the workspace impacts employee productivity and retention. This, in turn, provides more opportunities to advocate for high-performance façades and glazing that support healthy daylighting, a comfortable and productive workspace, and an energy-efficient building.