REDUCING HR COSTS BY DESIGNWORKPLACE STRATEGIES LEARNING LAB SERIES: VOL. 3

WHOLE LIFE COSTWHEN PEOPLE COSTS ARE 200 TIMES DESIGN AND CONSTRUCTION COSTS, THE KEY TO LONG-TERM RETURN ON INVESTMENT IS DESIGN CENTERED ON PEOPLE.

.1 : 1 : 5 : 200

.1 DESIGN FEES

1 CONSTRUCTION COST

5 MAINTENANCE OPERATION COSTS200 PEOPLE OPERATION COSTS (SALARIES)

WHOLE LIFE COST OVER 30 YEARS

PROOF IN THE NUMBERSCAN THE PHYSICAL ENVIRONMENT REALLY IMPACT TURNOVER? Upwards of 65% of employees are moderately to fully disengaged in their workplace and those employees are also the most dissatisfied with their work environment. Making targeted improvement investments within an existing workspace can have a meaningful influence on engagement. Consider this example adapted from a Knoll ROI model of a 1,000-employee facility.

INVESTMENT RESULT FINANCIAL OUTCOME ROI

$100,000 Improve access and quality of meeting spaces by 25%

More engaged & productive employeesBetter ratio of fixed costs to revenue

Fixed Cost savings of $60,000 per year

Less than 2 years $120,000 in two years

Increase in engagement = retention increase of 3 people

Avoid replacement cost of 3 people $450k

Net cost avoidance $350,000

At Lutz & Company, occupant wellbeing is a top priority; material selection, light penetration, and acoustic decisions were made with employee comfort in mind. In the new space, Lutz Managers report an increase in the number of hours worked, in productivity, and in team engagement.

As your employees are your most valuable resource and your greatest investment, their success and wellbeing in a new office environment are key drivers to developing an effective workplace strategy.

A workspace aligned with your company’s culture, practices and people is one where your employees will thrive and in turn, positively affect the bottom line.

An $80,000/year manager leaving can result in turnover costs of $200,000 in lost productivity, recruiting, and training. The cost of losing a highly trained employee can be over 200% of their salary.

FIXED COSTS: TURNOVER AND HR

It takes six to nine months of an employee’s salary to find and train their replacement, who may take up to two years to reach the same productivity level.

THE OPTIMIZED OFFICEIn the competitive workforce of today, employers are looking for every advantage to attract and retain top talent while creating a culture of innovative engagement. As 80% of employees agree that their physical space can foster a vibrant culture, your workplace can be one of those true advantages: a welcoming, activated environment where your employees choose to spend time and can get their best work done. Focused attention on optimizing work effectiveness, maximizing access to daylight and views, reducing distractions, modulating temperature, and eliminating environmental toxins to create a high-performance, comfortable environment not only leads to increased productivity and performance but also reduced absenteeism – all of which positively impact the bottom line.

While your unique organizational and employee culture will inform the optimized kit-of-parts for your new office landscape, current best practices prove that balance, choice and a focus on wellbeing are key components to success. Providing a variety of spaces to support employee choice of where to work depending on the task leads to increased productivity. Per a Mars Drink study, the Power of Choice at Work, people who have choice within the workplace are:

A variety of right-sized, tech-enabled meeting spaces supports convenient and effective collaboration, enhancing employee engagement and team performance. Amenity spaces uniquely crafted to draw staff away from their desks to socialize, play, and rejuvenate support performance, happiness and connection to the organization. Additionally, studies show that increased movement throughout the day can lead to improvement in motor function, attention and even cognitive speed, all which have the potential to impact performance.

57% more likely to be engaged

53% more likely to be productive

55% more likely to be collaborating

86% more likely to have a sense of wellbeing

PEOPLE FOCUS

TYPICAL OFFICE LANDSCAPE

OPEN VS. OPTIMIZED OFFICE

NOISEThis employee has a deadline that requires quiet focus. The best way to achieve this around their noisy coworkers is by putting headphones in all day.

THE BOSSHere, the Manager has a corner office and oversees their employees. This may suggest a lack of trust and creates separation from staff.

COLLABORATIONThis team of three needs to discuss their project. They are forced to huddle near their desks; an imperfect solution due to the lack of space, and the noise that not only surrounds them, but also that they create.

SPACEThis employee is trying to have an informal meeting with their coworker but must talk over their cubicle wall to communicate.

CONNECTEDNESSDedicated workstations without other individual work choices can reduce individual movement throughout the office and therefore casual collisions with colleagues outside of their immediate proximity.

NEGATIVES COMPOUND, SO EMPLOYEES SEEK TO ESCAPE FROM THE OFFICE TO ACCOMPLISH THEIR WORK

OPTIMIZED OFFICE

This employee has a deadline. They complete the task efficiently in this small, quiet, Focus Room. Whether an office or lounge configuration, protocols identify appropriate usage to ensure shared access throughout the day

NOISE

COLLABORATIONThis team of three meets informally in a lounge space to discuss their project. When needed, they reserve a tech-enabled meeting room to optimize their collaboration efforts.

SPACEThis office provides a variety of places for employees to work that support varied work styles and preferences. Movable, reconfigurable components increase flexibility and functionality of the workspace.

Employees feel better tied to the company and the culture because they have choice to move and work based on their immediate task at hand. Employees can control their interactions so are less distracted; when interaction is choice-based, or built around spontaneous community socialization, the results are more fruitful.

CONNECTEDNESS

THE BOSSLike the employees, the manager is mobile and works where they are most comfortable. For their current task, a community table works well. Sensitive conversations can take place in a neutral private environment, instead of the stigmatized “bosses office.” This access to leadership instills confidence in their staff.

NEGATIVES COMPOUND, SO EMPLOYEES SEEK TO ESCAPE FROM THE OFFICE TO ACCOMPLISH THEIR WORK

FREEDOM OF CHOICE TRANSLATES TO EMPOWERED ENGAGEMENT

KEY METRICSSATISFACTION Measure self-reported changes in levels of satisfaction, engagement, productivity and wellbeing with Pre- and Post-occupancy Surveys

ATTRACTION + RETENTION Measure changes in new-hire rates and staff turnover, taking into consideration pre and post move-in job market qualities

ABSENTEEISM Measure changes in the number of sick days

HEALTH + WELLBEING Measure changes to ergonomic issues, medical / physical complaints, etc.

PERFORMANCE Measure identified key business metrics to gauge change in employee productivity and performance (e.g. revenue, sales, units sold, etc.)

SOURCESKnoll Workplace Research: Design Features and Effective Work

HiringSmart.com

The New Yorker: The Open-Office Trap

The Huffington Post: High Turnover Costs Way More Than You Think

Steelcase 360

Forbes: Open Office Back in Vogue- Thanks to Millennials

The Denver Post: Can the design of an office really impact workplace productivity?

Benefits of Movement: Increased Productivity by inmovement, posted March 28, 2016

The ability of a workspace to holistically support employee success in their day-to-day work life is now of equal – if not greater – importance to the typical CRE project drivers of space savings, cost reductions and optimization. While CRE goals and metrics are important considerations for the short-term bottom line of the project, employee success has far greater implications on the long-term bottom line of an organization.

So how do we measure the impact of a new workplace on employee success and how does this translate to a long-term return on investment? Engaging the HR team early in the planning process is the best way to capture these measures. Not only do HR professionals have a unique perspective on the organization and employee priorities, they are the gate-keepers to employee metrics and

ensure the appropriate development, sharing and use of this information to maintain individual privacy and confidentiality.

THE ROI OF WORKPLACE DESIGN

Rapidly expanding financial technology company BlackLine Systems wanted a dynamic new home to reflect their familial culture and support future growth in greater Los Angeles. After analyzing the financial viability and fit at multiple sites along with the results of the employee engagement process, the project team determined that BlackLine would be best served adapting and expanding their current location rather than investing in an entirely new space.

The program, spread over three floors and organized into department-based neighborhoods, includes limited private offices for key leadership, open work stations with sit-stand desks, small and large Conference Rooms, informal lounge and collaboration spaces, expandable Training Room, Game Room, Music Room, quiet pods, and a Work Café.

CONNECTING WITH SOCIAL OPPORTUNITY

In a 65,000 SF, three-floor office serving 450 employees, keeping staff connected was a primary goal. An open, central stair pulls employees vertically through the office with unique amenities at each level. The middle floor includes “the Heart” of the organization: an expansive, tech-enabled living-room style lounge designed to support socializing, informal work, and all-staff events. Amenities on the upper and lower floors include a Music Room, Golf Simulation Room, meeting booths, full-service Kitchen and Work Café, and Game Area, all of which draw employees from all floors and into interaction that’s away from the focused work of their neighborhood.

FOCUS ON WELLBEING

The office configuration optimizes access to views and natural daylight by all. Sit-stand desks and exercise equipment in the Game Area encourage movement. Healthy snacks and company-provided meals in the Café fuel hungry staff while providing a vibrant spot for connecting with colleagues. Sliding acoustical panels and mobile whiteboards between neighborhoods reduce distractions during team meetings and scrum sessions.

UNITING PEOPLE AND PLACE TO DRIVE WORKPLACE PERFORMANCE.

WE is DLR Group’s proprietary Workplace Strategy Program. It is built on stakeholder engagement and research, and backed by industry benchmarks and data.

WE researches and develops design solutions around macrotrends in the rapidly evolving CRE world of workplace.

WE SERVICES

Change Management

Culture Analysis

Pilot Studies

Portfolio/Facility Assessment

Pre + Post Occupancy Surveys

Programming + Needs Assessment

Stakeholder Engagement

OPTIMIZED OFFICE IN ACTION WORKPLACE ELEVATED

PLACEWorkplace

Optimization

PEOPLEOrganizational

Change + Alignment

Happy Employees, High Performance

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