Colorado Real Estate Journal - November 19, 2014
Under pressure to unlock enterprise value beyond cost savings, corporate real estate departments are deploying strategies that enhance employee engagement and productivity. Attracting and retaining talent and optimizing productivity are top priorities for companies. Many are pursuing any initiative that can make a difference, although the ability to measure productivity results remains limited. CRE leaders who have engaged in workplace strategy initiatives may believe their role in fostering engagement and productivity is finished. In reality, workplace strategy is a great first step in showing how a well-thoughtout CRE program, working collaboratively with HR, IT and other internal teams, can help an organization in its talent recruitment, job satisfaction and work quality. On the inverse, groups with outmoded or unappealing work environments may be unable to compete for the workers they need. In fact, we see organizations that depend on knowledge workers approaching a crossroads on engagement strategy, with growth and reputational strength on one path and enterprise risk on the other. An experienced CRE team is perfectly positioned to guide organizations down the right path, drawing on their skills in collaborative project management and change management as well as real estate knowledge. CRE’s Impact on Productivity. The connection between good CRE practices and employee productivity is actually more fundamental than many people realize. Virtually everything CRE does is aimed at enhancing and streamlining the employee work experience – creating environments that are convenient, comfortable and aesthetically pleasing, to provide employees with the resources and frame of mind to do their best work. To the extent that productivity can be correlated to these strategies, the impact is not just positive, but compelling as an argument for driving bottomline value. In short, the more organizations understand the value of engagement-oriented CRE strategies, the more time and capital they‘re willing to invest to realize additional productivity gains. The rationale is simple: The occupancy cost of a typical office is a fraction of its staff cost, so a real estate strategy that leads to a modest improvement in productivity may justify a significantly higher occupancy cost. In practice, however, that rationale usually depends on the CRE team being able to measure the impact of its strategies on productivity – a challenge that has not been fully overcome. A well-designed program follows a basic six-step process that’s familiar to CRE professionals who have implemented other internal change initiatives: 1. Develop a baseline measurement: Understanding the situation from the beginning is vital to your ability to quantify success later on. Tactics such as targeted surveys of employees, focus groups, and a review of existing facility conditions and employee programs help the team identify opportunities and threats, and set the stage for measurable improvement. 2. Conduct opportunity assessments: Armed with baseline data, the team can identify opportunities relating to workplace amenities, the condition and location of facilities, mobility strategy and sustainability. 3. Estimate costs and benefits: The cost/benefit calculation is different for engagement than for cost containment strategies. Instead of a direct payback or ROI weighed against the upfront cost, engagement strategies rely on the indirect benefit of greater productivity. 4. Prioritize and develop initiatives: It’s often wise to start with one or two small-scale pilot projects with high value or high visibility within the enterprise. A quick success helps to gain buy-in from stakeholders when it comes to more difficult initiatives. 5. Deploy using change management: A structured change management process increases the adoption rate and speed of initiatives, a necessary ingredient to any initiative requiring buy-in or cooperation from employees, as well as senior management. 6. Measure results: Gaining feedback via post-initiative surveys and employee interviews allows the team to fill any gaps and refine strategies for later phases. Getting started. If an engagement program seems like a giant leap, it may be best to start with smaller steps. CRE leaders can start by opening lines of communication with their colleagues in HR in order to determine what pain points they are dealing with. These discussions may unearth opportunities that can be pursued on a limited scale before attempting wide-scale change. How does the work environment affect productivity? Employees cite common problems: • Temperature control issues • Stale air • Noise from co-workers or machines • Emptiness or lack of “buzz” in the office • Lack of meeting spaces Employees want amenities and processes: • Access to natural daylight • Work from home programs • Flexible work hours • Greater variety of work spaces (quiet zones, collaborative spaces, conference call rooms, etc.) • On-site fitness centers • Coffee bars