UK labour productivity, as measured by output per hour, has been steadily declining, or remaining stagnant, at best, since the financial crisis. We know productivity is a crucial ingredient to UK economic growth, but the latest ONS data released in early October make for more grim reading. Labour productivity fell 0.1 per cent in the second quarter of this year, from the first. The exact reasons for this are being constantly debated and the potential explanations are tenfold. Our research reveals what we believe is one of the key causes - that the physical environments that employers are providing their employees are rarely fit for the purpose they were created for – to work in.
Payroll is one of the biggest costs on a business balance sheet. According to the latest ONS report, the whole economy index of labour costs per hour has been steadily increasing quarterly. Therefore, surely organisations should do whatever they can to ensure the workplace they’re providing actually supports employees, to ensure optimum productivity.
At its simplest, labour productivity is the amount of output per worker, the amount of value produced divided by the amount of cost/time required to do so. Over the years strategies for optimising this have evolved immensely. Early examples of this point to technological advances such as emails and spreadsheets - making workers’ tasks run smoother and more efficiently. Ultimately, as a result of this, our productivity levels should be soaring, and yet they’re not, they’re plummeting.
Over half of the UK’s employees have to endure workplaces that fail to support them. Leesman is the world’s leading assessor of workplace effectiveness, working with organisations looking to benchmark how well their workplace supports employees. From that collective data we published our recently launched ‘The Next 250k’ report encompasses research from over quarter of a million employees in 2,200+ workplaces in 67 countries worldwide. The study looks at how a poorly planned workplace can have a negative impact on staff members, impacting their ability to perform. In the UK, 46 per cent of employees do not agree their workplace enables them to work productively and 49 per cent don’t agree that they are proud of the spaces we ask them to occupy day-in, day-out. These findings alone should make worrying reading for employers spending vast sums on corporate real estate and its operation.
So, what do organisations directly need to do to raise employee satisfaction rates? How do ‘catalyst’ workplaces consistently deliver outstanding pride and productivity agreement levels and how can other businesses learn from them? As a result of this study, at Leesman we’ve identified five key areas that organisations should focus on improving, to maximise workplace effectiveness:
The report measures the extent to which employees perceive their workplace enables them to work productively. 46 per cent cannot agree that their workplace enables them to do so. The features that have the biggest impact on employees are ‘space between work settings’, ‘dividers’ and ‘noise levels’. The results demonstrate that some organisations may be investing too much time on supporting creativity and collaboration, at the expense of the spaces needed to undertake these activities. This reaffirms that to create a high performing workplace, all elements including individual and collaborative work need to be considered.
Are millennials really that different and difficult to please? Across our database, the youngest employees actually rank the highest in our satisfaction scores, so evidently not. The report shows that designing for the youngest in organisations means ignoring a large proportion of the workforce, because those under the age of 35 only represent around a third of the workplace population across assessed spaces. So therefore, focusing too much on millennials risks implementing a misguided solution for the remaining generations. Attention should instead be directed at those in the 35-44 band, who consistently have the lowest satisfaction scores, and the 45-xx who have the most complex activity profiles. These demographic groups should perhaps be given as much, if not more, of the organisation’s focus.
New is no guarantee
A large amount of money is invested into refurbishment and relocation fit-out projects to improve workplace office designs. As a result of such high costs, business owners should rightfully expect them to deliver significant operational benefit for staff members. However, our evidence proves this not to be the case with only 34 per cent of projects outstanding workplaces. Perhaps this is because there is a lack of awareness as to the design that will best suit the needs of the workforce in question? Or maybe this failing is due to a lack of communication between parties. Once the client understands what their workforce needs from a space, they then need to play a key role in the refurbishment project in order to ensure the new build is a component for organisational performance and productivity. Otherwise they risk investing significant funds into a vanity project.
De-demonising open plan
Open plan offices are often slated in the press for killing any chance of productivity from the moment one steps into the workplace. Our database shows that there are indeed awful open-plan offices which leave people doubting their own productivity levels. But there are also great ones. Across 2,200+ workplaces surveyed, employees in the highest performing locations will almost certainly be sat in an open-plan setting. Out of these, there are those that have got it right. A number of our Leesman+ buildings, workplaces scoring outstanding results on our Index, offer flexible, open-plan environments. So demonising this way of working is not the way forward. Instead, organisations should recognise the benefits of open plan settings on key activities like ‘learning from others’, ‘informal unplanned meetings’ and ‘informal social interaction’, but design and manage a work environment that offers employees variety and choice of work settings that suit different tasks, remembering the balance of individual and collaborative work we spoke about earlier.
There is increasing pressures on space and as workforces grow, and space remains limited or expensive; this is only going to increase. As a result, businesses of all sizes are seeking to understand the potential benefits of creating more flexible teams and workplaces. Not only as a better use of limited space but to benefit from the better working practices that this format can have. The ‘work anywhere, anytime’ proposition has enticed organisations to move towards this freer approach to working and has seen them encourage more remote working or deploying an ‘activity based’ approach. This hinges, though, on empowering the employee and encouraging them to segment their work into activities and seek spaces away from the usual desk-space to best support that part of their working day.
Our data consistently supports that activity based working provides greater flexibility in how employees choose to work which can increase staff collaboration, productivity, pride and effectiveness. However, our research also suggests that strategies are often falling short of expectation, on the whole, due to lack of adoption of the behaviours necessary to make the most of an ‘activity based’ environment. To get the most from this work style, businesses should ask themselves if they have the kind of employees who will benefit from this way of working, and whether they have the support network required to change the habits of a lifetime – and work in a mobile way. People don’t just change the way they work because they are told to; they need to buy in to the benefits and be guided through the process.
In summary, the central findings of the report suggest businesses should concentrate attention on how real estate and workplace strategies can support business competitiveness, not by cost mitigation but through increasing employee engagement, loyalty and productivity. At the heart of that is their employees; understanding their work and how the workplace can best support them is crucial. It’s time we saw the workplace as a weapon in competitive advantage, rather than an unwanted, but necessary overhead.
Chris Moriarty, MD, Leesman
Image Credit: Andrey_Popov / Shutterstock