This is the final article of our four-part series on revolutionary new strategies and technology in corporate real estate for achieving true Operational Efficiency. In case you missed them, check out parts one, two and three.
The Three Pillars of Operational Efficiency
Understanding where your offices and buildings are incurring unnecessary costs in terms of energy and other utility consumption can lead to 10-30% in energy savings.
Understanding how to significantly improve the ability to leverage excess building space and equipment, also reducing costs, especially during non-working hours.
Understanding how factors such as air quality, cleanliness, direct sunlight and other building and workspace factors contribute to employee psychology and overall productivity.
What is a healthy building? And how do we design one?
It has been estimated that 90% of people in the US and EU spend approximately 90% of their time indoors and one can assume that much of this time is spent working — whether at home or the office1.
Meanwhile, according to the International WELL Building Institute (IWBI), which provides roadmaps and certification for healthy spaces, employees planning to quit their jobs were “25% less satisfied with their physical workplace than those who planned to stay”.2
Put it all together and it’s easy to understand the importance for businesses and relevant building stakeholders, such as facility and portfolio managers, to start paying special attention to all the environmental conditions that both increase and decrease occupant health and happiness.
But all too often the discussion and planning on how to improve spaces seem to get mired in the abstract. Before we start renovating, adding more plants, repositioning desks or social event planning, how can we be sure that whatever we do will justify all the time, effort and costs? How can we be sure our actions will net a positive ROI and make people healthier and happier?
Divide and conquer Occupancy
The World Health Organization states that a healthy building is one that “supports the physical, psychological, and social health and wellbeing of people.”
Here at EDGE Next, we help building and workspace stakeholders take the tangible steps necessary to achieve Operational Efficiency, including meeting WELL and Fitwel healthy building certification standards. For our clients, this means we approach Wellbeing in buildings within four main target areas.
1. Overall performance
According to the IWBI, studies have shown that “businesses with strong employee health and well-being programs outperform the S&P 500 significantly”, and that “portfolios composed of companies that scored high on Corporate Health Achievement Awards (CHAA) appreciated by 204% to 333% compared to the overall S&P 500 Index appreciation of 105%.”3
The institute is quick to state that “although the correlations in these studies do not necessarily confirm that health promotion is the sole cause of increased corporate financial value, it is clear that companies who have invested in their employees’ health and well-being are consistently yielding better value for their investors.”
EDGE Next helps building stakeholders understand and visualize the physical factors that ultimately contribute to overall performance and productivity.
2. Employee satisfaction
One rather straightforward way to measure employee satisfaction is through absenteeism and presenteeism statistics, not to mention overall turnover. Absenteeism is when employees miss work due to chronic mental or physical health factors, whereas presenteeism is defined as employees being at work, but not engaged enough to be fully productive — a situation which can be more costly for employers than absenteeism or health costs.
Both are serious problems, especially when viewed together. A US Gallop study found that absenteeism alone accounted for an annual productivity loss of $153 billion.4 However, workplace wellness programs combined with monitoring physical building factors, such as indoor air quality, can significantly reduce both absenteeism and presenteeism.
For example, the headquarters of the American Society of Interior Designers (ASID) in Washington, D.C. — a Platinum-level WELL Certified building — calculated that their employee absenteeism decreased by 19% in the course of a multi-year study.5 Presenteeism scores improved as well: employees felt on average that they worked at 90% of possible job performance, which the organization found to have increased by 16%.6
On the technological side, our experts work with companies to achieve similar results by installing Intelligent Building solutions that display “Biological Fundamentals” and conditions such as ventilation, temperature, sound, etc., as well as provide automated recommendations for improvement. This also provides the added benefits of increased workforce safety and interconnectivity.
3. Rental occupancy
A study by MIT has shown how healthy buildings have “garnered higher effective rents of between 4.4% and 7.7% more per square foot compared to their nearby peers that didn’t pursue a healthy building standard.” Additionally, The university’s Real Estate Innovation Lab found that lease terms were significantly up for healthy office spaces compared to those less focused on Wellbeing factors. More specifically, the IWBI has produced evidence that factors such as good daylight, street-front greenery and indoor walkability are linked to rent premiums and increased property values.
4. Energy savings (read our article on energy here)
Always with an eye on energy consumption — even within the other two pillars in EDGE Next’s approach to Operational Efficiency — there are studies showing how improving air quality, thermal comfort and lighting can lead to energy savings.
For example, a 2020 study by the Pacific Northwest National Lab found the following:
Sampling two buildings, the study incorporates both the traditional energy savings projection as well as an analysis on productivity gains. The estimated 10-year energy net present value (NPV) for one of the buildings in the case study is $44,000, whereas the estimated 10-year productivity NPV for the same building is $2,163,000, a 50X multiplier.7
Gaining actionable insights from Smart Building performance data
In short, as most organizations focus on energy and rent, they often miss the fact that savings gained by employees’ wellbeing can significantly offset those incurred in the former two areas. By making buildings smart, more livable, and improving productivity by 5-10%, you can achieve major results and true Operational Efficiency.
EDGE Next helps companies ensure high levels of physical comfort (including temperature and air quality) through rich sensor data. Improving the quality of indoor conditions can lead to an increase in employee productivity and happiness as well as to Fitwel and WELL healthy building certification.
So, how do we do it?
In previous articles in our series on how to achieve Operational Efficiency, we went into some depth on how the platform works. It bears repeating that our Smart Building solution overall is easy to execute, inexpensive and yields quick results.
First, we create a Digital Twin of your spaces that virtually represents structure, floors, rooms, etc. Next, we install and connect a network of IoT sensors and devices to your existing systems that immediately starts sending messages to the backend of the EDGE Next data platform. The platform is integrated into the company’s existing BMS with no additional upgrades, automations, capital adjustments, workflow changes or teams.
From here, the collected and correlated data is visualized on the frontend through an intuitive, customer (and even employee) facing dashboard, which provides the overviews described above and can generate additional reports on actionable insights. In addition, these insights are based on exportable data to ensure compliance and alignment with WELL performance standards.
Certain insights can even be displayed on screens mounted throughout the offices, corridors and conference rooms. This empowers not only C-suite, portfolio or facility managers within their own role in transforming their office building, but even each individual employee.
Once a system for monitoring, measuring and improving healthy building performance is implemented and positive results appear, such as increased employee desire to work in the office, you are fully on your way to improving occupant health and happiness.
2 International WELL Building Institute (2021). Investing for Health: Examining the ROI of Healthy Buildings.
3 International WELL Building Institute (2021). Investing for Health: Examining the ROI of Healthy Buildings.
4 Witters, D., & Agrawal, S. (2021, August 17). Unhealthy U.S. Workers’ Absenteeism COSTS $153 billion.
5 ASID. (2017). Design impacts lives – ASID HQ office research.
6 xxii Ammendolia, C., Côté, P., Cancelliere, C., Cassidy, J. D., Hartvigsen, J., Boyle, E., . . . Amick, B. (2016). Healthy and productive workers: Using intervention mapping to design a workplace health promotion and wellness program to improve presenteeism. BMC Public Health, 16(1). doi:10.1186/s12889-016-3843-x
7 Wang, N., & Murrell, J. (2020, June). Healthy Buildings Initiative: Pacific Northwest National Laboratory pilot study.
For over 25 years, our parent company EDGE, a leader in sustainable real estate development, whose portfolio and Net Zero initiative are dedicated to putting people and the planet first by building a zero carbon world, have understood the need and opportunity to deliver the right technologies to the right areas. Thus, EDGE Next’s Smart Building Solution was born.We believe that every relevant stakeholder at the top of executive management — CFOs, portfolio managers, facility managers, HR, etc. — has the power to act. Once we realize how our building spaces are performing, we can trigger initiatives that improve all aspects under the banner of “Operational Efficiency” — for the sake of our companies, global business and humanity itself.To facilitate such a new and innovative process, we have given extensive thought into how customers can both understand and onboard the technology as easily, clearly and seamlessly as possible. We strive to help our stakeholders realize that there are absolutely zero reasons to not try our platform. This is why we integrate our Intelligent solution into your BMS with no long-term commitment, ready to start immediately to see results. We’re confident that once you see the quick results, a whole new world of building and office management opportunities will reveal itself.