Improving productivity in offices is perhaps the “killer app” for all technology and service providers. From JLL’s 3-30-300, to Stok’s 1-10-100-1000, it is clear that helping workers do more in their working environment is more impactful than saving energy, extending equipment life, or optimizing lease terms for flexibility or cost savings.
But, how do vendors quantify such a value proposition? This is a topic we’ve focused on in the past, but it’s very meaty. Bottom line, there is an increasing body of research that ties the indoor environment to productivity gains, from improving air quality to raise mental function, to designing offices to encourage random “collisions” between colleagues.
That said, productivity improvements within buildings remain nebulous. In addition to the office environment, some research ties productivity declines to office distractions like mobile phones, which is outside the direct scope of a building environment. Another report surfaced when Slack had technical difficulties causing an outage. But this report found that productivity went UP during the outage. While the office environment does impact productivity, so do a lot of other factors. In addition to having trouble tracking productivity gains of office improvements, there are other factors that can increase or decrease productivity that may skew the impact of the office environment itself.
Smart building vendors will need to navigate this complex landscape if they want to hitch their wagons to this master value proposition. Given the challenges that many energy management software vendors have had over the years, pivoting towards productivity is shrewd and may be essential to survival. But, where is trend going?
It’s likely that the productivity value proposition matures in one of two ways. First, one outcome is that productivity becomes easier to quantify, which means that vendors can definitively build a value proposition around their solutions. Or, the other option, through standardization or some other initiative, buildings with productivity benefits proliferate and offer consistently high-quality features that attract higher rents and more demand - regardless of the precise business case.
Research that focuses on productivity gains in offices typically looks at one of a few measures. Absenteeism, turnover or engagement are big picture data points which could be caused by a variety of factors (which may include the office environment), but generally do impact productivity. At the same time, one study gave participants a cognitive function test to measure brain function. Similarly, another study looked at salesperson performance by booked revenue. Those are more direct, especially since roles in sales typically are measured simply by revenue generation.
Given the range of job types, across many industries, with various building and workplace setups, coming up with a single “productivity measurement” is unlikely. This has been echoed in discussions of how building automation systems can impact productivity: “There’s no single metric you can pull out that is the quantifiable definition of productivity.” said Dr. Trevor Nightingale at the 2018 AHR Expo.
But while quantification may be tricky, it is progressing. A 2015 study found that increased ventilation rates were responsible for an 8 percent increase in worker productivity, or $6,500 per year. A skeptical viewpoint is that while this may be a positive outcome for the buildings being studied, it may not transfer to every building. And, given the non-building environment factors that can impact productivity, how confident will building owners be in these numbers?
While quantification may improve, there’s a wide range of building types that would define productivity differently. Businesses will need to identify specific metrics that matter to them, which can educate vendors how how their products should improve productivity (and quantify these gains).
On the other hand, with the significant penetration of LEED green buildings, the growth of WELL and Fitwell for healthy buildings, it’s only a matter of time before there is a standard for buildings designed for productivity. Due to the significant penetration of LEED certified buildings, there now is reliable data that these buildings rent for more money (and also sell for higher values, too).
If the same happens for a productivity standard in the future, it would drive investments in technology for productivity. Moreover, if these technologies included surveys that collected actual responses form occupants about their sense of how productive they have been, it would provide further reinforcement of the value of productivity improvements, even if the actual productivity gain cannot be measured. Rescue Time, a software app focuses on productivity, enables workers to track their time while also automatically logging software applications that are being used. Workers can categorize their time by how productive they have been, blending self-reporting with automated tracking, and is effective. This approach could be employed by many other vendors, too.
Of course, we could find that these two potential futures occur in concert - something of a hybrid approach. There is some recent news that WELL-certified buildings, focused on healthy buildings, do improve productivity, and these benefits are becoming easier to measure. Standardization and quantification developments are at least marginally related, as the growth in WELL-certified buildings provides a larger data set to track and quantify productivity gains. We will continue to monitor how the productivity value proposition changes over time, and how vendors re-orient their value propositions to take advantage of demand for these solutions.