Poor Workplace Design Could Cost American Businesses $330 Billion Annually in Lost Productivity

Office design may be holding workers back from optimal job performance, as well as inhibiting companies’ competitive advantage, according to a new study released by Gensler, a leading architecture and design firm. The study is the most wide-ranging and in-depth exploration of the link between workplace design and employee performance among U.S.-based companies that has been conducted in recent years.

The Gensler 2006 U.S. Workplace Survey reveals that workplace design has a very real impact on companies’ bottom lines. In fact, the effect of office design on worker productivity in the U.S. is estimated to be at least $330 billion annually for the eight industry groups sampled in the survey, according to an analysis conducted by the research firm D/R Added Value (see Survey Methodology).

These survey findings suggest businesses that ignore the design and layout of their workplaces are failing to optimize the full value of their human capital. According to the survey, office workers believe they would be 21% more productive if given a better working environment. Almost half say they would log an extra hour per day under such improved circumstances.

The Gensler 2006 U.S. Workplace Survey is part of the firm’s annual inquiry into the impact of design on business performance and builds on an earlier workplace survey conducted by Gensler’s U.K. office.

“Businesses are waking up to the fact that the workplace is much more than just real estate and a means to house their people,” said Diane Hoskins, an Executive Director at Gensler. “They are embracing performance-focused workplace design as a strategic business initiative-as the forum that can drive employee excellence, business objectives, and ultimately, the bottom line.”

The average survey respondent is a middle manager or above, 42 years of age, in an office of 209 employees, from a company with 3,711 employees and $354 million in annual revenues. These averages roughly correlate to U.S. office worker averages.

Better Design Equals Better Performance
According to the survey, nine in ten workers believe that better office design leads to better overall employee performance, and also makes a company more competitive. Nearly 90% of senior executives, including occupants of the C-suite, feel that a better physical working environment would have a positive impact on their company’s bottom line. They also estimate that their companies would be able to perform an average of 22% more work if their companies had better designed physical working environments.

However, in practice, many businesses seem to ascribe a low value to workplace design. Forty-six percent of workers do not believe creating a productive workplace is a priority at their companies, and 40% say that minimizing costs is the main reason behind their workplace’s current layout. One in five respondents rated their current physical workplace environment as being only “fair to poor.”

Impact on Innovation, Collaboration, and Creativity
The survey demonstrates a link between the physical office and work processes such as innovation, collaboration, and creativity. Two thirds of workers believe they are more efficient when they work closely with co-workers. However, about 30% of workers don’t think their current workspace promotes spontaneous interaction, collaboration, or cooperation and teamwork among colleagues and direct reports. Only 50% believe that their current workplace design encourages innovation and creativity.

Gensler is working with a number of companies, such as BP, Discovery Communications, and the Hearst Corporation, that have identified workplace design as critical to innovating and competing in the 21st century. With strategically-planned workplaces, these companies aim to leverage their “organizational intelligence.” For example, BP is using a Gensler-designed workplace prototype to inform and infuse a new office design with attributes that clearly motivate collaborative work for the Houston Exploration and Production group.

Workplace as a Weapon in the Talent War
Survey results overwhelmingly pointed to the importance of good workplace design for employee satisfaction. Over 90% say the quality of their working environment affects their mood and attitude about their work. Almost as many (89%) believe that the quality of their working environment is very important to their sense of job satisfaction.

“In the coming years, companies will succeed or fail depending on their ability to recruit and retain top skilled workers,” said Hoskins. “Therefore, the office environment is taking on an increased responsibility to connect people and support strong corporate cultures that engage workers hearts and minds.”

Additional Survey Findings
Topping the list of employee grievances about physical environment were lack of space, too few quiet areas, uncomfortable workstations, and bad layout and design. Other notable results from the study include:
· Over one third of respondents say their current workplace design does not promote health and well-being; yet healthy and secure working conditions are reported as the most important factors in an efficient working environment.
· 62% of U.S. office workers have great respect for leaders who work in an open plan environment with their teams rather than in private offices.
· Only 42% of respondents say they would be proud to show important customers or potential recruits their current workplaces.

Survey Methodology
Designed by D/R Added Value, the survey was conducted online in March 2006 among a randomly selected and representative sample of 2,013 office workers in all staff and management strata in the U.S. National in scope and representing six major geographic regions, the sample represents workers in eight industry groups – Legal; Accounting; Consulting; Banking; Financial Services and Insurance; Entertainment and Media Technology; Energy and Telecommunications; Retail; and Product Manufacturing. Job types include all levels within the organization including staff workers, middle managers, and senior managers, including C-Suite executives. The sample matches U.S. Census data with respect to average worker age and gender.

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