The real cost of too much efficiency

Most people would agree that more efficiency is a good thing. In the workplace more efficiency, or workplace optimisation in Corporate Real Estate (CRE) speak, means cost savings for businesses. Making more efficient use of existing offices through co-working or hot desking, for example, can reduce the need for floorspace and thereby property costs. Incorporating smart energy systems triggered by activity can lower electricity bills.

In the past workplace optimisation tended to focus solely on increasing office densities to save money. Nowadays there is greater acknowledgement that optimisation is not simply about packing more people in to less space. It is about making the people within that space more efficient too (see JLL/ WGBC’s ‘Health, Wellbeing & Productivity in Offices’ report).

There is a tipping-point at which cramming in more people becomes counter-productive. More desks in less space may lower costs but it can be bad for workers if they feel too little personal space remains. If things like toilets, coffee machines, lockers and fridges are not scaled up accordingly worker experience will deteriorate. Worker productivity may diminish as a result and staff may be tempted to avoid the office or leave the business altogether. Lower worker productivity, talent replacement costs and lost expertise could far outweigh initial bottom line cost savings. In the medium term balance sheet impacts from lower worker efficiency are just as tangible.

Despite this JLL’s latest Global CRE survey indicates that management remains more focused on workplace efficiency than worker efficiency. Of the companies surveyed 76% had a high expectation of improved workplace productivity from their CRE compared to only 60% with a high expectation of people productivity from their CRE.

Research by the Harvard Business Review has shown that there is a 31% increase in productivity when workers are happier. Supporting their health and wellbeing requires a deeper understanding of the workplace experience. It also requires a wider definition of what constitutes an ‘efficient property’ to include physical, financial and human aspects. Workplaces are optimised when worker and workplace efficiency are balanced. Properly integrated workplace optimisation should deliver cost savings and greater worker happiness, as well as assisting staff recruitment and retention.

Businesses have a number of weapons in their armoury to ensure that workplace optimisation enhances, rather than detracts from, worker efficiency. Changes should not be rushed. Businesses should take time to work out the right balance between workplace and worker efficiency. They should not seek to exploit the greatest possible workplace gains in the shortest possible period. Some wiggle room should be incorporated in new workplace design to allow manoeuvrability and flexibility down the track without major upheaval to either workplace or worker.

In implementing workplace change it is essential to ask the most important asset of any business, its people, what they want from the process. Seeking feedback on how changes are being received, and where possible acting on it, is key. This improves the worker experience and ensures that they feel they have more ownership of the workplace. Rome was not built in a day and a fully optimised workplace takes time to craft based on user experience and changing business needs.

Underlying all of this is the need for businesses to recognise the many aspects of efficiency. It may well be that forgoing some reduction in workplace density in favour of creating a better working environment yields a greater benefit to profitability. A more balanced approach could create far superior long-term benefits to the bottom line of a business. When it comes to workplace optimisation, there is such a thing as too much efficiency.

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