Re-imagined from the globally adopted textbook co-authored by our co-founder Nick Nunnington1 we have based much of our thinking at Workplaced on the concept of the optimised alignment of people and place, with process, paradigm and planet to deliver performance and productivity.

But what does this mean?

We believe, and have substantial evidence to support the argument, that performance and productivity are unlocked when employees (people) are personally aligned with where they work (place) to support what they do (processes) within the context of their organisations paradigm (culture) and Environment, Society and Governance (ESG) policies (planet).

When this alignment is achieved the numbers speak for themselves, here we set out some of the evidence and case studies that support our view.

Performance and Productivity: what's the difference?

First, we should differentiate what we mean by performance and productivity. Performance is our term for the more tangible (and measurable) KPI's that can be applied to the workplace such as occupancy rates, space or cost per employee, staff churn rates and individual satisfaction and performance.

Productivity, whilst frequently referred to as the 'holy grail' for workplace strategy is a more collective, elusive and a more challenging concept to measure. Productivity measures output(s) linked to input(s). It is seen as highly significant because, using a simple case study, originally from Harvard Business Review, used in the same textbook [ibid] the impact on improving productivity is significantly higher than cost reduction. In this simplified case study, a 10% reduction in real estate costs creates a 9% improvement in profitability. However, if a 10% increase in productivity (output) can be combined with a 10% cost reduction (input) it results in a huge, 59% increase in profitability.

Workplace based interventions have been proven to improve productivity but are often measured in isolation, for specific aspects of workplace provision. Some examples:

  • A California based call center study in 20032, and found that daylighting and views could improve call performance by 6 to 12 percent.
  • A related study by HMG office workers saw improvements of 10 to 25 percent for tests of mental function and memory recall.
  • Steelcase3 found that high levels of engagement are linked to choice of workplace setting which was confirmed by a Leesman4 study isolating lack of choice in ABW settings for those who have highly varied work tasks as being an inhibitor of perceived productivity.
  • Steelcase also found that noise and distractions whilst focusing on a specific task led to an average of 23 minutes to return to the same cognitive flow and a reduction of up to 15 IQ points for men and 5 for women.
  • The British Council for Offices5 found in empirical testing that air quality, particularly CO2 levels and temperature impacted cognitive performance with, for example, test results falling from 84 to 94 in good air quality to 65 to 85 where CO2 was greater than 1000ppm.

Returning to cost reduction, achieving a 10% reduction in real estate costs should be relatively easy where office occupation is running globally around 40-50% depending on which study, and what part of the world you look at. With HSBC as a high-profile example, moving out of Canary Wharf to 50% less space, cost savings, even with the trend to moving to better, more expensive amenitised space, to attract staff back to the office, a 10% cost reduction should be achievable. Less space not only means less rent, service charge and property-based taxes but also heating, cooling, cleaning and other service costs and of course less CO2 emissions.

With consolidation of offices, moves such as CBRE in Tokyo which Nick covered in detail in his textbook - space was reduced by 18%, consolidating 5 buildings to 1, yet seats (places to work) rose from 400 to 600 and employee satisfaction, collaboration, engagement and ultimately productivity improved.

The trick here is to use any cost reduction or consolidation strategy to also examine the bigger picture and examine how human centric data informed alignment of people and place through an understanding of what they do (process), can unlock both cost reduction and improvements in individual staff satisfaction, engagement, retention, and creativity and therefore collective productivity.

Interpreting data from CBRE6, space planning efficiencies, largely driven by wider adoption of activity-based working, have increased global office occupancy rates by approximately 20%, from 2020 to now, enabling the majority of their benchmarking study participants to reduce their portfolio size by up to 30%. However, despite these widespread reductions in portfolio size and higher occupancy rates, they report that 64% of global office space remains underutilised.

Workplaced has the tools not only to identify underutilisation but also to provide solutions to reduce portfolio size, increasing not only efficiency but the effectiveness of the space through the data driven alignment of what people do, when and where, in the appropriate type of space and place.

Returning to the more challenging metrics of productivity, as long ago as 1924, the famous Hawthorne experiment demonstrated that measurable improvements in productivity are not always what they seem. In controlled conditions, a reduction in the time taken to assemble components with less defects, was linked to improved lighting. But having removed the improved lighting, productivity remained improved, and the results were later identified as being as much due to the emotional response of employees feeling valued, as it was to the technical improvement in the lighting provided.

In knowledge work the measurement of creativity, ideas generation and positive collaboration is difficult and inevitably has relied on perception-based measures such as the Leesman index, to indicate how respondents feel about their satisfaction, performance and productivity often after some form of CRE intervention.

Employee Engagement

Employee engagement is one of the most problematic areas of productivity and it has run at very low levels for many years, with the Gallup7 survey in the US stubbornly indicating low levels of engagement for many years. For example, in 2013, in the US, it was only 30%, in 2023 it had only risen to 33% in the US, but the global average was a dismal 23%.

Engagement is complex, and involves many organisational factors such as leadership, culture, vision, rewards and recognition and increasingly ESG policies. But in a workplace context it is usually centred on cognitive engagement either in focus work or collaboration and being creative. A 2013 global study by Gensler found that as few as one in four workers report working in an optimal workplace environment, and more than half report being disturbed by others when trying to focus. The impact of noise and other disturbances and concentration are reported on earlier but also in one study in Africa8, an increase of 10 dB reduced productivity by approximately 5% and according to a 2015 World Green Building Council (WGBC) report, background noise can lead to as much as a 66 percent drop in productivity.

What is interesting in Gensler's latest survey9 is that '97% of the most engaged employees say they are likely to stay with their company next year, compared to just 53% of the least engaged'. They also reported that employees with high engagement scores work differently, the biggest difference between the most and least engaged being the amount of time they spend working alone, learning, and socializing. Here we see a direct impact between engagement underpinned by the provision of the right kind of spaces to work, with minimised distractions and noise to staff retention.

Looking at the bigger picture of engagement, where, as indicated above the workplace contributes significantly, Gallup's 202310 employee engagement meta-analysis of 112,312 business units indicated that fully engaged teams in the top quartile, compared to the least engaged in the bottom quartile demonstrated: