Is the new office layout worth it? Measure your workplace ROI

The interior design in the office is top-notch, and employees praise the new desks and comfortable lunchroom. Behind the scenes, there is a tight budget and runaway costs. How can this be avoided? By measuring workplace ROI, the company can understand if they are spending money wisely and if business goals are being met.

What is workplace ROI and why is it important?

Workplace ROI is a valuable tool for gaining business insights, assessing the effectiveness of investments, and determining long-term revenue generation.

The purpose of measuring workplace ROI (return on investment) is to evaluate the contribution of physical office space to the company's profitability. Analyzing and tracking the impact of workplace design has become increasingly important. In the past, workplace design was often treated as a fixed budget item, along with other expenses such as furniture, IT systems, maintenance, and decorations for annual events like Christmas parties.

This approach resulted in tight office layout budgets, as many owners did not prioritize creating a positive work environment for their employees. They tended to focus on minimizing overhead costs. While there are exceptions, in general, business owners and CEOs have come to realize that office design plays a crucial role in enhancing employer branding. Employees who have positive experiences with their work and office space become excellent ambassadors for the company, adding tangible value.

Workplace ROI helps determine if the right actions have been taken and assists in setting new, sustainable goals for the future. Even small changes can have a significant impact, while other investments may not yield the desired results.

By understanding workplace ROI, businesses can optimize their office environments and drive overall success.

To summarize, workplace ROI is valuable for:

Identifying obstacles and inefficiencies
Building a strong work culture
Enabling employees to perform at their best

How to measure workplace ROI

To measure workplace ROI effectively, it is essential to establish a clear definition of workplace ROI. Once defined, you can follow these instructions to get started. While every company is unique, the following general guidelines can be helpful. It is recommended to begin with a general meeting involving all relevant stakeholders to understand the direction you are heading. As you progress, you can then focus on the specific details.

Encouraging individuals to voice their opinions during meetings can yield valuable ideas and inspiration to drive your work forward.

Here are some steps to consider:

The first crucial step is to gather data and conduct surveys as the foundation for your insights. Surveys can be designed to allow employees to provide anonymous feedback. Additionally, it is suggested to conduct face-to-face interviews with individuals to delve deeper into their responses and obtain more personalized feedback.
The next significant step is to implement the identified changes based on your conclusions. Remain open to modifying decisions along the way and continue gathering data to inform your progress.
To collect data, you can utilize Flowscape's sensors for rooms, desks, and zones. These sensors track activity in the office, enabling you to determine when and where people occupy the building. The data also reveals the utilization of various facilities such as lunchrooms, lounges, and bathrooms. Using sensors facilitates easier planning of cleaning schedules, desk allocation, and furniture arrangement. This approach helps prevent the office space from becoming overcrowded, noisy, or untidy.

If you are already utilizing sensors, you have made significant progress in calculating workplace ROI. Another valuable source of data can be obtained through the access control system, which tracks employees' entry and exit times from the building.

Collecting data can often be challenging. To ensure you stay on track, it is advisable to seek assistance from an external consultant who specializes in data collection. Some consultants employ state-of-the-art technology to gather data effectively.

Conduct employee surveys

Another option is to conduct surveys. Here are some examples of questions to ask:

How often do you come to the office each week?
Which spaces do you utilize and which ones do you not use?
What would genuinely enhance your work performance—standing desks or collaborative spaces?
Is there an adequate availability of IT equipment?
How do colleagues and departments interact with each other?
What are your daily tasks?

Remember, these questions can be tailored to align with your specific business needs. It's important to validate the responses and think creatively. Job descriptions may not always align perfectly with employees' actual daily tasks.

Defining the employee experience

These questions above are general but can be broken down into four segments to see if employees are satisfied with their workplace.

Purpose

Purpose is when employees are able to find the equipment and meeting rooms they are looking for to be able to complete their tasks. In addition, it also describes the level of comfort the employee experience. If the environment is noisy and makes it hard to concentrate, it will affect this parameter negatively.

Autonomy

Autonomy means the employees ability to alter between different desks or to find a preferred workspace of their choice. It can also mean working from home. The feeling of empowerment and influence over their workday increase the employees' performances.

Communication

Communication refers to the possibility to collaborate and brainstorm efficiently in the workplace. With the use of technology, people can locate colleagues in the office to work on tasks together.

Reputation

Reputation is the last component. As mentioned before, employer branding is on the rise. When companies are considered innovative, they will attract creative and talented professionals.

Get people involved and find new solutions

When measuring workplace ROI, employees, managers, and team leaders all play valuable roles. One idea is to initiate a pilot project involving a selected group of employees from each department.

Always evaluate the results afterwards and seek feedback through follow-up questions. Assumptions about people's working environment may lead to different outcomes than expected. While standing desks may be popular, other factors like smaller meeting rooms or dual screens might have an even greater impact on productivity.

Don't hesitate to consult Human Resources as they are experts in workplace values, company culture, and motivation. Additionally, discussing with team leaders who have in-depth knowledge of their teams can provide valuable insights.

When you need precise numbers and important metrics, someone from the financial department can be your go-to person.

Ensure everyone understands that the proposed solution will benefit everyone in the long run, increasing productivity and employee satisfaction. The faster you can demonstrate the link between an improved physical space and increased ROI, the easier it will become.

Get support from the managers

Don't leave the C-suite out of the loop. Make an effort to involve executive-level managers who are interested in profits and efficiency. Try to determine which Key Performance Indicators (KPIs) matter most to them and incorporate those into your workplace ROI model. By gaining their trust, you will have more leverage.

A holistic perspective

The goal of collecting data is not to have every detail down to a T, but rather to obtain the complete picture.

It is important to understand what the future holds. The company's current value and mission statement will be valuable assets. Consider the company's goals beyond just increasing revenue and outpacing competitors.

Calculating labour cost and value

One aspect of the budget is of course salaries. To be able to calculate a correct workplace ROI you would have to find out the value of each employee by comparing their salary and other benefits to the amount of revenue generated by every individual.

You have the possibility to figure out the exact daily labor cost per day by dividing the annual salary with the number of days worked per year (around 250).

It is possible to break it down further by dividing 250/8 to see the cost per day, and finally down to the minute. It shows that even as little as 30 mins of interrupted work can cost a lot per year! Noisy offices, lack of proper equipment and non ergonomic desks could contribute as well.

The results can be compared with the expected annual revenue of the same employee.

If someone earns $60,000 annually, it means that you will end up losing about $3750 per year if they are distracted in the workplace by half an hour everyday.

By showcasing these numbers, you can prove your point that time is money.

Analyze, implement and re-evaluate your workplace ROI

Once all the necessary data is collected, it's time to analyze it. This final step is crucial in designing the ideal workplace. It's not enough to just extract the data; it needs to be implemented effectively.

The goal is to establish a clear connection between office layout, space management, and increased employee motivation and productivity. As you may have guessed, it's not an easy task, but if you go the extra mile, results will follow.

While it's important to present figures and facts, don't forget to emphasize the long-term benefits, such as improved company culture, branding, and reputation. Focus on supporting your claims with evidence.

The conclusions drawn can be compared with previous industry insights to provide a broader perspective.

Remember, everything starts with the employees. If they are not happy and satisfied, they won't perform well. Stressful workplaces can negatively impact both creativity and health, and it can be costly to recruit new skilled professionals.

On a journey to success

Don't hesitate to revise some of your suggestions. Office management involves numerous stakeholders and managers, and it's important to ensure that everyone benefits from the proposed solution.

That being said, office workplace design does impact company culture, but there are always other factors at play. You don't have complete control over different teams, individuals, and processes.

Want guidance on how to set up your hybrid office for success?

Feel free to schedule a meeting with one of our product experts to learn more about our solutions and how technology can help you streamline your office processes without interfering with employees' day-to-day work.