THE PRODUCTIVITY GAP
18 January 2017Henry Ford, the great American industrialist, is quoted as saying “I am always puzzled to find union leaders speaking of increased worker productivity as though workers must sweat harder to produce more”. In our modern world it can be difficult to assess productivity as compared to Henry Ford’s era of heavy industry, especially in the service economy, but a new report continuing the work of Chris Stoddart and lead by the British Institute of Facilities Management (BIFM) promotes the concept that the modern factory i.e. the office is a key contributor to workplace productivity.
In our post-Brexit environment we hear much in the media about the productivity gap between the UK and the larger economies in Europe despite reports of our longer working hours. As we “consciously uncouple” from our European cousins and with the subsequent uncertainty still unfolding, the productivity challenge is one that faces all businesses in the new and immediate economic landscape.
Although much has been said about the productivity gap, little weight has been given to the vital role the workplace has to play as either an inhibitor or facilitator of productivity. The Stoddart Review is a not-for-profit initiative which seeks to raise awareness among business leaders regarding the importance of the workplace and real estate as a performance lever in this sphere.
The Stoddart Review’s research has revealed that the majority of organisations are simply not appraising their workplace contribution to organisational performance, despite the fact that after salaries, property is the second largest cost for any company.
In Belfast, offices have traditionally been workplace “fortresses” housing and securing the public sector against the “troubles” of the past: a combination of elements that naturally drove design, such as it was, towards the concept of function over form and led by the needs of the environment rather than the user. In conjunction with this the public dominated office market often determined rental levels, dangling the carrot of large scale occupation to offset the unviable rental levels on offer. In this context the developer market, in some cases, railed against the status-quo by value- engineering the end product.
The result of this is a modern market with an under-supply of true “Grade A” offices. There are a few exceptions that emerged just before the recession that indicated a burgeoning sophistication in the market but of course this progress tapered off all too soon.
In 2016 we emerge, despite recent macro-economic events, as a city attracting continued interest from foreign investment with a handful of new, quality office developments, a skilled labour pool and the beginning of what may become a genuinely complex and stratified office rental market based not just on property fundamentals such as, location, age and condition but also design aspects which may include, expansive common areas, informal areas, floor to ceiling heights, a variety of work spaces, integrated services and access to technology.
What the Stoddart Review affirms for those involved in office development is the importance of the physical workspace. Whilst any number of pods, height-adjustable desks, breakout areas and even slides can augment an office interior, there are attributes to the fabric that are embedded at the base-build design phase which cannot be easily revisited.
In 2016 and beyond it is no longer just coffee-quaffing hipsters who want effective and engaging office space but all employees, regardless of age. Leading employers too are also now recognising the role that quality office accommodation plays in attracting and retaining staff in an ever more competitive environment.
Imposing atriums, generous communal areas, integrated cafes, break-out areas, integrated technology and quality of finishes may be significant drivers of cost in the construction phase however attempting to establish new rental tones without due consideration to these attributes is going to be a challenge and will limit the appeal of any building over the long term.
Productivity in the office environment can be measured by many metrics but the tone is often set by the environment in which the operations take place. Many occupiers and employers are looking at measuring satisfaction on a broader basis. Ultimately in an era when we are all more connected to our offices and the lines between work and our personal lives blur, a satisfied worker is more likely to be a productive one.
So just in case you are not convinced by the importance of marginal gains in productivity, News Night’s Economic Correspondent, Duncan Weldon, states that a 1% gain in productivity would add £20 billion to the UK national output, reducing the government deficit by around £8 billion and add £250 a year to the average wage packet.
If Belfast is to stand out on an international stage, not only do we need investment in office development but we must show that our understanding of workplace needs matches our aspirations.