Brexit aside, one of the main issues that will dominate political, fiscal and commercial debates in 2018 is the same issue that dominated the 2017 Budget – how to solve the UK’s productivity puzzle.
There are multiple factors contributing to our low national productivity. Low borrowing costs have potentially buoyed up some of our least productive companies, while business investment remains constrained following the financial crisis a decade ago.
And then there’s the tricky question of whether our methods of measuring productivity are accurate and relevant for our changing economy.
But the factor that is most relevant to us in the commercial property business is that more people than ever are employed by the services sector – finance, communications, IT – rather than the manufacturing industry. This means output becomes more about what we think and advise rather than what we make. It also means that more of us than ever are now working in offices.
We shouldn’t ignore the fact that the office has a key role to play in helping to solve the UK’s productivity problem. If more of us are office based, it is important that our workplaces allow us to work efficiently. This is the challenge, then, for those involved in designing, building and managing offices in 2018: to ensure they are enabling productivity. To meet this challenge, I believe there are three key things that we need to consider.
Measure and improve
First, there’s a need to devise meaningful ways of measuring workplace productivity and how levels of productivity in any given company are helping, or hindering, the achievement of its strategic objectives.
Of course, all companies are different – there’s no one-size-fits-all solution. Regardless of the size or type of business, a combination of existing data (for example employee attrition and absenteeism records) and gathering employee feedback (such as how easy they find it to concentrate) is likely to be a good starting point.
Once a system is in place, regular monitoring and collection of employee feedback and data will enable businesses to gain a more sophisticated, real-time understanding of the factors that may be affecting productivity.
Second, those designing and building new offices can, and should, consider productivity impact at each layer of the building. That includes selection of the site, design of the shell and associated services, the scenery and setting of its various working environments and, lastly, the nature of the management support provided.
However, there is scope to improve productivity midway during occupation, especially once regular, meaningful monitoring has been established. This allows occupiers to make tweaks to fundamentals such as lighting and temperature that can have meaningful positive impacts on how efficiently employees can work.
And finally, our jobs are going to be very different in 10 years’ time. Artificial intelligence will automate some of the more mundane aspects. Our roles will become more strategic and creative thinking will be more important. To ensure that employees are able to work productively, businesses must consider what kind of office best fits this style of working. Increased spaces for collaboration with colleagues are likely to feature heavily, for example, with less space dedicated to desk-based work.
1% productivity = £20bn in GDP
Of course, the design and management of offices alone cannot solve the UK’s productivity problem entirely but it can certainly help. The British Council for Offices’ recent productivity research – Defining and Measuring Productivity in Offices – suggests that productivity benefits of 2% to 3% could be gained by improving the working environment. The same research suggests that a 1% increase in UK productivity is worth nearly £20bn to UK GDP – a significant figure.
Furthermore, the value of productivity gains to occupiers is roughly equivalent to between 30% (in central London) and 75% (outside London) of the annual office rent. In this context, an effective strategy for delivering a productive workplace is likely to be the single most important contribution that a property professional can make to the success of their organisation.
Businesses and property professionals alike, therefore, could have a lot to gain by making 2018 the year they focus on greater productivity in their workplace.