The Leader Magazine

SEP 2018

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the leader September 2018 47 per square foot when applied to 820 employees in a 150,000-square-foot (13,935-sq.-m.) building. This results in a $1.25 million, or 2.83 percent of the total average company profit per year for companies who invest in an HPB. Health and well-being Quantifying the benefits of a healthy workforce is done using a similar methodology as that for productivity. It assumes that if you can reduce the amount of time employees take off for being sick, it will affect your bottom line in relation to increased time at work. Take the average revenue per employee per day ($2,038, based on a $540,000 average revenue per employee with 265 workdays per year); multiply that by the national average of sick days per year per employee (four days) 8 ; multiply again by a 10-percent company profit margin average; and then multiply that by the percent of sick-day reduction per year. After compiling about 15 peer-reviewed academic and industry articles on HPB design and its effect on productivity, we concluded that HPB design strategies reduce the average number of sick days taken by a work force by 30 percent, proving that the "sick building syndrome" is indeed a factor in the health of a workforce. This means that a healthy workforce working in an HPB provides $245 of annual company profit per employee, or $1.34 per square foot, when applied to 820 employees in a 150,000-square- foot building. This reduced absenteeism results in $201,000, or 0.45 percent of a company's annual profit. Cumulative findings By combining productivity gains, increased retention, and better health and well-being, this latest research provided the following metrics to help both owners and occupants quantify the benefits of adopting high- performance-building strategies: • Combined per-employee metric: $3,395 annual profit • Combined per-square-foot metric: $18.56 annual profit • Combined total benefit: $2.78 million, or 6.29 percent of total annual company profit When these metrics are applied to companies of different sizes and spaces, the benefits of investing in HPBs clearly outweigh the costs. Too good to be true? Understandably, it cannot be proven that a 3-percent increase in productivity will universally equate to a 3-percent increase in revenue. But consider that a 3-percent increase in productivity produces a 1.5-percent increase in revenue for 50 percent of our findings. Apply this 50-percent reduction to our entire model, and that's still $1.4 million in profit per year. If the number were 25 percent, that would equate to $695,000 in profit per year. The point is not about the specific numbers; it's about the positive effects that should be taken into account when developing sustainable design, construction and pro forma to justify additional up-front spending on enhancing the occupant experience. The research proved applicable to multiple industry sectors using publicly available data. As stated, each business is unique, but this exercise allows one to realize the substantial financial return of investing in people through healthy real estate. Editor's note: This article is adapted from a new white paper available on CoreNet Global's Knowledge Center at http://www.corenetglobal. org/KCO/content.aspx?ItemNumber=38437 1. CSI Market. (2018). Total Market Financial Ratios. Retrieved May 15, 2018, from 2. Yardeni, E., & Abbott, J. (2015). Stock Market Briefing: S&P 500 Profit Margins, Sectors & Industries. Retrieved from 3. CoreNet Global. (2015, February 22). As Office Space Shrinks, So Does Privacy for Workers. New York Times. Retrieved from 4. BLS. (2015b). Labor Force Statistics from the Current Population Survey. Retrieved December 3, 2015, from 5. Allen, D. (2008). Retaining Talent: A guide to analyzing and managing employee turnover. Retrieved from Talent- Final.pdf 6. BLS. (2015a). Job Openings and Labor Turnover Survey News Release. Retrieved November 20, 2015, from 7. See full white paper for complete list of sources. 8. PWC. (2013). The rising cost of absence. Retrieved November 15, 2015, from Jeremy Attema is a strategic- planning expert at stok, with a master's degree in urban and regional planning from San Jose State University. Warren Neilson specializes in real estate strategy at stok. He holds a master's degree in sustainable development, built environment, from the University of New South Wales.

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