Investing in Healthy Buildings: An Accelerator for Human Capital, ESG Excellence, and Organizational Success
By: Matt VanSweden
Efficiency and productivity are essential in the ever-changing world of manufacturing. However, the workforce's health and well-being, which are the foundation of success, are often overlooked. Healthy buildings are more than just passive physical structures; they are crucial partners that drive a company's growth and innovation, actively cultivating environments that promote both human and environmental well-being.
The Impact of Healthy Buildings
Research has shown that buildings have a significant impact on human health and well-being. According to a study conducted by the Harvard Business Review1, companies with healthy buildings have a 14% reduction in absenteeism and a 19% increase in productivity. This translates to a savings of $7,700 per employee per year in healthcare costs. Additionally, a study by Delos2 found that employees in WELL-certified buildings had 26% better cognitive function and 38% better sleep quality, than those in conventional buildings. Healthy buildings promote better sleep, focus, concentration, and cognitive function, which are all crucial for error-free work.
Healthy Buildings to Attract & Retain Employees
The industrial sector, specifically, faces unique challenges in attracting and retaining top talent due to long hours, harsh conditions, and a lack of flexibility. This often leads to high turnover rates and difficulty in maintaining a skilled workforce. However, healthy buildings can play a crucial role in addressing these challenges by creating a more attractive and sustainable work environment that prioritizes the health and well-being of employees.
According to a recent survey conducted by the American Society of Interior Designers3 (ASID), 80% of respondents said they would be more inclined to consider working for a company that operates a healthy building. This sentiment is supported by multiple studies exploring the impact of healthy buildings on employee turnover. One study, Health as a Way of Doing Business4, concluded that companies prioritizing employee well-being experience a 20% reduction in their turnover rates.
A recent study by the Society for Human Resource Management5 (SHRM) in 2021 revealed that the industrial workforce spends an average of $20,000 per employee turnover. This cost includes direct expenses such as recruitment, hiring, and training of a new employee and indirect costs like decreased productivity, low morale, and increased safety risks. For instance, if you have 500 employees in your manufacturing facility (on the low side of the average in the mid-market) and a turnover rate of 13.8%, it will cost you over $1.4MM annually. A 20% reduction in the turnover rate due to healthy building interventions can save you nearly $280,000 annually, which amounts to over $11.2 million over the building's lifespan (assuming 40 years).
Healthy Buildings to Accelerate ESG Progress
The demand for transparent and accountable corporate reporting has increased recently, especially regarding environmental, social, and governance (ESG) metrics. Investors, employees, and consumers are more interested than ever in learning how companies handle their ESG practices.
Investing in healthy buildings can significantly contribute to a company's ESG reporting strategy. Social metrics such as employee satisfaction, health, and well-being, talent attraction, community engagement, and DEI can be improved by such investments. This, in turn, can lead to a more sustainable and equitable workplace and a more engaged and productive workforce. Companies that prioritize healthy buildings can attract and retain investors, employees, and customers looking to support companies that positively impact the world.
Balancing Operational Efficiency & Human Well-Being
Navigating the tensions of energy efficiency and human well-being is crucial in building design. A simple example of this is the placement of windows. Windows are the least energy-efficient part of any building enclosure. However, working in a windowless space can negatively impact a person's well-being by depriving them of access to nature and daylight. The challenge is to find a balance between energy efficiency and human health outcomes. This requires careful planning and a high level of expertise. Our team has extensive knowledge in evaluating indoor environments, identifying potential health hazards, and recommending solutions that address energy efficiency and human health concerns.
Foresight: Your Holistic Healthy Buildings Partner
Companies that prioritize healthy buildings can not only attract and retain investors, employees, and customers seeking to support organizations that prioritize human well-being and environmental sustainability, they can save significant dollars in the process, unlocking scarce capital to reinvest into continual ESG improvements.
The return on investment in healthy buildings is not based on wishful thinking but on deep and emergent social science with tangible economic benefits. Comprehensive healthy building interventions can drive business growth, operational efficiency, and long-term sustainability.
By collaborating with Foresight, companies can create healthier, more sustainable, and more productive workplaces. With our expertise, we can help your organization navigate the complexities of balancing energy efficiency with human well-being and ultimately create healthier, more sustainable, and productive workplaces that drive long-term success.
Sources:
Stafford, Kate, and John Alcorn. "The Healthy Workplace." Harvard Business Review, vol. 92, no. 10, 2014, pp. 78-83.
Greenblatt, Mark, et al. "The Quantified Workspace: The Impact of Workspace Design and Amenities on Employee Health and Productivity." Delos, 2014.
American Society of Interior Designers (ASID). "Healthy Buildings Survey." ASID, 2023.
Koh, H. K., Singer, S. J., & Edmondson, A. C. (2017). Health as a way of doing business. JAMA, 318(2), 131-132.
Society for Human Resource Management (SHRM). "2021 Turnover Rates by Industry." SHRM, 2021.
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