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Don't underestimate the profit-boosting power of wellbeing

Chris Bowie-Hill

Something unexpected happened when US retail giant Target altered its store design for approximately half its stock in a quest to reduce energy consumption.

Target achieved savings by allowing natural light through the roof rather than relying on artificial lighting, but gross sales also increased by 40 per cent.

Why? Because in a better environment, customers lingered for longer, bought more goods and this translated into a $5-$12 increase in profit per sq ft.

Despite the evidence that improved wellbeing fundamentally affects the bottom line of a business, there is still little conversation around how the two fit together. But investing in buildings is investing in people, and can create a win-win scenario.

Office example

Take the office environment. Staff benefit from a better place to work, leaving work feeling calmer and less stressed. The employer benefits from more productive, creative and innovative staff, increasing profit and making the business more resilient to change. Investors benefit from an asset of greater value, commanding higher rates, with a futureproofed yield and improved building performance over time.

So how can wellbeing be designed in, and who needs to be convinced to stump up the extra cash to pay for it?

You can illustrate value with a simple 1:10:20:1,000 ratio.

“Natural light, low levels of noise and good air quality each have a fascinating effect on people, and therefore on businesses”

If 1 is what you pay your consultants, then 10 is what you pay for construction, 20 is the building’s operational costs, and 1,000 is your business operating costs (of which staff pay accounts for 90 per cent).

In essence, over a 25-year period, the business cost is circa 100 times greater than the initial investment cost. If the greatest costs relate to people, imagine what can be achieved in terms of increased productivity by just a slight increase in upfront design and construction to create the ultimate working environment.

Remarkable benefits

Natural light, low levels of noise and good air quality each have a fascinating effect on people, and therefore on businesses.

For example, natural light determines our circadian rhythm, triggering us to wake and to sleep. It is between 100-500 times brighter than artificial lighting. In schools, placing students in classrooms with significant access to natural light is shown to increase learning rates by a remarkable 20-26 per cent.

There are commercial gains to be had, too. A controlled experiment on a call centre placed staff in three locations: a room with no daylight; a room that overlooked a car park, and a room that overlooked a park. The call-handling rates for the latter group increased by 6-7 per cent.

The bottom line? Wellbeing-focused design offers far more benefits than many realise.

Chris Bowie-Hill is a technical director at Hydrock

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