Re-imagining corporate real estate

This article forms part of our ‘New How: Perspectives’ report: ‘Can real estate help solve the productivity puzzle?. To access this free report, please click on the download link to the right of this page.


We all know a happy engaged employee is a productive and successful employee. Unfortunately, the UK has one of the least engaged employee populations in Europe. As a result, lost productivity costs UK businesses around £70 billion a year, with an estimated total annual cost to the UK economy of £340 billion. A staggering figure, comprised of the cost associated to matters such as lost training and recruitment fees, sick-leave absences and lost innovation opportunities.

So, why do employees disengage? One common reason is as a result of uncomfortable, impractical or uninspiring working environments (and no we don’t mean the employee’s dining room).  Which leads to the next question - how can we help to fix this using our real estate?

Despite half of all UK offices being open plan, roughly 40% of employees report that this layout increases their stress levels. Studies have shown that noise is an ambient stressor, with direct links to staff de-motivation and recurrent errors. This is exacerbated by the progressively technological element of many roles, which raises the frequency of stress-related disorders. Furthermore, research by the Centre for Mental Health shows that UK companies are experiencing significant productivity losses due to employees facing constant disruptions and a lack of privacy. As a result, physically present but mentally unproductive employees (presenteeism) alone costs UK businesses £15 billion a year.

An open plan environment also fails to account for the needs of neurodivergent employees, who learn and process information differently to how others may expect. The Advisory, Conciliation and Arbitration Service estimates that this applies to over 15% of the UK population. It is well-known that those with Attention Deficit Disorders, Autism and Dyslexia experience these conditions in a unique way, which may include an increased difficulty with concentrating and organising information in a distracting environment. To raise employee morale and ensure that staff feel valued, it is vital that no groups are indirectly discriminated against.

Fortunately, there are simple steps to mitigate these factors. The best compromise: providing or enhancing quiet (and silent) work areas. Installing sound absorbent workstation screens and flooring can help, as well as facilitating a culture where it is socially acceptable to work alone.

There are also a number of complementary options to consider.

  • Colour – Although normally associated with aesthetic design, research indicates that colour influences wellness and productivity. Entire workplaces and individual areas are likely to benefit from psychological effects associated with particular palettes. A collection of studies suggest that neutral or blue tones are calming, whereas bold contrasting décor assists those in creative and dynamic professions.
  • Plants – Cultivating a natural looking workplace creates subconscious physiological responses in employees even through passive viewing. Placing flora in an office helps to reduce stress levels and contribute to optimum levels of oxygen in the air, which has a restorative effect on attention levels.

How can employers benefit from this? Deloitte has reported that employers who allocate funds to mental health and stress reducing initiatives receive a 500% return on that value in minimised sickness absences, presenteeism and budget losses from staff turnover.

The benefits don’t stop there – happy employees will show a high degree of organisational commitment. Dedication creates motivated brand ambassadors which significantly raises employee initiative, morale and punctuality. Businesses flourish from using engagement as a competitive advantage differentiator, allowing employers to retain more talent and realise the value of their inevitable training costs. The bottom line is that Gallup estimates businesses with highly engaged employees can achieve a 21% higher profitability level than those who do not. This heightened productivity is also associated with stronger customer engagement, fewer accidents and better employee health outcomes.

Considering the enormity of the current annual costs caused by disengaged employees, the impact of effectively managed real estate cannot be understated. Implementing these collective measures will improve employee wellbeing and simultaneously decrease productivity losses: everybody wins.


To read more of our perspectives on whether real estate can help solve the productivity puzzle, download our free report using the link to the right of this page.


This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.



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