The Australian office landscape includes many of the world’s most innovative and healthy workplaces, evolved through industry leading environmental design and the implementation of cutting-edge technologies. Anyone working within any Australian capital CBD’s will be able to instantly reference developments that are considered best in class workplaces within that city - buildings like ANZ’s Victoria Harbour HQ in Melbourne, Lendlease’s HQ in Barangaroo, Sydney and Santos Place in Brisbane. These buildings, along with many others, have a list of health, sustainability, amenity and leisure facilities and initiatives including:
- Onsite retail, hospitality and childcare
- End-of-trip facilities
- Fitness amenities
- Greenery and gardens like green walls and rooftop gardens
- High levels of fresh air and natural light along with natural ventilation
- Low VOC materials, grey water treatment and passive cooling
The emergence of these healthy and new age workplaces has been fantastic for the Australian workforce and has changed the working lives of millions of employees with a positive, direct and, most importantly, measurable impact on so many aspects of business life and profitability. For employers, the benefits are significant too including a reduction in absenteeism, increases in productivity, staff attraction and retention benefits, flexibility of working arrangements especially for working parents, and critically a demonstration from employers that culture, wellbeing and employee’s welfare are top of the agenda.
However, in my experience travelling through industrial estates around Australia, meeting tenants and undertaking countless site inspections with many of Australia’s largest corporate entities and landlords, it’s hard not to notice a significant disparity between the conditions and environments outlined above and those being provided in the majority of industrial buildings. So why aren’t we there yet with industrial workplaces?
How many people work in industrial workplaces?
Based on statistics from Deloitte there are a total of 14.6 million employees in Australia of which approx. 4.2 million people make up the base office demand within the capital city zones. Including blue collar workers, this brings the total to approx. 6.7 million leaving a balance of approx. 8 million people working in suburban or regional locations.
We estimate approx. 30% of this workforce are employed in offices within industrial estates meaning that 2.4 million people (or 16%) of the total working population make up the group of people who are potentially not working in a wellbeing focused workplace.
Moving in the right direction
Now, it is true many developers (especially the institutional funds and larger private developers) of new consolidated industrial and office buildings that have been erected in recent times have raised the bar significantly and offer good quality office and industrial environments. We have seen the rise of new environmental initiatives from developers and landlords within industrial assets, like high Green Star ratings, solar power, LED lighting, environmentally efficient cooling systems etc. As a result, many occupiers have relocated, with cultural and employee centric objectives the key drivers of their move to a new workplace. However, I can’t help feeling that the motivation to relocate and achieve these benefits for staff has largely been fuelled by the high incentive and low effective rent environment, more so than an investment in people and I am concerned that as market conditions tighten we will go backwards.
The comparison of the office and industrial asset classes is obviously quite complex with major differences in business drivers, principally the commercial realities resulting from the differing rental profiles, but I think this is a conversation we need to start having. Afterall, the numbers show as many as 2.4 million people are working in industrially located workplaces.
The trick is to identify what truly matters to the workforce
In addition to new high-rise office blocks, opportunities exist within all types of buildings and workplaces to improve health and wellbeing.
In one of my recent discussions with Lisa Justice from Amicus, Lisa explained a significant amount of research has been carried out within organisations to understand how space can be used to engage employees and support a great culture. Lisa went on to explain that when you ask about wellbeing, you may be surprised by what is discovered.
While every organisation is unique and has bespoke requirements for spaces and technologies, we know people value some things universally which many office environments fail to deliver. Take, for example, natural light and plants and consider how buildings were fitted out several decades ago with offices on the perimeter, high petition cubicles for junior staff, dark and windowless meeting rooms and perhaps a struggling pot plant or two in the corner.
When Amicus researched what people value most, it’s not the table tennis table or the bowl of fruit but rather being close to windows for natural light, lots of indoor plants and if possible, usable outdoor spaces. This is further backed up by a gamut of research demonstrating a strong link between natural light and outdoor access to productivity and employee engagement.
Healthy employees are nearly three times more productive than unhealthy employees. So, it’s not surprising that a commitment to wellbeing through building facilities and office design is fast becoming the basic standard. Beyond natural light and plants, there are many opportunities that don’t require huge investment that we could consider in industrial workplaces as addressed below.
Where can we start in the industrial sector?
The key to getting wellbeing right in any workplace is understanding a combination of what is universally valued, but also what your workforce most needs to be well, engaged and productive in their role.
Apart from corporate responsibility, the knock-on effects to productivity and profitability is clear. And while I’m no expert when it comes to wellbeing in the workplace, I’ve spoken to a few different experts like Lisa at Amicus (mentioned above), and together we’ve discussed a few points to think about within your industrial facility.
- Early dialogue with landlords - the onus isn’t merely on occupiers but also landlords. We believe early dialogue should be held between the two parties to assess ways of a combined approach to upgrade the base build facilities and the tenant fitout to optimise the personnel experience.
- Develop a consistent set of standards – consider this for all workplaces across your portfolio and be clear about goals and outcomes (regardless of whether they are an office or industrial building).
- End-of-trip facilities – consider end-of-trip facilities that could be put into an industrial facility, facilities like bike racks, showers and changing rooms to allow people to go for a run during lunch or ride to work.
- Sit to stand-up desks – for those employees requiring desks consider ways to improve comfort for people working with computers and devices like sit to stand desks.
- Stress management facilities – think about spaces or facilities you could introduce to help relive stress within employees, areas like phone-free meditation or relaxation rooms or sleep pods for drivers.
A lease expiry or renewal provides an opportunity to address these issues and the capital expenditure underpinned by a longer-term commitment. If you’re interested in how to start the conversation with your landlord or some steps you could take to upgrade your industrial workplace please get in touch via my details below.
National Director, Industrial Advisory within Occupier Services
Mobile: 0458 055 397