The ROI of Adopting a New Workplace Strategy: 3 Leaders Weigh In

You’ve decided it’s time to bring your workplace into the 21st century with a modern design and new ways of working.

Maybe you’ve noticed a third of your desks are empty on any given day because more employees are working from home. Or department managers admit they’re embarrassed to bring candidates in for interviews because the office design is dated and uninspiring.

Whatever the reason, everyone agrees it’s time for a change—except your CEO and CFO. They want to know what kind of return they’re going to see on that investment.

It’s a fair question.

We asked workplace leaders from Sodexo, Hershey and Genentech how they measured the ROI of a new workplace strategy. Here’s what they shared.

What’s The ROI of A New Workplace Strategy?

Magnus Löfsjögård, Head of Digital Innovation Nordics at Sodexo

Sodexo had many reasons for deciding to relocate its Stockholm office to a new, more modern one that supported activity-based working. The lease was expiring on the current office, and the location wasn’t very accessible.

The company also wanted to improve space utilization, create an environment where employees would be happier and more productive and improve their brand’s reputation with a location that would be more welcoming to visitors.

After implementing a new workplace strategy two years ago, Sodexo has seen measurable improvements in each of those areas, according to Löfsjögård.

Here are just a few of them:

• Better space utilization – Sodexo reduced space by 1,300 square meters while adding 70 work spaces
• Greater productivity – Employees reported a 94 percent increase in efficiency
• Greater satisfaction – Employees reported an increase in overall satisfaction from 77 percent to 93 percent
• Better brand reputation – Sodexo more than doubled the number of visitors to its office from 1,000 in 2016 to 2,100 during the first six months of 2017.

The new workplace design eliminated assigned seating, which was an adjustment for most employees. However, once they became accustomed to reserving work spaces and moving more freely around the office, they found they were much more efficient.

“We are much quicker and more agile,” Löfsjögård said. “We can have five-minute conversations instead of hours-long meetings,” “When we start a new project, we are several weeks faster and profitable right away.”

Stephen Hinkle, Senior Facilities Manager, Hershey

Hershey’s original chocolate factory in Hershey, Pa., was built in 1903. The company wanted to preserve its storied history while also creating a modern workspace that would encourage greater productivity, collaboration and a better work/life balance.

The Hershey Co. invested $60 million to renovate its original chocolate factory into a beautiful, bright, 500,000-square-foot corporate office with 1,500 work spaces. The new office has a balance of quiet work spaces, collaborative spaces and amenities that enhance the employee experience, including a fitness center (to make up for the never-ending supply of chocolate.)

Hershey looked at benchmarking data from other companies in the consumer packaged goods industry to determine what good space utilization looked like. Hinkle said the average company only uses about 55 percent of its office space on a daily basis, and Hershey is well above that. It has also reduced the amount of square footage it uses per employee from 330 square feet to between 175 and 225.

Improving the employee experience (starting with a well-designed office) has also boosted Hershey’s recruitment and retention, according to Hinkle.

“A stellar employee experience attracts talent,” he said. “And research shows companies with engaged employees are 21 percent more profitable.”

Terry Tran, Head of Neighborhood Work Environments, Genentech

Genentech, a leading biotechnology company headquartered in San Francisco, developed an innovative approach to managing its real estate. Like many organizations in the Bay Area, it faced high real estate costs and recognized the need for new ways of working that would make it easier to attract and retain the best talent anywhere.

Genentech’s answer to these challenges was Neighborhood Work Environments (NWEs), which combine a mix of shared work settings, technology and agreements to support collaborative and individual work.

Members of a NWE can choose from a variety of available spaces (small private rooms, team rooms, open studios or drop-in areas) depending on the type of work they are doing.

Tran looks at a number of factors to evaluate the success of a NWE every three months during its first year in existence.

“First, are the elements that enable successful work—social, technology, places—being used and used consistently? Second, are key work practices occurring more often and effectively? For example, is there evidence of more spontaneous interactions with colleagues that result in fewer formal meetings? Are teams utilizing technology and tools to do collaborative work? Are teams working more effectively across distance and time zones? Third, is there a perceived impact on the desired business outcomes? For example, has communication been simplified and improved across teams? Has there been a marked improvement in efficiency or productivity in certain work processes? Have we seen a reduction in employee work fatigue?”

Tran takes all these factors into consideration and makes adjustments as needed.

As three forward-thinking companies that successfully updated their workplace strategies, Sodexo, Hershey and Genentech might offer just the case studies you need to start bringing your C-suite onboard with your own workplace modernization strategy. At the very least, they showcase a variety of metrics you can use when measuring the ROI for such an undertaking.