The Facilities Department is not a profit center, but can it be?

If you’ve been in the facilities industry long enough, you’ve probably heard numerous times “the Facilities Department is not a profit center”, “facilities are a necessary evil”, “you are just overhead” and many other nonsense. While the facilities department doesn’t necessarily manufacture the widgets or process the transactions for our respective organizations, it does have a direct impact on how well and how quickly those revenue-generating features occur. Unfortunately, management and even facility staff label the department a cost center and not a profit driver.

What if you went to management with an idea that would increase worker productivity by 8%? Would they listen to him? Let’s do the numbers. Suppose you have 300 employees at your facility at a taxed rate of $100,000 per year; that equates to $30 million per year in cost. An 8% production increase would be equivalent to $2.4 million dollars. Now you have their attention??? When you look at it from that perspective, it’s easy to see why large corporations invest in professional cafeterias, on-site childcare, exercise rooms, on-the-job auto services, etc. – anything to keep employees, your biggest investment, working and productive.

Unfortunately, facilities organizations are more motivated by cost reduction than by increasing production; this is both self-induced and imposed by top management; largely because they neither understand nor attempt to quantify the impact that facility and equipment performance has on production. Fortunately, multiple studies have been conducted that help quantify that effect. So let’s explore some of those findings and use them to show our fellow facilities professionals and senior management the more important role facilities play in driving results.

thermal comfort

Let’s start with hot/cold calling: yes, the bane of many FM… But seriously, there is a much bigger problem than hot/cold calling. First, we need to consider how much productivity is lost after the affected employee spends time checking in with the neighbors – “Hey, are you hot?”, “How about you?”, etc.; then, once they’re irritated enough, they file a complaint at the facility’s service desk or get caught rushing down the hall to put out another fire… Then you need to respond, fix the problem, and work with the occupant to hopefully solve this problem. How long did that take? How much productivity and money was lost? Unfortunately, the studies I reviewed did not quantify the above scenario; however, they found that a simple 2 degree Fahrenheit increase in temperature reduced worker performance by 8%; each grade increase resulted in a 4% productivity loss. What kind of temperature change do its occupants experience in one day? Furthermore, they found that subjects who felt warm generated 56% more errors than when they felt comfortable. On the contrary, being too cold also has its effects. For example, at 18C/64F, one study tabulated that worker errors increased by 28% and reading speed decreased by 7%. Another looked at the effect of low relative humidity on worker productivity. They found that a low HR (below 25%) slowed typing by 3%, proofreading by 7%, and simple addition by 5%. So hot/cold calls do matter: they affect the bottom line.

While some causes of hot/cold calls are beyond an FM’s control, there are things that can and should be done to better manage thermal comfort; such as establishing and maintaining consistent set points (typically 68F to 72F in winter and 70F to 74F in summer). Very often though, set points aren’t the issue, it’s airflow. Therefore, it may be necessary to rebalance your building and possibly calibrate the controllers. This is one of the reasons why I’m a big supporter of retrocommissioning, as it can be very helpful in identifying and solving many creature comfort issues (see Commissioning: Is It Worth It? ). Plus, the aforementioned potential productivity gains can give you the fodder you need to justify the checks and HVAC system upgrades you’ve been begging for the past few years.

indoor air quality

With the advancement of LEED and Green Globes building certifications, much attention has been paid to indoor air quality (IAQ), including the products that are installed in a facility and the amount of fresh air needed to provide a healthy environment. Whether you’re an advocate of “green” or not, several studies have shown a clear link between indoor air quality and worker productivity. Independent studies found similar results of a 6% to 9% reduction in worker performance due to poor indoor air quality. For example, one experiment reported a 6.5% decrease in performance, an 8% increase in typos, and more complaints of headaches simply from having a rug next to a partition where test subjects were sitting . They were able to significantly reduce the negative effect by increasing the amount of outside air (OSA) provided to the space. Another study found that a one CFM per square foot increase in airflow increased productivity by 4%. A third found that higher ventilation rates increased worker performance by between 3% and 10%; the variation in that gain is directly attributed to the ability of control each subject had through the adjustable vents for the underfloor air distribution system. Those who had their vents fully open experienced the greatest productivity gain. Another case achieved significantly less sick leave for employees when outside air was twice the minimum requirements. Finally, one experiment calculated a 9% productivity gain from replacing a dirty supply air filter with a clean one: 9%, just by changing a filter!

As the last example clearly highlights, simple facility maintenance practices like air filter replacement can have a significant impact on the bottom line and the health of workers. This, of course, requires a strong operation and maintenance program for facilities organizations to achieve high completion rates on preventative maintenance work orders. I highly recommend a computerized maintenance management system (CMMS) as a key tool for measuring and managing the efficiency and effectiveness of a facility’s operation and maintenance program.

Once again, I will reiterate the value of RCx, as it can be used to measure and verify that the amount of outside air allowed into the facility is correct and ensure that the OSA dampers are calibrated and working properly.

Lastly, close attention should be paid to the materials installed in a facility, including how they are cleaned (method, frequency, and chemicals), when to replace them, and what to replace them with (solid surfaces sound better, or should I say “smelling” better. .. ) A capital replacement program would be very helpful in assisting with planning and budgeting for such replacements, as the condition and type of materials have a significant impact on the bottom line and employee health.

Resume

Is the Facilities Department a profit center? No, but as identified above, facilities and how they are operated and maintained dramatically affect an organization’s revenue and overall success. It is up to facility managers to clearly understand how they and their teams deliver value to the organization as a whole and champion that recognition for their co-workers, department managers and the C-suite.

Referenced studies include The Effects of Indoor Air Quality on Performance and Productivity – Indoor Air 2004 and Windows and Offices: A Study of Office Worker Performance the Indoor Environment – California Energy Commission.