Justifying Healthy Work Environments

Editor’s note — This is the second in a two-part series examining indoor air quality issues. Click here to read the first article regarding cleaning’s impact on indoor environments

In recent years, building service providers have gone through a profound change in the way they conduct business. Cleaning, maintenance and restoration contractors have adopted a new generation of practices based on the most current understanding of environmental effects and human health protection.

Many building service contractors recognize that poor conditions are the leading cause of health complaints indoors. But a growing number are realizing that improving these conditions often requires better pay, treatment and training for cleaning workers. Now, these BSCs have the task of convincing their customers that the higher price necessary to achieve better indoor health is a worthwhile investment.

Stating the problem
About 30 percent of all buildings, at some time, cause occupants to complain about the condition of the indoor environment. These complaints can range from those of unusual smells to people developing headaches or becoming ill when in the building for any length of time.

Complaints about a building are to be expected when it’s first occupied, because many of its newly installed products give off gases. However, after several months, most complaints result not from new materials but from poor housekeeping and maintenance.

Cleaning, ideally, should be the process of locating, identifying, containing, removing and properly disposing of any unwanted substances from a surface or environment. The longer a building goes without this level of effective housekeeping and maintenance, the more serious its health problem will be for occupants. The long-term costs to owners — increased liability, a need for more restoration, lost rent and property devaluation — also increase without proper cleaning.

A growing commitment
For the past 30 years there has been a hidden evolution of what might be described as an environmentally focused or “ecocentric” economy. In an effort to keep pollutants and harmful wastes out of our environment — to minimize disease and enhance the quality of life — we have, to a large extent, reengineered our economy. Concern for the environment has contributed to new industrial processes, products and services.

Currently, in the United States, pollution abatement and control is a $160-billion-a-year industry that employs more than 3.5 million people. This part of the total environmental management industry includes products and services that directly manage or restore the outdoor environment. Add to that the cleaning-related revenues and their contribution to national income easily exceeds $200 billion a year. This is an important measure, because it is the amount of money the free market has demonstrated it will pay on an annual basis for clean and healthy indoor and outdoor environments.

There are many sound business reasons to account for the full costs of cleaning performance, but under traditional accounting systems, these potential savings and business opportunities may be obscured. What contractors must prove is that changing operational and housekeeping practices, sometimes at a higher price, actually can eliminate many customer costs such as lost worker productivity or complaint investigation.

Full-cost accounting argument
A link clearly exists between indoor environmental quality, building operating cost and productivity. In fact, increased cleaning improves worker productivity and reduces the long-term cost of doing business.

The problem contractors face when proving the impact cleaning has on worker productivity is that the measurements — absences, health costs, quality of work, total cost of production, downtime and employee attitude — are intangible. Customers often are used to more concrete productivity numbers, such as total number of units produced, which is common to industrial settings.

Although it may seem difficult to put a cost with the measurements for a healthy environment, assumptions can be made. Currently, maintaining office buildings is about a $5 billion-a-year enterprise. But this is just a fraction of the amount of money spent to operate the buildings. Of all the expenses a building owner faces, cleaning and maintenance always is the lowest. Utilities, taxes, insurance, building management and vacancies all cost more. Yet, environmentally sound management promises predictable benefits to building owners. It will improve employee health and productivity, as well as better maintain and protect the building and its property.

Assume that a company housed in its own 20,000-square-foot building has decided to allot $1.25 per square foot for enough cleaning services to maintain a “nice” appearance. The company also has determined that salary and benefits cost $275 per square foot.

After some time, cleaning only for appearance leads to a situation where not enough pollutants are removed, causing health problems in the building. Sick days and slowed work pace, due to workers reacting to those pollutants are linked to a 5 percent employee productivity loss. The annual loss then could be computed as $13.75 per square foot, per year (.05 X $275.00). That amounts to a annual loss of $275,000 (20,000 X $13.75) for employee non-performance in sickness alone, not even taking into consideration intangibles such as morale and stigma.

Other costs associated with the lower productivity include additional insurance payments, increased vacancies and possible legal fees. When estimated, these costs can add up to as much as $1 million or more (Example 2 in chart). Now, the cost of doing business in a “marginally maintained building” (Example 1 in chart), has increased dramatically with lack of proper cleaning.

But an adjustment in the cleaning budget, to allow for more tasks, better equipment and higher pay to retain dedicated cleaning workers, actually can reduce the total cost of doing business.

If the owner decides to increase cleaning by 100 percent to improve the quality of the work environment and restore lost employee productivity (Example 3 in chart), the costs go from $1.25 a square foot, per year to $2.50 a square foot, per year. For an annual increase of $25,000 in cleaning activity, the business will save $275,000 in employee productivity or, when considering the other associated costs, more than $1 million in annual business operating costs.

While a very small part of the cost of doing business, cleaning has proven to be very economically significant in managing overall business costs.

Leaving the sick building behind
Assume, for another example, that environmental conditions in a building are so bad that occupants move. Here are some of the costs to the employer:

• Days required to accomplish the move
• Days required to set up in a new facility
• Lost employee productivity while moving and setting up
• Cost to move building furnishings

There also are obvious costs for the owner of the building now empty. These include:

• Time required to release the building
• Cost due to lost rent
• Cost of utilities while vacant
• Advertising costs
• Remodeling costs
• Concessions necessary to attract new tenants

Given these costs, in almost all cases, it is vastly more efficient to keep the building environment in good condition to begin with.

Cost for sensitive environments
There still are other costs associated with ineffective environmental management. Occupants with sensitive immune systems due to age or sickness are at greater health risk than others, and often, they can’t manage their own environments. The most effective means of protecting their immune systems is to keep their immediate environments extraordinarily clean and well-maintained.

Special environments for sensitive populations such as children also have an economic viewpoint. Consider as an example the cleaning and maintenance associated with a day-care facility: Typically a family spends $6,000 a year to keep their child in day care. Assume that a 10,000- square-foot facility that cares for 50 children spends $12,000 a year on cleaning and maintenance — only 4 percent, or $240, of each child’s annual tuition.

Each time a child becomes sick because the facility was not properly cleaned, the family incurs additional costs. For example, the parents lose time at paid work and must pay more medical bills. If a child is sick for five days a year because of improper cleaning, the family could easily pay an additional $2,000 or more a year in lost wages and doctor bills.

But when the center doubles its environmental management activities, it eliminates child (and staff) sickness due to poor sanitation. That adds $240 to childcare costs per child, but saves $2,000 or more in disposable family income.

Dr. Michael A. Berry is a Research Professor at the University of North Carolina at Chapel Hill where he teaches and writes on a range of environmental management topics. He also is as private indoor environmental quality consultant.