Space: another HR frontier; when HR moves into office design, it can reap big rewards regarding culture, morale and productivity - Cover Story - human resource management

HR Magazine, Sept, 2002 by Robert J. Grossman

Before Thompson legal and Regulatory Group redesigned its St. Paul, Minn, headquarters, the place looked similar to most business settings across America. "It had a look and feel typical of the '80s and 90s', says Tim Blank, vice president of HR Technology "" the provider of legal tax and other information. "When you stepped into any of the "" floors, you'd see a vast sea of gray color ""--with a little bit of contrast in wallpaper and carpeting. It was efficient in terms of layout, but not real "" and "".

If you looked at space utilization as a cost center, the facilities guys were doing a good job. But for CEO Brian Hall, controlling costs wasn't the only goal. He wanted the space and its design to convey Thomson's First paced collaborative corporate vision. And he reasoned that topflight "" would be more likely to "" and stay if the physical environment was attractive as well as efficient.

That's why "" a step that too many employees and overlooking. He brought HR into the "" appointing Blank representatives of line business units and the facilities head to a team to address all the key issues.

"We aim to be an employer of choice, and that's where HR comes in," Blank says. "We ended up with new workstations, teaming spaces, soft searing areas [such as armchairs and other comfortable seats] and computer labs. There are still cubicles, but they've been redesigned to balance the need for privacy with the ability to quickly move your chair into a team environment, or into a soft seating area where you can hold an impromptu meeting. There are whiteboards everywhere."

The fourth floor was transformed into Main Street, drawing workers from throughout the building to a centralized hub. Workers from all departments cross paths as they exit the elevators, walking and talking by glassed-in offices of the top executives--which were relocated from the remote corners of top floors where they were out of sight.

Along with a traditional cafeteria, the "downtown" features a coffee hangout called Cafe.Com where people can conduct business in private nooks or in the open while sipping coffee. News junkies watch CNN; at the employee store, you can get most anything--candy, food, greeting cards, logo-wear clothing. There's also dry-cleaning services, a florist, a travel agency and a credit union.

Blank was expected to document the effectiveness of the new design, and he hasn't disappointed. The HR-administered "Employer of Choice Survey" shows higher satisfaction ratings on work environment questions. Turnover fell from 13.9 percent in 1999 to 12.8 percent in 2000 to 7 percent in 2001.

Other metrics, like cycle time for production of new software products, are encouraging as well. "We're now able to produce two or three new software releases in a year, whereas in the past it would take a year or more to produce only one," says Blank.

Though it's unlikely that the design changes were the sole reason for these improvements, Blank has no doubt they were instrumental. Current research suggests he's correct.

Emerging HR Competency

There's compelling evidence that the physical environment affects not only health and safety, but performance as well. In Right Management Consultants' survey of 3,500 "high-value, top-performing" employees from 26 organizations, respondents said "work environment" was the most important factor influencing their desire to stay with the organization.

"They may not talk specifically about walls and workstations, but the way an office is configured says volumes about whether a culture is open and flexible."

"Workers want environments where they can work flexibly, where they can work collaboratively and feel they're in the loop," says Rich Pinola, Right's CEO in Philadelphia.

Top performing employees aren't the only ones who see an HR aspect to office design. In fact, senior executives believe HR should be more involved in designing workspaces.

A recent study at the University of Michigan School of Business pinpoints the new competencies HR executives must master to function fully as business partners. It found that senior management expects HR to play a key role in ensuring that facilities support the culture and send the right messages.

"Buildings have tended to be designed by people for beauty and technical soundness, but there's more to it," says Wayne Brockbank, clinical professor of business at the University of Michigan School of Business. "With an informed HR in the picture, design can be linked to purpose. The key HR role is--within your financial constraints--to figure out how to make sure you have the best people, with the right focus, working effectively in collaboration. It comes down to using design to promote the culture you're trying to create, to make sure people who should sit next to each other do, and to send messages about the nature of the organization's leadership."

Behind the Curve

With a few notable exceptions, however--such as Thomson Legal and Regulatory Group--HR is struggling to rise to the challenge of making office design work better.