Digital Extra


to the way we manage our buildings, run our businesses and manage our human capital. Sustainability is not only about being


T


green, whatever that has now come to mean. It is about changing business and workplace culture in recognition of finite earthly resources and the benefits that investment in human capital can have on the financial performance of a business. Innovation in this area is one of the keys to a sustainable future. The plethora of information about being


‘green’ has in some cases diverted attention away from what should be a focus on sustainability. It could be said in relation to renewable energy technology for example, that opportunistic entrepreneurs have, in their enthusiasm, instituted projects that with hindsight may not have been an appropriate application of the technology. A subsequent lack of savings to the bottom line has created scepticism in some quarters about the true value of the application of this technology. However, the value that sustainable management of a building and its human capital can add to a business’s bottom line is to be found in understanding the true costs of running a business. The release of a recent report by KPMG,


Competitive Alternatives 2010 Special Report; Focus on Taxshows that, internationally, labour costs in the non- manufacturing sector account for between 74 - 85% of total costs. Utility costs, on the other hand, only account for approximately 1 - 7% of the same total costs. It is immediately obvious that the application of efficiency measures to purely reduce energy consumption will have little effect on a business’s bottom line compared with the capital investment required to institute these measures. One then questions the value to a business of mandated carbon reduction targets, especially when it only applies to those 5,000 or so UK businesses that have a minimum energy spend of approximately £500,000 per year and have to register with the CRC Energy Efficiency Scheme. The true value of savings to a business can be realised by analysing labour costs and understanding how a sustainable approach to management of human capital can have a greater impact on the profitability of a business. Apart from salaries, there are many other costs associated with employees and, from a health and well being perspective, these costs are often hidden from view. The Business Link is the official UK


54 l Property Management Select l july/august 2010 l www.pm-select.co.uk


Property Management Select


he events of the past two or so years in financial terms have raised the spectre of economic instability using existing business models. Our future lies in creating sustainable approaches


Green be damned


Tony McDermott of Norman Disney & Young says that innovation the key to sustainability and future business success.


government department offering advice to businesses. Their research suggests that addressing the following health and wellbeing issues will have a significant impact on the cost of running a business: • simple measures to prevent and manage ill-health can lead to a decrease in employee absence, which in turn can improve productivity and competitive edge; • healthy working environments can contribute to reduced employee absence through sickness and stress; • employees who feel cared for are often more satisfied and perform better, which can have the effect of reducing staff turnover and increasing productivity; • getting employees back into work after illness reduces the loss of experienced staff and the cost of recruiting new staff; • being known as an organisation that cares about employees can enhance reputation and help to attract staff and customers. The Green Building Council of Australia


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