The ROI of Indoor Air Quality: How Your Air Affects Your Bottom Line
The ROI of Indoor Air Quality: How Your Air Affects Your Bottom Line
Indoor air quality remains one of the most crucial yet most overlooked parameters in workspaces despite overwhelming evidence that proves the air quality in a building impacts the cost and productivity of employees.
Indoor air quality (IAQ) is the great equalizer – it affects everyone who spends time in your business, but especially your staff. Staff costs, including salaries and benefits, typically account for about 90% of business operating costs. As such, businesses today recognize that a healthy, happy workforce is a vital component of success. Companies have invested for years in things like ergonomic workspaces, the latest technology and even free snacks and drinks to keep employees happy, but IAQ remains one of the most crucial yet most overlooked parameters.
Why is IAQ so Important?
The problem with indoor air is that it is 2 to 10 times more polluted than outdoor air. Outdoor pollutants enter a building through open doors, windows, cracks in the foundation and they are also carried inside on shoes and clothing. Once inside, these pollutants can’t escape and are recirculated through the HVAC system.
In addition to incoming outdoor pollutants, indoor environments create their own set of contaminants. Direct sources of indoor air pollution include:
- Biological sources such as viruses and bacteria released into the air through exhalations or coughing or mold and mildew accumulating in drain systems and insulation
- Airborne particles such as dust from cloth and fibers or dander from people or animals
- Volatile organic compounds (VOCs) or chemical contaminants that stem from interior products such as the fumes from cleaning solutions or the emissions from office equipment
Poor IAQ is of such a concern that it now has a specific illness linked to it. “Sick building syndrome” causes symptoms like headaches, cough, fever, dizziness, nausea, increased asthma attacks and allergy like symptoms. It’s hard to differentiate the symptoms of sick building syndrome from a cold or flu, so employees often take off work to feel better. They don’t realize that the symptoms will return as soon as they step back into the building.
In addition to the various health issues that are known to be caused by poor IAQ, there is overwhelming evidence that proves the air quality in a building impacts the cost and productivity of employees.
The ROI of Indoor Air Quality
Absent employees create a major financial cost to companies. In the United States, employee absenteeism occurs at 3% in the private sector (62.4 hours per year) and 4% in the public sector (83 hours per year), costing employers $2,074 and $2,505 per employee per year, respectively. In large organizations this can add up to millions of dollars. Poor IAQ can increase those costs by increasing sick leave. However, overcoming illnesses and discomfort related to workplace IAQ can result in significant savings.
There is clear evidence that improving a business environment with better IAQ can reduce absenteeism rates by 15 to 40%1. A Canadian study found that almost one third of employee sick time is attributed to symptoms caused or aggravated by poor IAQ2. This is supported by a Massachusetts study that noted 35% less sick leave in offices with good IAQ compared to offices with poor IAQ, resulting in a cost savings of $400 per employee per year for the business with better quality air3. How would saving $400 per employee affect your yearly budget?
One of the most interesting studies on the effect of IAQ on employees occurred in 2009 in a Michigan business. This study compared employees before and after a move from a conventional office to one with controlled, improved IAQ. After the move, this business noticed a 50% decrease in self-reported asthma, allergies and depression or stress related absenteeism. Yearly absenteeism was reduced by 72 to 120 hours4. This means that employees were able to work up to three weeks a year more than they had previously, having a dramatic impact on business productivity.
Health Cost Savings
If salaries are the largest investment an organization makes in its people, then benefits would be the second. According to Kaiser Family Foundation, the average annual healthcare cost for employers in 2021 was $7,739 for single coverage and $22,221 for family coverage. These include medical costs, insurance costs and workman’s compensation, and they are expected to see yearly increases of about 4 – 5%.
One way for employers to keep health insurance costs down is to provide an environment that proactively boosts wellness. Healthcare costs can be significantly linked to the workplace environment5. Exposure to indoor pollutants can stress the respiratory, immune and nervous systems, increasing the needs and costs of worker medical care. A comprehensive analysis by Carnegie Mellon states that improved IAQ can achieve 0.8 – 1.3% business savings on health costs alone6. This may seem like a small percentage, but when calculated against the large number of employee health costs, it can make a sizeable difference in a business’ bottom line.
If employees are the major source of cost for a business, it makes sense that any investment that can increase employee performance would pay for itself in dividends. Successful businesses know that a healthy, engaged workforce is an essential component of their profitability. IAQ has been proven time and again to improve employee performance and productivity.
A meta-analysis of 24 studies found that poor IAQ lowered performance by as much as 10% on measurements such as typing speed and unit output7. Indoor air pollutants have also been shown to increase tiredness and decrease decision making skills8. A comprehensive analysis by Carnegie Melon showed 3 – 18% productivity gains when IAQ was improved6. But how does this equate to monetary value?
A study by Harvard University examined how improving office IAQ can affect information usage, breadth of approach, strategy and crisis response in employees, all markers of a productive employee. They found that improving IAQ increased worker performance by 8%, equivalent to a $6,500 increase in productivity each year9. When the costs of improving IAQ were factored in, the IAQ improvement produced an ROI of 160% based on worker productivity alone. This falls in line with data from Carnegie Mellon that suggest an average ROI of improved IAQ of at least 120%7.
A Solution For Every Budget
At ScentAir, we understand that improving your business IAQ is an investment that needs to deliver a strong return. We are experts at working with all kinds of businesses to match one of our scientifically proven technologies to your specific space and budget. We are confident that you will find the positive impacts of improved IAQ to far outweigh the incremental costs of employing a new system. Let us show you how we can improve your air quality and find the perfect balance between proper IAQ and cost savings.
1 World Green Building Council (2014) Health, Wellbeing & Productivity in Offices.
2 Charles KE, Danforth AJ, Veitch JA, and Johnson B. (2004) Workstation Design for Organization Productivity.
3 Milton DK., Glencross PM., and Walters MD. (2000) Risk of sick leave associated with outdoor air supply rate, humidification, and occupant complaints. Indoor Air 10, pp 212-221.
4 Singh A. Syal M. Grady S. Korkmaz S. (2010) Effects of Green Buildings on Employee Health and Productivity. American Journal of Public Health 100(9), pp. 1665-1668.
5 Loftness V, Hartkopf V, Gurtekin B, Hua Y, Qu M, Snyder M. (2005) Building Investment Decision Support Tool (BIDS). Carnegie Mellon University.
6 Carnegie Mellon (2004) Guideline for high performance buildings – ventilation and productivity.
7 Wargorcki P. (ed.) Seppanen O. (ed.) Andersson J. Boerstra A. Clements-Croome D. Fitzner K. Hanssen SO. (2006) EHVA Guidebook: Indoor Climate and Productivity in Offices.
8 Bako-Biro Z. Clements-Croome DJ. Kochhar N. Awbi HB and Williams MJ. (2012) Ventilation rates in schools and pupils’ performance. Building and Environment 48, pp, 215-223.
9 MacNaughton P. Pegues J. Satish U. Santanam S. Spengler J. Allen J. (2015) Economic, Environmental and Health Implications of Enhanced Ventilation in Office Buildings. International Journal of Environmental Research and Public Health 12(11), pp 14709-14722.