SEATTLE—The back office is more effective when the workspace is designed to strengthen collaboration and productivity—as opposed to being built around individuals’ work spaces–which can be seen in square-footage costs per employee, according to design/build firm Momentum.
“Until recently, the quality of credit union back office environments was best measured through an assessment of individual worker productivity—metrics, such as loan applications processed, call center resolutions logged, and credit accounts opened provided insights into how functional the office environment was,” said Mark Alguard, senior director of strategic services for Momentum. “In such an environment, back office real estate investments were primarily geared towards adding individual work spaces, either in private offices or workstations, and improving space utilization.”
While the nature of the work that credit union back office teams undertake has evolved over the last decade from the completion of more routine and process-based tasks to the implementation of strategic projects by collaborative, multi-disciplined teams, many credit unions still make their office investment decisions primarily around dedicated work spaces for individual contributors and managers, according to Alguard.
Rethinking ROI
“The problem with this primary focus on individual productivity in the workplace is that it can cause credit unions to miss out on the even greater potential returns available through a focus on spaces that help strengthen connections and deliver an exceptional employee experience,” said Alguard. “By looking first at the strategic direction of their organizations within the current technology impacted market, and then through the lens of their people and their daily work activities, credit unions can begin to contemplate the larger back office investment returns available to them. These include better collaboration, faster innovation, easier talent recruitment, enhanced employee engagement, and even an improved member experience.”
Alguard listed three additional areas where CUs should be looking for a return on their back office investments:
ROI #1 - Innovation
“Perhaps the largest opportunity is to truly understand the impact of the credit union’s workplace design on innovation,” said Alguard. “There is a reason many of the world’s largest financial services businesses are transforming their workplaces into ones that look more like technology industry offices. They are trying to replicate the speed of innovation of technology firms. This means spaces that support faster communication, easier decisions, more widely shared ideas, and collisions between various sectors within the organization. This shift towards multi-disciplined collaborations and projects is the primary change in the nature of credit union work.”
ROI #2 - Talent
Mark Alguard
“Another reason the world’s largest FIs have mimicked technology company workplaces is because they are now trying to recruit many positions from the same talent pool,” said Alguard. “And even beyond highly skilled technology workers, credit unions are competing for people with higher-level management skills, problem solving abilities and creativity. The quality of the physical work environment is one of the quickest ways a potential job candidate can ascertain what it will be like to work for an organization.”
ROI #3 Employee Wellbeing and Engagement
“In failing to understand and accurately address the human needs of their back-office staff within their workplace, credit unions miss the opportunity to support a more engaged workforce, and less directly, could be impacting the experience of their members,” Alguard said. “Credit unions should expect to see tangible and intangible returns when they design their back offices with the wellbeing of their staff in mind. Good environmental design such as increased visual access to the outdoors, using natural finish materials, and improved acoustics have been shown to reduce employee stress and improve alertness.
“Using the environment to support the organizational mission and enhance the interpersonal connection between employees can improve employee engagement and instill a greater sense of purpose,” he continued. “By improving the experience of your team members, you increase the likelihood that they will deliver a great experience to your members as well.”
A Rule of Thumb
Alguard said that a simple rule of thumb is that the cost of the CU’s office staff is roughly 10 times greater than the cost of its real estate.
“Here’s a quick example using a credit union in Ventura County, California, that Momentum is helping deliver a workplace strategy. Class A office space in this market leases for $29 per square foot per year. Their average worker with salary and benefits of $80,000 per year working in their office building with a worker density of 250 square feet per person costs their organization $320 per square foot per year—or 11 times as much as the real estate,” he explained. “Having this insight helps credit unions orient their back office strategies towards ones with greatest positive impact on their people.”
Alguard said there is enormous payback for credit unions that shift their back office design thinking from one oriented around individual workspaces and space utilization, to one that supports the actual work being undertaken.
“The return can be measured in terms of improved innovation, better recruitment success, and a more engaged and productive workforce,” he said.