Trends in Government Workspace: New Generation of high-style and healthy workspaces - Jan 2017

By Jessica Chevalier

The U.S. government’s trend toward reducing its physical footprint and making more effective use of its space continues. While President Obama’s executive order #13693, (Planning for Federal Sustainability in the Next Decade), issued in March 2015, mandates leadership in sustainability and greenhouse gas emissions in built environments, manufacturers serving the government sector report that the momentum toward creating facilities that are healthy for both the environment and the humans working within them is fueled by conviction, not directives, and that creating environments that rival top corporate workplaces is viewed as key in attracting Millennial talent as the retirement of Baby Boomers continues and swells.

As we’ve documented across the sectors, an election often equates to a lull in business, particularly in non-incumbent elections. Instability in the political system typically means that both individuals and organizations breast their cash and simply wait it out before investing in upgrades. As one might expect, that same trend holds true in government, but to an even more significant degree because, in some cases, election results have a direct impact on who will be sitting where, come February. 

“In 2015, everyone was considering that 2016 was an election year,” says Peters, “That in itself puts a lot of uncertainty in people’s minds with regard to budgets and spending. People wonder, will my boss’ boss’ bosses even be around after the election, and what will they want [in terms of office space]? It leads to stagnation, and that has impacted the level of projects, especially new construction. New construction is few and far between.”

Peters goes on to explain that the federal government’s fiscal year ends September 30, meaning that August and September are typically the busiest month for flooring providers. Every eight years, however, that cycle changes, and in years such as 2016, with the presidency, House and Senate up for grabs, there is a strong likelihood that not only faces but also budgets will change significantly post election. 

Fortunately, all that uncertainly tends to dissipate quickly as everyone gets back to business as usual. In fact, Peters reports that he started seeing purchase orders come through again the week after the election and notes that, over the course of the last two years, local and state governments have significantly outspent the federal government.

Drake has high expectations for the coming year. “We anticipate a very strong 2017 for government flooring opportunities,” she says. “However, there is a great deal of uncertainty in the sector because we will be having a complete change in government, and the funding priorities are just now being developed by the transition teams for the incoming Trump administration. They will then have to go through an extensive review by Congress. It is widely anticipated that Defense will get additional funds, as will Veterans Affairs.”

Interestingly, as soon as election outcomes are final, savvy manufacturers and reps serving the government sector look closely at party agendas and causes to determine what agencies to court most heavily. Peters offers an example: “Under Republicans, the Department of Defense is typically highly funded, so we’re touching those people. We also pay close attention to what laws and bills pass.”

Keep in mind, however, that according to David Gerson, global marketing and communications leader for Interface, “Government is one of the smallest segments [for most manufacturers].” The category essentially comes down to government workspace as well as those categories of projects that are often partially funded through government monies, such as transportation facilities, convention centers and cultural and sporting facilities. 

Of course, government funds are often utilized for projects like Veterans Administration hospitals and clinics as well, but flooring manufacturers typically categorize those jobs under healthcare. 

Ross Leonard, corporate vice president of marketing for J+J Flooring Group, reports another current trend in the government market. “There is a dramatic increase of purchasing flooring independent of the GSA contact,” he notes. “There is no inherent difference between GSA and non-GSA products. It’s just that the GSA has a requirement that the product has to be offered at a preferred price. This eliminates the need for a competitive bidding process.” Products on the GSA list do have to undergo wear testing and must meet heavy or severe use standards on the Texture Appearance Retention Rating (TARR) rating system. 

Peters reports that federal, state and local governments are also moving toward strategic sourcing initiatives. “Any supplier that can deliver as many things as possible is much more advantageous to partner with. Being able to offer carpet, ceramic, LVT, sheet and wall base is much more of an attractive procurement model than offering a single product, because of the cost associated with doing bids and RFP procurements, even the work. It’s a more efficient way of doing business, and the government is moving that direction quickly.”

New construction in the government sector has been in a lull over the last couple of years. In its 2017 Dodge Construction Outlook, Dodge Analytics reports on the public building sector, which includes public administration facilities-the segment we’re discussing here-as well as capitols and courthouses, police, fire and detention centers. “Tight fiscal conditions have caused this sector to decline in seven of the past eight years, and starts are expected to fall again in 2016 before turning modestly positive in 2017,” the report states. “After reaching a historic high at 51.8 million square feet in 2007, starts slid 73% to just 13.8 million square feet in 2015. This year [2016], public building starts have continued to backslide.”

This isn’t a surprise, really, considering that the General Services Administration (GSA) introduced its Total Workplace Initiative in September 2013 with the goal of cutting costs, increasing productivity and greening office space, largely with downsizing and facility consolidation as a primary means to meet the program’s goals. 

In fact, a video promoting the Total Workplace Initiative asks, “Did you know that eliminating just 100 work spaces can save an organization more than $1,000,000 a year?” and explains that “moving from isolated and outdated offices to shared space encourages collaboration, helping to increase productivity,” adding that “a smaller footprint means a small environmental impact.” The program focuses on both the financial and environmental advantages of optimizing the workplace to suit modern work preferences, fully embracing the flexibility that today’s technology enables. 

The GSA itself consolidated from three buildings into a single renovated space, and reports that the move saves it $24 million annually in real estate costs, in line with the initiative’s first guiding principle, “Be good stewards of the American taxpayer’s dollar.” The GSA’s renovated headquarters, which previously housed 2,200 employees, now houses 4,000 using flexible workspaces and telecommuting in lieu of assigned offices. 

But that could change with the new administration, explains Sandra Drake, director of business development for Mohawk, adding, “The rate of renovation versus new construction will be determined by agency budgets set with the next appropriations bill, and that timeframe is March at the earliest. We have seen that renovation is more prevalent than new construction. Rehabilitation of existing spaces has been the majority of our project involvement.”

While new construction has been slow, flooring manufacturers report that there has been activity on the renovation side, and, on most of these projects, government agencies are implementing modern, open-office style designs that, literally, tear down walls and push flooring to the forefront as a design element within the space. 

Nick Peters, vice president of government and healthcare strategic accounts for Shaw, explains the impact of the GSA’s efforts. “Over the last two years, the federal government has been working to reduce its footprint and more strategically use the space that it has and needs, similar to corporate downsizing,” he says. “The government is more effectively using space in buildings that they own and getting out of some leases. This does create some project work, as they transition from traditional cubes to shared workspace, benching and telecommuting.” Ultimately, Peters points out, this might yield work at the present but will reduce total square footage in the long run, and that, of course, is not good news for the flooring industry. 

In addition to the GSA’s initiative to help federal agencies go green, President Obama’s executive order mandates that “Federal Agencies shall, where life-cycle cost-effective, beginning in fiscal year 2016, unless otherwise specified, promote building energy conservation, efficiency, and management by reducing agency building energy intensity measured in British thermal units per gross square foot by 2.5 percent annually through the end of fiscal year 2025, relative to the baseline of the agency’s building energy use in fiscal year 2015 and taking into account agency progress to date. ” In addition, the order sets goals with regard to clean energy use and water reduction in government facilities. So, while government is viewed as a slow moving dinosaur in many respects, with regard to embracing the sustainable built environment, it seems to be on the right side of the latest trends. 

As one would hope, the government prioritizes American-made and/or fair-trade products for its specifications. Peters reports that that ideal does have loopholes, however. For instance, a company can partially manufacture a product abroad and ship it into the U.S. to complete it. If it substantially changes form, it is considered American-made. As an example, a flooring manufacturer might make the face of an LVT product abroad and then ship it to the U.S., where it chops the material into planks and attaches backing. It is then considered an American-made product.

While all the government’s focus on sustainable metrics is, of course, well and good, one must never overlook the most important element of the workplace: the worker. No longer can corporations-public or private-deny the advantages of healthy workplaces. While factors like reduced water and energy usage and reduced greenhouse gas emissions have long dominated the sustainability conversation, the human side of sustainability is just as important. Healthy, happy humans are more productive employees-that is a fact-and today factors that were once sometimes viewed as distractions or unnecessary expenses-like daylighting, views of nature and collaborative work areas-have proven their ability to increase morale and productivity. 

Consider the California Energy Commission’s case study (Windows and Offices: a Study of Office Worker Performance and the Indoor Environment) of a Sacramento call center in which two different inquiries were conducted at the same organization, the Sacramento Municipal Utility District. According to the commission, “The first study looked at 100 workers in an incoming call center, whose performance was continuously tracked by a computer system and measured in terms of time to handle each call. The second ‘Desktop’ study examined the performance of 200 other office workers on a series of short cognitive assessment tests, taken at each individual’s desktop computer. Extensive data was collected about the physical environment at each office worker’s cubicle. The Desktop study also included a questionnaire about workers’ comfort conditions and health symptoms. Better access to views consistently predicted better performance in both the Call Center and Desktop study. Daylight levels and ventilation rates were found significant in a few of the statistical models tested. The studies have shown that indoor environmental conditions can have a measurable relationship to changes in office worker performance and have established a range of likely effect sizes that other researchers can use to refine the needs of future studies.”

Specifically, “workers in the call center were found to process calls 6% to 12% faster when they had the best possible view versus those with no view. Office workers were found to perform 10% to 25% better on tests of mental function and memory recall when they had the best possible view versus those with no view. Furthermore, office worker self-reports of better health conditions were strongly associated with better views. Those workers in the Desktop study with the best views were the least likely to report negative health symptoms. Reports of increased fatigue were most strongly associated with a lack of view.”

In many ways, this is a two-fold benefit for businesses: employees perform better in the short-term as well as in the long-term. Happy, less stressed employees stay in their jobs longer, and what’s more, happy, less stressed employees breed other happy, less stressed employees. The advantages are both ongoing and, in many ways immeasurable, but that doesn’t mean they aren’t real. So often the intangibles, after all, are what truly matter in the long run. 

“The government was an earlier adopter of LEED Silver for all new projects,” says Gerson. “Now it’s moving into Delos Well Building Standard-human centered design-and using biophilic design strategies to address that.” The influence of biophilic design, using materials that evoke the feelings of nature, obviously plays a role in flooring specification, and Gerson speculates that, for example, the meteoric rise of LVT, at least in part, can be attributed to specifiers seeking natural looks at reasonable first cost. 

“No matter how much we rely on technology, we are still human,” says Gerson. “For millions of years, we were deeply connected to circadian rhythms. When you have people who are deeply connected to nature, suicide and depression rates plummet. Disconnection from natural systems yields depression and mental illness. The good news is that there have been forward-thinking academics and scientists and corporations that have looked at 40 years of research on well being, and we are now starting to incorporate that into the built environment. Companies like Google and Facebook might have funded the research, but now everyone is starting to apply its principles. I always say that the government wants to be first to be second. It doesn’t want to spend money on what doesn’t work, but after an idea’s tested, it will dive in.”

The manufacturers with whom we spoke had varying ideas on the importance that lifecycle cost plays with regard to flooring specification. Natasha Appel, a Texas Crossville rep, says she is seeing a trend away from “price only” and considering lifecycle costs and maintenance. And, in fact, she is even seeing a movement toward specification of larger format porcelains, including Laminam, which are on what she calls the “expensive side” of the spectrum. And Gerson believes that lifecycle considerations play a large part in the rise of LVT, noting that one of the product’s most appealing features is that it doesn’t require waxing or polishing. 

However, Peters points out that, with leadership changing, it’s difficult to chalk up any anticipation with regard to lifecycle anyway, adding, “You would hope that, from a sustainability standpoint, products would be installed for nothing less than 15 years, until the colors are out of style. That’s the hope, but we do realize that changes. I have seen products go on the floor and come out eight months later because of leadership changes. Some customers are more savvy, and they are looking at lifecycle cost-the Center for Disease Control is running an entire new exercise for flooring specs to understand what it means to be in a healthy building-but then you have others who care only about up-front cost. They have X budget and hope that the product plays into their lifecycle initiatives-but really only want to tick it off the list.”

Van der Kruik believes that lifecycle value does play an important role in government specifications and notes that he sees this as carrying more clout than material content. Sherry Dreger, vice president of marketing for Bentley, adds that product transparency is important as well. 

Of course, all these changes both impact and are driven by design, and contemporary design is much less defined by sector lines than it once was. Today, the common areas in major medical centers takes cues from hospitality, and hospitality environments, in particular guest rooms, are going more residential. Similarly, government offices are no longer plain-jane cubicle farms in shades of grey. Instead, in many cases, government spaces are as dynamic as privately funded corporate projects, leaning more toward Silicon Valley than Office Space. Says Todd van der Kruik, vice president of design for Bentley Mills, “The trends we are seeing in institutional and government work are the same as what we’re seeing in places like healthcare and hospitality. They’re moving away from stodgy carpet into more contemporary office type looks. I feel like it’s all sort of merging together.”

Gerson describes the current style we’re seeing across many sectors, including government, as “resimercial,” wherein designers are incorporating residential design into the commercial environment. “The resimercial trend is starting to work its way into government,” Gerson adds. “Although government won’t be the first to the party [with regard to design], it is trying to create workspaces that are modern and also a good use of taxpayer funds. Sometimes trends actually serve both those purposes. In resimercial styled space, you don’t have an office with carpet wall to wall; you can have different work styles, communal spaces, different layouts depending on the different types of work being done. We’re not only seeing this in corporate and tech, but also seeing these changes in hospitality, insurance and even banking firms: an area of carpet under tables with polished concrete or LVT underneath that. The days where every office is wall-to-wall carpet are gone. The pendulum is swinging quickly to mixed materials throughout.”

In government, a significant driver for modernizing offices comes down to attracting talent. In 2014, Partnership for Public Service, which has the goal of encouraging a new generation of Americans to enter federal service, determined that more than half of the government’s 2.1 million employees were Baby Boomers, and Baby Boomers, in all job fields, are retiring at a rapid rate, with an estimated 10,000 of the total 76.4 million leaving the workforce each day. 

Faced with a narrowing workforce, the government must attract a new generation of employees. The Millennial generation, those ages 20 to 36, is 83.1 million strong and in the early stages of their careers; however, their mindset regarding work is much different from that of the retiring Baby Boomers. The Millennial worker simply isn’t interested in ticking off eight hours a day in an uninspiring atmosphere toiling in an uninspiring job. In relation to offices, that means that they want more: more style, more flexibility, more amenities, more access to natural light, nature and outdoor space.

As a result, design in government sector office space is more important than ever before. “The government sector is absolutely competing for talent,” explains Gerson. “We have a massive bubble with the Baby Boomers retiring. Within government, that is a huge deal. In the public sector, the threat of a massive part of the workspace retiring over the next five years is huge. The government needs to replace ranks and wants to bring in Millennials, so they are having to create spaces that are equal to or more attractive than other options. In Human Spaces’ Global Report, one of the questions was ‘Does design of the workspace affect your decision to work for one employer or another?’ Thirty-three percent of respondents said, ‘Yes, it would influence my decision to work for one employer or another.’ We have to create a place where people feel inspired and happy. Workspace has a lot to do with that. If you give people access to daylight and elements that remind them of being in nature within the space, it stimulates brain function, but if you put them in a stale beige box and close them off from elements of life, you will have a disengaged workforce and a hard time attracting talent.”

Peters agrees, adding, “If you look at the Federal Aviation Administration or the Defense Advanced Research Project Agency or the National Security Agency, the people they are attracting are 18 to 21, incredibly smart, tech folks, the same people that Google and Cisco are going for. So if you think a plain floor with drab furniture will get people in to stay, you will miss the mark. If you look at the projects we’ve both won and lost, they are designing like the Silicon tech sector, fun, making it look like a major corporation. There are places that have conservative decisions makers who want something with little pattern, something more muted and grey, but that is a different employee”

Ben Saylor, national sales vice president–government for Tandus Centiva and Tarkett, notes that the initiative to cater to the new generation of workers isn’t a new endeavor. The GSA has been studying the work preferences of the group since some Millennials were in kindergarten. He continues, “The GSA is looking for ways to make the workplace inclusive, to bring in a mix [of workers] from all generations and put together an optimized work construct that will serve each agency’s mission, but designing it as a collaborative space where it will not just enhance productivity but also the quality of life and the workspace experience. If you walk into a cube farm, it doesn’t help your morale, but when you walk into a beautiful workplace-with ambient light, a level of collaboration, cutting-edge design-it improves productivity, morale, health and wellness.” And wellness is, in essence, what the government is seeking to build.

“Workplace transformation in federal government is ongoing,” explains Saylor. “The fed government, in particular, takes some hits and justifiably so, but the great people that I work with in the federal government are exerting great leadership in moving to high-performance buildings that reflect the changing nature of work and generational shifts that are optimally suited for workplace employees.”

Technology plays a significant role in making this possible, Saylor points out. Even ten years ago, having a large portion of the workforce telecommuting wasn’t practical. Today, it is. Saylor, a retired Marine colonel, points to Kansas City’s GSA branch, which moved from its former location-stricken with sick building syndrome-to a new facility that is, by requirement, 30% smaller. They put people on virtual work, and the workspaces that they have aren’t assigned to individuals. They are hoteling spaces. When employees are coming into the office, they have to call in to reserve a space. “Advances in IT have enabled this,” says Saylor. “We didn’t have the technology to make it work even ten years ago.”

Natasha Appel, Crossville’s sales representative for the Houston and San Antonio markets, notes that smaller spaces have not typically equated to smaller staffs. “Lots of big government systems are consolidating their resources, consolidating their space, from multiple offices into a single location. They’re not doing layoffs; they’re just getting cozy.”

The manufacturers with whom we spoke don’t expect to feel many changes with regard to government sector activity under President-elect Trump, in large part because working smart is something we can all agree on. “It serves the American public that the government is not bloated,” says Saylor. “The Trump team has talked about eradicating [Obama’s] executive orders. That could have an impact on the margins, but most of the things that we’re talking about have enduring value. Reducing energy usage doesn’t have a political party. Key drivers will not be impacted by politics. It goes back to what is best for the American taxpayer. In terms of environmental stewardship and establishing a workforce across the generations, that is going to endure. Also, there’s too much energy behind this. This is about good Americans doing great work. There’s so much momentum to this movement that the legislators would have to catch up. We’re ahead of their headlights.”

Gerson believes that the grass-roots nature of the environmental movement will keep it moving forward. He explains, “I will say that our clients, who have been on the cutting edge of addressing sustainability issues, the carbon footprint and climate change, are more fired up today to make a difference than they were [before the election results]. They are more aware that ‘we the people’ need to take action. I’ve always liked the saying, ‘There is no parade that a politician wouldn’t want to lead.’ If we create a movement, the politicians will have to take our side or get out of the way. Our clients are more passionate than ever about making progress on climate change through material specs. Architects In Action has grown very rapidly, and I think you’ll see this more and more. It’s just like we did with LEED. That wasn’t government led. It was the people and the populace.”

“When cube farms disappear,” says Saylor, “the floor plane gets exposed.” And in these spaces, the onus of design-with windowed outer walls and few interior dividers-falls heavily on the flooring. For these environments, says Saylor, “we no longer design to the carpet square but to the floor plan, because that’s where aesthetic value comes from. It creates a more visually appealing result.”

While government office spaces were primarily installed with carpet in the past, today the move is toward mixes of hard and soft flooring, which is the same general trend that we see in retail, hospitality, senior living and corporate workspace, among others. 

“There is still a need for carpet for acoustics, warmth, color, pattern and design,” says Gerson. “But people are looking for what’s next, and that’s how we can utilize LVT, natural looks, new mixed material type looks with carpet. Carpet might be inset in workstations, used to define reception or conference areas, maybe in management offices. Carpet is not going away, but the way it is used is changing. Today, it’s not one single color, not one single product.”

Peters agrees that hard surface is taking share and believes that this trend is driven by the government’s central criteria with regard to flooring specification, which are budget, maintenance and sustainability. “What could be easier than a bucket and mop?” he asks. “And, in all honesty, the technology has continued to get better. On the hard surface side, we’re now able to offer cool new designs and incredible performance, things that, five years ago, resilient planks and sheets didn’t offer.” 

Along with that, Leonard notes a strong move from broadloom to modular tile on both federal and state funded projects. He believes several factors are driving this transition: first, that the cost of modular is so much more competitive that it once was; second, because modular comes in boxes rather than on rolls-something that can make a significant difference in a old building with small elevators and narrow stairwells; and, third, because of the ease of maintenance and durability that carpet tile offers. 

In addition to serving the employees who work within them, well-designed, healthy government spaces also serve the American people and, ultimately, the earth-and those big-picture concepts are something that Saylor never loses sight of. “I approach everything as an American taxpayer,” he says. “I want to understand my customer, across all federal agencies, the pressures they feel, the challenges. They are working under executive orders-these are not suggestions but hard requirements that have become more strident over time-and I have to come in as a solutions provider. I advocate for public-private partnership that works to solve problems facing the American taxpayer-and offer solutions that are sustainable. That has goodness all over it. It serves everyone.”

What’s more, Saylor is passionate about turning the discussion from simple sustainability-which focuses primarily on elements like recycled content and VOCs-to the big-picture concept of workplace wellness and earth wellness. “‘Sustainable’ is the wrong word now. That was cutting edge ten or 15 years ago, but today it’s about environmental stewardship, wellness, healthy buildings. I love the old saying, ‘We do not inherit the earth from our ancestors; we borrow it from our children.’ If we don’t pass along a better environment than we inherited, shame on us.”

Copyright 2016 Floor Focus 

Related Topics:RD Weis, Mohawk Industries, Interface, Crossville, Shaw Industries Group, Inc., Tarkett