Why workplace ambience matters

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For organisations competing in a knowledge-intensive economy, sustainability cannot be defined only in environmental terms. It must also include the capacity to sustain workers and the value they create. A central but underappreciated factor here is ambience – the air quality, temperature, lighting and soundscape of the workplace.

Sustainably designed office ambience is not just about reducing energy consumption or meeting green standards. It directly influences employee wellbeing – and, through wellbeing, the productivity and performance of the firm.

The World Health Organization estimates that 12 billion working days are lost every year to depression and anxiety, costing the global economy US$ 1 trillion annually. Employee wellbeing is not only a human concern but also a strategic one: it affects absenteeism, turnover, motivation and ultimately the sustainable deployment of human capital. Ambience is a lever through which firms can address this challenge.

Three key dimensions of the physical work environment

In a recent Journal of Management research paper, I and my colleagues from Singapore Management University and Carnegie Mellon University produced a comprehensive framework drawing on architecture and urban design principles to analyse the impact of physical spaces on people. This framework suggests that physical work environments are experienced across three key dimensions:

1. Ambience: The atmospheric characteristics that make a space habitable and safe; including temperature, lighting, humidity, sound, air quality, and views. Contributes to the overall comfort and wellbeing of occupants, affecting physiological and cognitive processes.

2. Spatial configuration: The spatial layout of a workspace (including height, width, length and the relationships between these dimensions) and the organization of space, such as room adjacencies, wall partitions, circulation patterns, workspace layout, and furniture arrangement. Influences occupants’ movements and interactions.

3. Aesthetics: The sensory (e.g. textures, colours), compositional (e.g., finishes, materials), and design elements (e.g. repetition, focus and balance) of the physical work environment and the choice of furniture and furnishings. Creates an inviting and stimulating environment that impacts affect or psychological states.

Among these, ambience is most directly tied to sustainability. It has a dual role: supporting physiological health (air quality, lighting, noise) and psychological wellbeing (mood, stress, energy). For wellbeing, ambience is especially important from both perspectives.

Physiologically, it influences processes such as respiratory function. Psychologically, it affects emotions in ways that can have immediate implications for performance. Stress from noise, smells or other sources of overstimulation can quickly undermine focus and cooperation with co-workers. Wellbeing, in turn, determines how fully employees can bring their skills and capabilities to bear on tasks.

The mechanism is clear: ambience impacts the effective deployment of human capital, which then affects firm outcomes. Firms that invest in ambience not only improve day-to-day employee experiences: they also enable long-term performance. Employees working in environments that reduce stress and promote health are more engaged, more creative, and less likely to burn out or exit. These effects accumulate to affect turnover costs, knowledge retention and the ability to deliver value consistently to clients and stakeholders.

Two key themes: task accomplishment and resource position

These physical dimensions influence firms’ internal and external stakeholders at all levels (individual, group, organisational and external environment). Diving deeper into this process, our study reveals two main themes to consider: task accomplishment and resource position.

With regard to task accomplishment, spatial features that foster encounters and access can either facilitate or hinder work processes, depending on the strategic goals and context. For example, well-designed lighting may improve concentration and motivation, while poorly planned layouts can slow collaboration.

The physical work environment also shapes the firm’s resource position, from tangible resources (real estate and operating costs) to human capital acquisition and retention, and intangible resources such as reputation and employer brand. Open-plan layouts, for instance, may conserve resources through efficient space use, but if they undermine focus or increase operational and maintenance costs, they can erode both tangible and intangible resources. In this sense, your office ambience is a strategic variable, not just a facilities concern.

The work environment and neurodivergence

Wellbeing is especially critical for inclusivity and access to talent. Research shows that as many as 15% to 20% of the world’s population exhibit signs of neurodivergence. Historically seen as a weakness, neurodiversity (differences in brain function and behavioural traits) is increasingly being seen as a potential organisational strength. It brings new perspectives, creativity, innovation and unique problem-solving skills to the table – yet these capabilities can only be fully realised when the work environment supports them.

It’s also important to note here the relationship between the physiological and the psychological. Take noise, for example. It’s a nuisance to most people, and such disturbances can affect our motivation and willingness to give of our best at work. But for some neurodivergent individuals it can be literally incapacitating in the work space. Firms that overlook these realities risk unintentionally excluding valuable contributors. Designing ambience to accommodate diverse needs not only enhances employee wellbeing but also unlocks unique contributions that are difficult for competitors to replicate.

Balancing investments for sustainable performance: the “well building”

Both the above themes have potential positive and negative organisational implications. Strategic leaders must weigh their trade-offs in ambience investments. For example, installing a new lighting system may improve employee motivation and attitude (task accomplishment) but, by increasing operating expenses, it may weaken tangible resources.

Striking the right balance is essential to avoid undermining overall firm performance. The concept of the “well building” is being adopted increasingly to design physical workspaces that not only promote sustainability and ergonomic efficiency, but also support mental and emotional health for all users. Many organisations are now producing proprietary standards that firms can adopt. The WELL Building Standard is one such, providing specific, practical guidelines for organisations.

The WELL Building Standard

(Source: https://standard.wellcertified.com/well)

Green design elements such as natural light and plants can improve employee physical and mental health, motivation and attitudes, while enhancing work processes at individual and group levels. They can also enhance human capital acquisition and confer intangible resources such as industry and community goodwill.

The key here is agency: giving the individual a measure of control over their physical environment on the one hand, but in such a way that it respects sustainability initiatives on the other. It’s one thing to feel a little chilly in the office, but having no ability to do anything about it makes you feel powerless, too – which is never conducive to good mental wellbeing. When aligned with sustainability goals, this agency not only improves daily experience but also fosters commitment and reduces turnover risk, reinforcing the long-term value of the firm’s human capital.

Ambience as a strategic sustainability lever

Ambience directly influences employee wellbeing, and through wellbeing, firm-level outcomes. Leaders who see ambience as part of their sustainability agenda – rather than as a secondary facilities concern – can build stronger, more resilient organisations. By sustaining the conditions under which human capital thrives, they not only advance social and environmental sustainability but also secure long-term competitive advantage.

Dive deeper: Read Dr. Oyedeji and her colleagues’ research paper Physical Work Environments: An Integrative Review and Agenda for Future Research.