Everyone is looking to cut costs right now. They’re making lists of cap-ex and op-ex spends deemed nonessential, and sending them to the chopping block.
This is the reality right now: We’re in a crisis situation, and many (if not all) companies are looking for ways to cut costs. Even here at Devic Earth, we’ve gone through every department and looked at what tools or services could be avoided or negotiated for a lower price.
Did you know that there’s an underappreciated source of cost savings for your business floating all around you?
Clean air using Pure Skies can help you improve the output from your available resources, with an investment that not only pays for itself in 12-18 months, but gives you more.
Strictly talking only business, how can you save money – or make money – with Pure Skies? We’ll show the way.
We’ve also included a handy Return on Investment calculator at the end to help you assess the dollars and cents you gain from clean air.
Have you read?
Profit in times of stagnant or no growth: Is it possible?
Let’s take one of the most important components in business – profit. In simple terms, profit is the excess revenue generated over and above expenses incurred.
Let’s look at a hypothetical level of profit in times of zero growth. Actually, it's not hypothetical: it's happening right now! Both expenditures and profit margins are getting squeezed.
As you can see from the figure below, reducing expenditure in the name of eking out more profit would lead only to financial stress for any business.
Profit = f (R, E) = Revenue – Expenses
Figure 1: Profit in time of stagnant or zero revenue growth. For a normal business, the positive difference between the revenue and expenditure translates to profit. During an economic downturn when additional revenue generation is zero, the growth in profit is also zero. Continuing in such a manner can not only erode profit but also lead to financial stress.
The downside of cost-cutting
The immediate response by any business in an economic downturn is to reduce expenditure. This is good business sense.
But cost-cutting has its dark side. When expenditure cutting is done via reducing salaries, selling off assets, or laying off employees, morale plummets and company culture takes a beating.
True – sometimes businesses have no other option but to cut costs in order to survive. But is there another way to cut costs that we’re missing?
Cutting costs with your most important assets: Your employees
Cutting salaries, furloughs, and layoffs are 3 common ways employers look to reduce labor costs. There's another way that most employers forget: Clean air.
Clean air gives you two important but overlooked benefits in cutting costs: Increased productivity, and reduced days lost due to illness.
Figure 2: Minimizing expenditure directly helps improve profitability, more so in difficult times. Here the dotted red line indicates reduction in expenditure, which directly translates to additional profit (green, dashed-line). This reduction in expenditure can be achieved in several ways including the improvement in air quality.
Clean air cuts cost by reducing employee sick leaves
Did you know that better air quality helps reduce employee sick leaves? Poor air quality can be a major cause for short term sick leaves (to the tune of 35%), according to studies from Statistics Norway Research Department, World Green Building Council, and the Mensura survey (Belgium), among others.
Simply put, every employee's sick leave saved translates to improved profitability.
Clean air in your business premises can save you money by reducing days of work lost to sick leaves, while increasing productivity (and profitability!) at the same time.
Devic Earth has helped several companies consistently reduce their employee sick leaves, just by providing cleaner air.
Case Study 1: An office space in Koramangala, Bangalore
An architectural firm in Bangalore installed Pure Skies to bring clean air to their 8000 sq. ft. office. “We’re 100 feet away from the main road, and right next door to the local composting station,” said the owner.
Air quality improved by 70% within 2 months, which made the employees and clients happy. These improvements persist for more than a year after installation (Figure 3).
Figure 3: Comparison of indoor and outdoor PM10 levels. The area in red indicates the baseline levels where indoor and outdoor PM10 levels were similar. The green area indicates the time when Pure Skies is functional, which shows a significant divergence in the indoor PM10 levels from the outdoor PM10 levels.
Within 3 months, the owner and his team saw a drop in employee absences by 11%, compared with the same period of the previous year (Figure 4). These benefits were sustained over the course of the next year.
Figure 4: Reduction in the number of sick leaves due to improved air quality; a comparison for the same month of consecutive years; Year 1 without Pure Skies and Year 2 with Pure Skies providing clean air.
Case Study 2: A Fortune 500 company in Bangalore
A leading manufacturer of industrial and environmental machinery installed one Pure Skies system each, inside both their factory and their offices to improve air quality. Levels of PM10 – particulate pollutants associated with cancer as well as diseases of the heart, lungs, and other systems – were quite high throughout their premises.
Within a few weeks of installation, Pure Skies improved PM10 levels by 50%, thanks to our AI-powered smart technology which optimizes Pure Skies’ performance in real-time.
Two months after installing Pure Skies, the customer saw a 13% year-on-year improvement in employee sick leaves (Figure 5). They have an average of 650 employees on payroll.
The cost savings with Pure Skies to this customer was more than ₹ 4,00,000 each month, realized through reduced sick leaves and increased productivity!*
* Based on this company’s employee salary expenditure and the productivity of similar Fortune 500 companies.
Figure 5: A comparison of sick leaves between the same month of consecutive years, with and without Pure Skies for clean air. The number of sick leaves showed a decline of 13% year-on-year.
Minimize expenditure by increasing employee productivity
Over and above the reduction in the absence rate, better air quality also leads to better employee productivity. Multi-year studies from leading research organizations including Harvard, University of Southern California, and Columbia University have shown that employee productivity is improved by 5% - 8% when workspaces have better air quality (AQI<50), which in turn increases the profitability of the company by 1%.
If that's not good business sense, we don't know what is.
A solution that pays for itself and more
Combining the financial benefit derived from reduced employee absence rate and increased productivity, on average, is about 20% over and above the investment on the state-of-the-art Pure Skies air pollution mitigation solution.
The typical time to recoup the investment is 12-18 months, depending on the number of employees. After that, Pure Skies provides continuous cost savings.
Calculate your ROI with Pure Skies
Generating profitability at any time is the result of careful planning and execution.
To help you assess the financial value that can be derived from improving the air quality in your premises using the world’s most advanced air pollution mitigation solution, Devic Earth has made available a customized Return on Investment calculator.
This custom calculator indicates
the combined benefit derived from reduced absence rate and improved productivity,
the average return on investment and
the time taken to recover your investment, post which you enjoy pure savings.
With simple inputs, you can see the financial returns derived from investing in clean air.