Workforce Housing For People, Planet And Profit

May 2014, Vol. 241, No. 5

Richard Rothaus, Research Associate, North Dakota State University, Fargo, North Dakota

Well-organized workforce housing can be a valuable partner for companies pursuing their sustainable development goals, as well as a component of long-term profitability.

Such housing can assist companies in recruiting and retaining skilled workers, as well as insulating workers from the daily life disruptions that are common in areas with insufficient or nonexistent infrastructure. Reusable modular structures offer a green building solution for housing, and have built-in conservation and cost-saving features.

Workforce housing also can offer essential services that reduce the environmental footprint of company operations, including wastewater treatment and transportation services. By providing an independent and largely self-sufficient infrastructure, such accommodations can significantly reduce negative effects on smaller communities caught up in rapid industrial development.

By addressing the triple bottom line (TBL) of social responsibility (people), natural capital (planet) and economic prosperity (profit), appropriate workforce housing can be an important component of both short- and long-term business success.

Natural And Social Capital
Structured workforce housing presents a valuable opportunity for companies to meet operational goals of sustainable development. Sustainable development has been recognized as necessary for medium- and large-sized companies to remain competitive in a global marketplace.

Successful businesses must be both “eco-efficient” (with the economic value added being proportional to environmental impact) and “socio-efficient” (with the economic value added being proportional to social impact).

In other words, long-term business success requires attention to not only short- and long-term economic capital, but also long-term natural and social capital.

Companies that ignore this reality run the risk of issues in supply chains, workforce availability and access to areas with desirable natural resources. Sustainable development is not an abstract principle, but a real component of 21st century business success.

This type of housing has its origins in the Texas oil booms of the 1930s and 40s, when oil companies attempted to address the untenable situations of workers living in squalor and small towns overrun and paralyzed by sudden population booms.

Well-organized workforce housing is an area in which businesses easily can address sustainable development goals. Such accommodations serve to protect the health and safety of workers, as well as the health and safety of the communities where companies do business. At the heart of long-term health and safety is sustainable development, as it helps guarantee clean air, water, land and communities for future generations.

‘Triple Bottom Line’

Well-organized workforce housing solutions address the three pillars of sustainable development: social, environmental and economic. For businesses, these translate into the “triple bottom line.” None of these can be easily substituted for the other:

Social Responsibility: Companies recognize they have a responsibility to be positive participants in the communities where they work. For remote industrial operations where workforce housing is required, the influx of workers and their effect on existing infrastructures is a focal point of community interaction and concern.

Good relationships with these communities are essential for continued operations in such areas, and quality workforce housing offers solutions to real problems. An influx of workers plays havoc with housing availability and pricing, often creating hardships for locals who can be squeezed out of the market. While this effect is perhaps inevitable in any boom economy, companies that use workforce housing keep the majority of employees out of the housing market, reducing the negative aspects of housing economics.

Workforce housing that’s professionally managed also can address major and very real infrastructure concerns. Workers, for example, do not overwhelm the existing water and sewage systems, because the housing provides its own. Further, local retailers aren’t overwhelmed, causing periodic shortages and long waits for goods and services.

One of the biggest, and largely unnoticed, benefits of such accommodations is reduced road traffic. Like water and sewage, road infrastructure is expensive and slow to catch up with a boom environment.

While the majority of the wear and tear comes from truck traffic, the thousands of workers also have a major impact, especially on traffic congestion, dust control issues and emissions. By getting thousands of workers out of private vehicles and onto buses and into van pools, workforce housing can be a strong contributor to reducing strain on local transportation infrastructure.

With reduced traffic and centralized living, quality workforce housing also directly addresses the safety and security concerns of employers, employees and locals. Companies that place workers in such accommodations effectively keep them in a secure and monitored environment nearly 24 hours a day.

Over the long term, these benefits help alleviate issues about pricing for housing and consumable goods, waits at stores and service industries, traffic issues and water quality. State and local governments are limited in their ability to address these issues, as they must exercise caution about overbuilding and overstaffing for a temporary situation.
Target Logistics living facility near Watford City, ND.
Centralized workforce housing, when done correctly, offers great assistance by providing the infrastructure when needed, and removing it when no longer needed. While the degree of actual vs. perceived impact on these issues can be difficult to determine, there is no doubt that the issues are quite real.

Natural Capital: Companies that require workforce housing are frequently focused on resource extraction and know the costs of wasting natural capital. Such accommodations can help these companies meet environmental protection goals by adhering to the standard principles of reduce, reuse and recycle.

Appropriate workforce housing uses multiple strategies to reduce consumption of resources in the living arrangements of workers. Some reductions are obvious: low-flow faucets, showers and toilets; energy-efficient washers and dryers; thermostat controls and energy-efficient lighting. When housing is supplied for thousands of workers, the reduction in usage of water and electricity can be substantial. So can savings.

Other reductions in the use of resources are less obvious but equally important. When providing centralized food services, workforce housing reduces the packaging and shipping used in feeding workers. Workforce housing providers also can be well positioned to collect cardboard, glass and plastics for recycling, something shift workers in makeshift housing are not inclined to do. Many lodging solutions provide centralized transportation for workers to job sites, replacing hundreds of vehicles with a handful of buses.

The greenest building is, of course, the building that is never built, and workforce housing that uses reusable modular structures is always a greener solution than building permanent structures for a temporary housing need.

When the structures are no longer needed at one location, they can be moved to another. Operated by Target Logistics, the Muddy River Lodge in North Dakota was moved there after serving as a housing facility for the 2010 Winter Olympics in Whistler, British Columbia.

Modular structures are also standardized, which means that not only the structures but also the parts within structures can be more easily reused. When all the sinks are the same, for example, it is easy to replace a broken one with a used one. Modular prefabricated buildings (for example, steel constructed housing) also are made out of materials much easier to reuse and recycle once a building has reached the end of its life cycle.

Wastewater treatment is often a major challenge for housing at remote industrial sites. When housing is decentralized, existing systems are not likely capable of handling the massive increase in gray water and sewage.

The result is a haphazard network of septic systems, overwhelmed local sewage systems, and questionable and illegal dumping practices. When worker accommodations are centralized, so too is the collection of gray water from cooking, bathing and laundry, as well as sewage. A responsible workforce housing provider is thus able to use the best available treatment techniques.

In North Dakota, Target Logistics proactively built its own state-of-the-art wastewater treatment facility, capable of treating 180,000 gallons per day, when it became apparent that the town’s existing infrastructure was insufficient to handle the increased volume from the housing facilities.

The wastewater treatment plant is located at the company’s largest facility, and wastewater and sewage from its other facilities are transported to the location for treatment.

With more than 4,000 beds spread across several facilities in North Dakota, this represents a sizeable effort. The facility also treats its sewage wastewater sufficiently so to reuse for other purposes, including road dust control and agriculture. The importance of this effort is emphasized when put into context: Tioga, the town closest to this facility, has a population fewer than 1,500 and relies on a lagoon system.
A typical dining area at a workforce housing location.
In an area that suffers from major water supply and treatment issues, Target Logistics quickly established a functional treatment system of a sort regional cities are now trying to build. Such an effort, associated with workforce housing, represents a major contribution in sustainable development.

Economic Prosperity: While a relative term, economic prosperity is the value created by the organization after deducting the cost of all inputs. Well-organized workforce housing is key to helping create and enhance this value – especially where housing and skilled workers are in short supply.

By developing and relying upon comfortable housing, good nutrition and an array of fitness and entertainment amenities for workers, companies gain multiple benefits. These include the ability to recruit and retain qualified staff and thus reduce personnel costs; reduce staff absenteeism and downtime by addressing housing hardship issues; motivate workers with housing quality superior to that locally available; and reduce costs by partnering with efficient and experienced workforce housing professionals.

Good Business Practice
Businesses of the 21st century should keep an eye on social justice, environmental quality and economic vitality. A focus only on the bottom line will no longer suffice, as clients, customers and the demands of regulation and the international marketplace require more.

The current market is driven not by compliance with minimal standards, but by delivery of superior product design and quality. At the same time, companies both small and large continue to incorporate ethical values and policies into business plans; these values are reflected by choosing of partners and suppliers that share similar value systems.

Rapidly increasing global communication has generated levels of transparency and accountability that cannot be ignored. Businesses, customers, employees and communities are increasingly insistent that the environmental impact of product and services be minimized.

An MIT Sloan Management Review notes that the benefits of sustainability can be intangible and hard to quantify. However, two areas of benefit are of particular concern:

• Consumers are willing to pay a premium for products associated with sustainable development efforts.

• Employee commitments to sustainability make it an important element in recruiting and retaining quality employees.

The study, which surveyed 2,600 executives, reports that 60% of companies that changed business models and had sustainability as a permanent agenda item added profitability from those sustainability efforts.

Conclusion
Sustainable development that addresses the “triple bottom line” is an important component of professional workforce housing for businesses in areas with insufficient infrastructure. Because workforce housing is a resource-intensive business, sustainable solutions are cost-saving solutions that increase profitability and lower housing costs for clients.

Many of the clients that require workforce housing solutions are involved in resource extraction and environmentally sensitive activities. By partnering with companies that prioritize environmental quality, these clients protect and enhance their own environmental quality standards and initiatives.

When managed properly, workforce housing also directly addresses two major social justice issues. First, it provides safe, affordable and healthy living conditions for the skilled workers who are essential for successful business. Second, it minimizes the effect of “booms” on existing communities, which is key to both continuing operations and upholding the industry’s responsibility of doing no permanent harm to the locations where it operates.

Author: Richard Rothaus is president of Trefoil Cultural and Environmental and a research associate at North Dakota State University. He has expertise in the history of housing and vernacular architecture, and has conducted historical and archaeological surveys in North America, Europe, Asia and the Middle East. As a researcher in the University of North Dakota Man Camps Survey Project, Rothaus continues to visit and document some of the best (and the worst) workforce housing solutions of North Dakota’s oil boom. He may be reached at rothaus@trefoilcultural.com.