Emerging technology paired with evolving end-user demands has forced manufacturers to develop new offerings that meet these demands. Real-time data monitoring and a heightened focus on environmental regulation will slowly shift the commercial HVAC industry to a maintenance business model relative to the traditional replacement model. A maintenance business model will lead to greater recurring sales, more opportunities to interact with the customer and create additional value for commercial HVAC businesses.
Expectations Have Risen: End Users Expect Customized Solutions & Health First Mentality
The pandemic has changed how all Americans view life, and along with this came a heightened focus on a “health-first mentality”. In a recent survey, ~74% of Americans feel anxious when entering indoor spaces due to poor air quality problems, and this has created new opportunities for IAQ (indoor air quality) within the commercial HVAC industry.
The workforce is evolving as baby boomers retire and Generation Z enters the workforce, and along with this transition comes a workforce that has heightened demands and expects them to be met. Commercial building owners and businesses will have to accept these evolving demands, as salaries and benefits account for ~90% of business operating costs. Companies have invested to meet workers’ demands in the following items: ergonomics, technology, and free snacks; however, IAQ remains a critically overlooked item. Indoor air has been proven to be 2 to 10 times more polluted than our air, pollutants that enter a building are circulated through the HVAC system. Poor IAQ has gained such popularity, that it has an illness linked to it “Sick building syndrome” and this leads to employee absenteeism.
Absent employees create a financial cost to companies and are estimated to be ~$2,000 and ~$2,500 for the private and public sectors respectively. There is clear evidence that better IAQ can reduce employee absenteeism rates by 15% to 40%, reduce employee healthcare costs by ~1% annually, and increase employee productivity by ~$6,500 annually. The costs of improving IAQ may seem expensive initially; however, improving a building’s IAQ increases employee productivity by >120%. There is a breadth of lower-cost alternatives for building owners to meet these demands (ex: localized HEPA filters, and advanced sensors), which do not require a costly retrofit of the current unit in place.