SOFTWARE INC.

FITNESS CENTER ANALYSIS 2017

Prepared by Daniel Hanek

Human Resources Manager

Report Distributed December 3rd, 2017

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Software Tech Inc. Fitness Center Analysis 2017

ABSTRACT
Many companies have implemented features or programs into their workplace to promote a
healthy working environment. One such feature is an on-site fitness center for the employees to
use during their time here at the office. This report looks at whether a company of more than
200 employees should consider building an on-site fitness center. The report reviews the
positive effects (examples include: reducing health insurance costs, and increasing overall
employee productively/satisfaction), negative effects, design and risks to the project. The report
goes into detail how the construction of the center would be cost effective; what it would offer
and how it would generate revenue for us.
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Software Tech Inc. Fitness Center Analysis 2017

TABLE OF CONTENTS

ABSTRACT 1

TABLE OF CONTENTS 2

TRANSMITTAL 3

EXECUTIVE SUMMARY 4

ANALYSIS OF A WORKPLACE FITNESS CENTER 5

INTRODUCTION 5

POSITIVES 6

NEGATIVES 7

DESIGN 8

RISKS 9

CONCLUSION AND RECOMMENDATIONS 9

REFERENCES 10
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Software Tech Inc. Fitness Center Analysis 2017

TRANSMITTAL

MEMO
SOFTWARE TECH, INC.

To: Aaron Walsh, Director of Human Resources

From: Daniel Hanek, Manager, Human Resources
Subject: On-Site Fitness Center
Date: 11/20/2017

Dear Mr. Walsh,

Enclosed with this document is an extensive report on the findings and effects a fitness/health
center would do for us here at the office. This project will positively affect us by reducing health
insurance costs, increasing employee satisfaction/productively, and reducing employee
absenteeism.
This report outlines the estimated costs of building an on-site fitness center (either inside the
office or in a separate building connected via tunnel), and the financial and physical benefits. An
addition of a fitness center to our office complex would benefit us.
I hope you find this report informative and seriously consider the idea of a fitness center to the
office. I know many of the employees here at Software Tech would be eager to see this project
come to fruition. If you have any questions, comments or concerns please feel free to reach out
to me any day during the week (Monday Friday 9am to 6pm) at the office, or contact me via
phone number (630-800-6666) or email (danielhanek@email.com).

I look forward to hearing from you soon.

Sincerely,

Daniel Hanek
Human Resources Manager
Software Tech, Inc.
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Software Tech Inc. Fitness Center Analysis 2017

EXECUTIVE SUMMARY
This report goes over the extensive research of a fitness center addition to our office here at
Software Tech. The construction and implementation of an on-site fitness center will improve
the wellbeing of our employees, reduce the cost of health insurance for our company, improve
company culture/community, generate revenue and increase employee satisfaction and
productivity in the workplace. The report also goes over any possible negative effects a fitness
center might have on our office, along with any risks in the construction/implementation of an
on-site fitness center. The design of the fitness center is taken into perspective as well, based
what would benefit us the most for our company and what its current needs are.
So, what are the benefits of a fitness center? There are many benefits to having a workplace
fitness center for the company and her employees. For the employees, that includes: increased
health benefits, workplace satisfaction, productivity and overall wellbeing. Employee positives
also include a better sense of company culture, encouraging employees to workout at the office
makes the workplace feel a little less stressful and more welcoming. For the company, an on-site
fitness center would improve the office buildings worth, along with granting a prestige to our
company. Granting a prestige to our company would increase our chances with prestigious
employees wanting to work for us, as well as decreasing our turnover rates. Many people see an
on-site fitness center as a great benefit for working somewhere, and in some cases, it is the
deciding factor for choosing a place of employment.
Of course, with many positives, a few negatives are involved as well. Initial cost of construction is
our biggest negative. Although it is a short-term negative, building an on-site fitness center can
be costly if done with the wrong contractors and designers. Luckily, our team has received great
references and recommendations on who to hire for the construction process at a cost-effective
level, reducing the overall cost of construction. A long-term negative effect is just the general
cost of water bills from shower rooms, maintenance and hiring a full-time staff to oversee the
fitness center. Personal trainers and a small full-time staff are necessary for the fitness center to
be as effective as projections estimate it to be in the future.
For the design of the fitness center there is two ways we can go about the construction of the
new fitness center: adding onto the office building, or building from the ground-up near the
office. The cheaper option is to build a separate building in the parking lot, connected to the
main office via tunnel. Although while a cheaper initial cost seems tempting, building directly
into the office building will grant a much more condensed and effective fitness center,
encouraging employees to use the center much more if it were in a separate building.
And lastly, the risks of a fitness center. Like any business proposition, an on-site fitness center
involves some sort of risk to it. The main risk is that the fitness center would not be used very
often and by only a few employees. This is why it is stressed earlier in the design section that
building into the main office building would be much more beneficial in the long run. It almost
forces employees to pass by the fitness center, encouraging them to use it. Another solution to
this risk is allowing non-employees to use the gym at the charge of a membership fee. A
membership would also help generate revenue for the fitness center, further increasing the
benefits of the center to our company.
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Software Tech Inc. Fitness Center Analysis 2017

ANALYSIS OF A WORKPLACE FITNESS CENTER

INTRODUCTION
The workplace is changing, with so many new
types of industries and workers the common
workplace of cubicles and desks are becoming a
thing of the past. Some of these changes are a
result of technology, others have come about
because of shifting perspectives and
expectations. Old-school workplace policies
have been transformed or have even been
thrown out completely, taking its place are
more teamwork focused environments with
open doors and more transparency. Companies
are becoming communities, focusing on
relationships between fellow co-workers and
superiors, rather than purely on the tasks being
given. As a community of around 200
employees, Software Tech has grown
significantly in the past 10 years. The office has
grown too, but not nearly as fast as our
employees needs and expenses. As mentioned
in our quarterly meeting in fall of 2017, health insurances costs are increasing making it harder
to budget ourselves in this economy. According to the data from the CMS (Center for Medicare
and Medicaid) National healthcare expenditures rose 5.3 percent in 2014 to $3 trillion, or $9,523
per person, accounting for 17.5 percent of gross domestic product (Becker, 2016).
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Software Tech Inc. Fitness Center Analysis 2017

So, what can we do to fix this problem? How can we shrink our long-term expenditures in
healthcare for our employees? The answer is simple: to increase and promote employee health
to reduce the cost of healthcare. According to a Quantum Workplace report, employees are 14
percent more engaged when provided time off to recharge, 10 percent more engaged when
provided healthy food options, 18 percent more engaged when provided time for healthy
activities, and 18 percent more engaged when provided a flexible schedule (Merhar 2015). By
increasing employee health standards our cost of insurance would go down, while at the same
time increasing employee productivity and attendance.
A fitness center at the office would be our best solution. According to the NIH (The National
Institute of Health), unhealthy adults spend 42 percent more directly on healthcare costs than
adults who are at a healthy weight (NIH, 2017). With a healthy outlet at the office, like a fitness
center, employees would be able to focus better on their work (increasing productivity) and feel
more rested at home (reduced absenteeism). The fitness center would also offer classes on
healthy living habits and practices (examples like; dieting, exercising, proper sleep cycles, etc.)
that would positively affect our employees and reduce our health insurance costs at the same
time. An on-site fitness center would cater to our employees needs while staying very flexible
with their schedule, allowing them to remain unstressed and healthy while at work.

POSITIVES
There are many benefits that come along with the addition of an on-site fitness center for our
office. These benefits apply to both the company and the employees that work for us. First, how
does this benefit the company? The company would benefit from an on-site fitness center in
many ways, like for example, the presence of a fitness center in our office would attract very
qualified people to work for Software Tech, it would also help us retain our current employees
better (decreasing turnover rates). Benefits like a workplace fitness center generally are big
incentive for people to work at a company, sometimes its the deciding factor. Top companies
like Twitter, Google and Facebook offer gyms and health exercise classes as some of their big
perks for working at their company.
Secondly, employees would
benefit greatly as mentioned
before. Regular physical
activity can help keep your
thinking, learning, and
judgment skills sharp as you
age. It can also reduce your
risk of depression and may
help you sleep better.
Research has shown that
doing aerobics or a mix of
aerobic and muscle-
strengthening activities
three to five times a week
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Software Tech Inc. Fitness Center Analysis 2017

for thirty to sixty minutes can give you these mental

health benefits. Some scientific evidence has also
shown that even lower levels of physical activity can
be beneficial. Keeping mentally and physically sharp at
work is important, as it directly correlates with
increased productively in the workplace. Also, not only
does physical exercise reduce the chance of
depression and other mental illness, it also decreases
the chance for cardiovascular diseases. According to
the Center of Disease Control (CDC), Heart disease and
stroke are two of the leading causes of death in the
United States. But following proper health regiments
and getting at least 150 minutes a week (2 hours and
30 minutes) of moderate-intensity aerobic activity can
put you at a lower risk for these diseases. You can
reduce your risk even further with more physical
activity. Regular physical activity can also lower your
blood pressure and improve your cholesterol levels
(CDC 2015).
However, for employees who simply do not have the
time or the energy to work-out every day can do
something much simpler like, for example, taking short
walks. Even a thirty minute walk a day helps reduce
depression, the chance for heart disease and
strengthens bones and joints. Not to mention it
increases attention and decision making in the brain.
Any form of exercise added to a persons regiment is positive no matter how you look at it.
People are only more likely to start exercising if it becomes convenient for them to do so. If there
are not any practical ways of achieving this exercise people are most likely to not do it. The
addition of an on-site fitness center would help with that issue perfectly. By appealing to all
types of exercise, it makes getting healthy accessible to anyone, no matter the predisposition
they are in. Making exercise convenient and prevalent in our employees lives is the key to
reducing costs of health insurances at the office.

NEGATIVES
With the large assortment of positives given with an on-site fitness center there is a few
potential negative sides to the project. To begin, the initial cost of building a fitness center will
be large, considering the fact the fitness center will require a large amount of space and
equipment inside. Shower rooms will also need to be installed, adding to the cost of water bills
and maintenance. Overall our biggest short-term expenses will be the construction of the facility,
and purchasing the equipment for the gym. We also need to know what our employees will be
interested in using so we know what equipment to buy. These prices can vary depending on
what you plan to buy and how much, some machines and sets of equipment are far more
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Software Tech Inc. Fitness Center Analysis 2017

expensive than others. Moving on to long-term costs, our biggest long-term costs will be
maintenance of the facility and its equipment. Hiring a full-time staff in charge of the fitness
center would be required as well. Not to mention, some of the staff would need to be trained
health experts or personal trainers to teach employees how to properly work out and maintain a
healthy lifestyle.

DESIGN
There is two ways we can go about the construction of the new fitness center: adding onto the
office building, or building from the ground-up near the office. If we choose to add onto the
office complex it would allow employees to get to the fitness center faster and create a more
prestigious feeling to the office building (forcing us to upgrade some parts of the office as well).
It would also provide a much more condensed design, enabling us to be much more efficient in
the construction process. Our second option is to start from the ground up with a separate
building inside the parking lot, connected via tunnel to the main office building. Construction
would be initially cheaper if we started from a separate building, this would also mean we can
build a slightly bigger fitness center. A bigger fitness center means we have more space to add
onto other features like, for example, a swimming pool.
The suggested design for the fitness center would be to add onto the office complex. While
initial construction costs will be more, employees would see the fitness center everyday while in
the office, increasing their chance of using the fitness center. Its crucial that the fitness center is
being used and known to employees or else the center would not yield as much positive results
for Software Tech as projections estimated.
Seen to the right is the
current design for the
on-site fitness center.
Showers would be
centralized, to allow easy
access for employees
before and after
workouts. Studio
classrooms in the back
for classes and personal
lessons with employees
to encourage and teach
healthy lifestyles and
techniques. A small
reception/caf in the
corner, along with a child
daycare area for
employees who wish to
visit the fitness center
with their children after hours.
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Software Tech Inc. Fitness Center Analysis 2017

RISKS
Of course, like any other business decision there are risks involved in building an on-site fitness
center, although they are few in number. Our biggest risk is spending all our money on building
this facility, whether we decide to go with a separate building or inside the office complex the
initial cost will still be large. Although with proper planning, good reviews and references on who
we hire for constructions, the initial building cost should not be an issue to be worried about.
Secondly, a risk that could very well happen if this fitness center is not implemented properly is
that the center could be scarcely used except by a couple employees occasionally. We need to
assure to employees that this will not only save them money on health insurance costs, increase
their health, but it will also be an inviting and enjoyable experience for them. Having well
rounded staff and good equipment is a sound investment to assure the fitness center remains in
use for it to produce revenue in the long run. Another way of generating revenue for the fitness
center is by creating a membership program for non-employees to use the gym. Charging a base
rate of around $20 a month, with a 40$ starting fee is generally the average amount for a well-
rounded gym or fitness center.

CONCLUSION AND RECOMMENDATIONS

Software Tech is a growing company, and as our team of 200 employees grows so must our
community. The construction of an on-site fitness center would greatly benefit us here at the
office. Many of the employees at Software Tech no longer wish to hold up the traditional cubicle
office style, instead the age of group collaboration, and team building is upon us. With more and
more millennials entering the workforce, companies need to adapt to the different types of
workers out there today. A fitness center would add to our company community, while at the
same time reduce our health insurance costs, and increase employee satisfaction and
productively.
As stated before, building the fitness center inside the office complex would allow its effect to be
much more effective in the long run rather than building a separate building in the parking lot.
Good equipment, amenities and full-time staff in the fitness center would also ensure its
effectiveness to our employees.
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Software Tech Inc. Fitness Center Analysis 2017

REFERENCES
Becker. (2016, September 13). 17 statistics on the current state of US healthcare spending, finances.
Retrieved December 01, 2017, from https://www.beckershospitalreview.com/finance/17-
fascinating-statistics-on-the-current-state-of-us-healthcare-spending-finances.html

Carter, B. (2014, July 31). The Cost of Building a New Fitness Facility. Retrieved November 25, 2017,
from http://www.clubindustry.com/design/cost-building-new-fitness-facility

CDC. (2015, June 04). Physical Activity and Health. Retrieved November 25, 2017, from
https://www.cdc.gov/physicalactivity/basics/pa-health/index.htm

CMS. (2017, June 14). NHE-Fact-Sheet. Retrieved November 25, 2017, from
https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-
reports/nationalhealthexpenddata/nhe-fact-sheet.html

Hunt, T. (2016, October 25). 4 Fundamental Workplace Changes of the Last 20 Years (R., Ed.). Retrieved
December 03, 2017, from http://www.successful-blog.com/1/4-fundamental-workplace-
changes-of-the-last-20-years/

Ogden, C. (2017, August 01). Overweight & Obesity Statistics. Retrieved December 01, 2017, from
https://www.niddk.nih.gov/health-information/health-statistics/overweight-obesity

Smyth, A. (2017, June 03). How Much Has the Workplace Changed in The Last 10 Years? Retrieved
December 02, 2017, from http://engageforsuccess.org/much-workplace-changed-last-10-years

Zoldak, A. (2017). How to Start My Own Gym Business. Retrieved December 01, 2017, from
http://smallbusiness.chron.com/start-own-gym-business-4854.html