Happy employees are five times more likely to stay -- and while remuneration plays a key role in employee motivation, there's more to employee engagement and satisfaction than that. For instance, the type of work environment you create can have a huge impact on your employees and business.

What are some of the types of work environments you could build for your business? And how come they're so important?

In this article, we'll take a look at the five most popular types of work environment, what they involve, and why focusing on them is important for your business.

Read on to find out more.

TL;DR:

• The physical and psychological conditions employees experience in the workplace define the work environment.
• The five most popular types of work environment are a comfortable work environment, traditional work environment, flexible work environment, remote work environment, and modern work environment.
• The key elements of a work environment include location, size and layout, equipment and furnishings, facilities, code of conduct, accountability and autonomy, communication, and leadership and development.
• Other elements that contribute to work environment include working hours, working arrangements, and workplace safety.
• A positive work environment can increase employee engagement and satisfaction, leading to higher productivity and employee retention.

Work Environment Defined 

A work environment is defined as the physical and psychological conditions that employees experience in the workplace. It's determined largely by factors such as the layout of office space, communication styles, interpersonal relationships, and organizational culture.

Every organization has its own work environment -- and while there might be some things you shouldn't do, there's a large variation in what you can and should do when it comes to building a healthy environment in the office (as well as remotely.)

Key Elements of a Work Environment

A work environment is not defined by one single element. Rather, it's determined by a series of components. Much like cake, the work environment is made up of different layers, and each layer has its own ingredients. And also like cake, one bad ingredient can ruin the entire thing.

Here are some of the work environment elements you should consider:

Location

The location of your office space can have a huge impact on your employees. If you pick an area that's too far away from public transportation and other workplaces, then people are more likely to be late and less likely to be productive. On the other hand, if you pick an area that's close to amenities, then it can act as an incentive for people to come into the office more often, be there early, and be more productive at work.

Size and Layout

The right office size and layout can also have a huge impact. If your office is too cramped and disorganized, then it can lead to clutter and create an unhealthy work environment. On the other hand, an office that's too large can make people feel isolated and disconnected.

Likewise, the entire office layout can have similar effects. If people sit too close to each other, it might make them feel like they lack intimacy (and like the boss is looking over their shoulders -- permanently). But if people are spread out too far, then it can create a disconnect between them.

Equipment and Furnishings

You don't need the fanciest furnishings and the latest equipment to create a healthy work environment. They can definitely play a role in increasing productivity, but what matters more is whether they're comfortable, safe, and enable your employees to do their best work.

Facilities

Parking lots, bike racks, places where people can buy lunch, and other facilities can make a big difference -- especially if your office is in a more rural area. Access to basic amenities such as showers and a cafeteria can make a huge difference in how employees feel at work.

Cultural Elements

Just like cake isn't made of batter only, the work environment isn't all about the physical space either. Cultural elements can play a massive role in the type of work environment you're building for your business -- and although they might sometimes be dismissed as gibberish on paper, these elements can end up making the difference between a workplace people love and a workplace people can't leave sooner.

Here are some of the cultural elements that tend to have a big say in work environments and how they're built:

Code of Conduct

A code of conduct or an employee handbook are essential components of any work environment. They define what's appropriate behavior, how employees should dress and act, and how any potential problems should be solved. Having this document in place makes it easier to set expectations and ensure everyone is on the same page.

Accountability and Autonomy

The balance between accountability and autonomy is essential to create a work environment that employees love. Too little of either can lead to demotivates, low morale, and lack of productivity. Too much can make people feel stressed and overwhelmed, like they don't have any control over their work. Finding the right balance is key to creating a healthy work environment.

Communication

This is another element that can have a big impact on how employees feel. If there are no channels in place for people to communicate, and if there are no rules as to how people should communicate, chaos can very easily ensue. Having a system for communication and making sure that everyone is on the same page about it can make a huge difference.

Leadership and Development

Finally, having strong leadership and providing employees with the right training can make a huge difference in how they feel at work. When people don't feel like their managers are invested in helping them grow, then it can lead to demotivation and lack of productivity.

Other Elements That Contribute to Work Environment

Aside from the physical space and the organizational culture, there are additional elements that can contribute to how employees feel in the workplace. A few of them include:

Working Hours

Giving people the flexibility to work the hours they want can greatly contribute to how people feel in their work environment. It can make them feel trusted, it can help them build work/ life balance, and it can make them more productive.

Working Arrangements

This is related to working hours, but different. For example, some companies offer the option for employees to work remotely or have flexible schedules. This can lead to a better work/ life balance and can give people more control over their lives.

Workplace Safety

Workplace safety is crucial to making your employees feel like their work environment is comfortable and secure. Having the right safety protocols, procedures, and training can make a huge difference in how people feel at their job.

Workplace Technology

Finally, having the right technology can be a game-changer when it comes to how employees feel at work. If they have access to all the tools they need to do their job well, it can make a huge difference in how they feel.

For instance, hybrid work software can help them organize their remote and in-office time better, without all the hassle of asking around, filling in complicated spreadsheets, or finding they've commuted for two hours just to get to an office that's already full.

Likewise, good communication software can help them stay in touch with their colleagues and make sure they're connected both when it comes to working tasks and when it comes to the little things that make workplaces, well, human.

Diversity and Inclusion

Having a diverse workforce can lead to many benefits for the company, but it can also greatly impact how people feel in their work environment. Build a workplace that makes everyone feel like they belong -- and it will make all of them keener on delivering their best work.

Recognition & Feedback

Regularly recognizing employees for their hard work and providing them with constructive feedback can help build a positive work environment. This can help motivate employees, create trust between the employer and the employees, and make everyone feel valued.

Types of Work Environments

OK, now that we've gone through the main elements of work environments, let's take a closer look at what types of workplace environments there are. Although the following is not by any means an exhaustive list, it can help you get an idea of which work environment might be the best fit for your team:

Traditional (Conventional) Work Environment

This type of work environment is characterized by a rigid hierarchy and tight control. It's typically found in large corporations, with very clear roles and expectations for all employees -- and although many organizations cling to this type of work environment, data shows that it tends to be less effective in motivating employees and boosting performance.

According to  Capterra's 2022 Flextime Survey, more than 70% of HR leaders think the traditional 9-5 way of looking at work is outdated. What's more, 79% of organizations have lost employees as a result of not offering flexibility.

"This is business, not a vacation theme park" is just not a good argument (not anymore at least.) Every year, organizations lose $450-500 billion to disengaged employees. On the flipside, companies with engaged employees are 21% more profitable too -- so ensuring your employees are happy and engaged is a business matter, no matter how you look at it.

Flexible Work Environment

A flexible work environment is not just about providing employees with flexible hours or remote work options, but also about giving them more freedom to decide how they do their jobs. It is closely related to the idea of self-management and can lead to improved performance and higher employee satisfaction.

According to Gartner, 43% of employees said that flexibility helped them be more productive at work. This shows that giving people the freedom to work as they please (even if that's a traditional 9-to-5) can pay off.

Remote Work Environment

A remote work environment is exactly what it sounds like: a workplace where employees don't have to be present in the office. It can range from full-time remote work to a mix of remote and on-site days, but its most important benefit is that it allows people to stay connected even if they're not in the same place.

Although not everyone might want to work remotely on a full-time basis, 92 million people in the United States (almost 60% of job holders) say they'd be happy with at least some remote days (which circles back to the aforementioned need for flexibility, actually.)

Activity-Based Work Environment

Activity-based work environments are characterized by their flexibility and the fact that they are designed to suit the needs of different types of employees. Unlike traditional work environments, workers can switch between different workspaces and projects easily without losing sight of their goals.

Hybrid Work Environment

Hybrid work environments are a combination of traditional and flexible work environments. They allow employees to be in the office for certain days, but also allow for remote work and flexible hours. This is ideal for companies that need to balance the benefits of having their employees in one place with the advantages of allowing them to work from wherever they are most productive.

Collaborative Work Environment

A collaborative work environment is a work environment where employees are encouraged to work together, share ideas and learn from one another. This type of environment puts more responsibility on employees to work collaboratively and efficiently, but it can also lead to more innovation and better results.

This type of environment is not mutually exclusive with a, say, hybrid, flexible, or remote work environment -- it's just another layer you can (and should!) add to your work environment.

Creative Work Environment

Creative work environments are designed to foster creativity and innovation, by giving employees the freedom to experiment with new ideas and express themselves freely. Most often, offices built as creative work environments will have plenty of open spaces and are often furnished with bright colors and interesting art pieces. Sometimes, they might not even look like traditional offices (at all.) Other times, creative work environments might "happen" remotely, but creativity will be fostered through the use of specific tools and processes.

How Can a Work Environment Impact Employee Experience and Productivity?

Employee experience and productivity are very tightly connected to the work environment. For example, here are some work environment examples that can affect employees' experience and productivity:

• Your office space does not have enough natural light, which makes employees feel tired and less productive.
• You prioritize rigid job roles, which can lead to a lack of communication among departments.
• Your company does not offer flexible working hours, which can lead to resentment from employees who are unable to work when they are most productive.
• Your business does not invest in employee development, leading to a lack of appreciation
• Your organization does not invest in inclusion and diversity, so some employees feel different or downright discriminated against, which consequently makes them leave and can lead to building a bad reputation as an employer
• Your office building does not offer bike racks, which means people who bike to work don't have where to leave their bikes while they're in an office, which makes them less environmentally-friendly

Of course, these are just some examples, but it's important to understand how different work environments can affect employee experience, productivity, and engagement. By taking the time to understand what type of environment your employees respond best to, you can create a workplace that works for everyone. Understanding this will not only make employees feel more comfortable and engaged in their jobs, but also help increase productivity and loyalty -- which, in turn, will help your business succeed.

What Type of Work Environment do Employees Love the Most?

Every employee is different -- and every organization too. There's no "perfect recipe" to building a thriving work environment, as different people will like, well, different things. In general, though, employees love when they:

• Are appreciated
• Have enough space, light, and comfort at work
• Have clear job roles
• Are given the freedom to express themselves and suggest ideas
• Can work around their schedules, or at least have flexible working
• Are accepted and embraced for who they are, rather than constantly trying to fit molds that weren't meant for those like them
• Are provided with continuous learning and development opportunities
• Feel like their contribution matters
• Are given the chance to collaborate, both within and outside of the organization
• Are paid well (no matter how good your benefits are, paying your employees fairly is still extremely important)

What Makes a Good Work Environment?

In short, what makes a good work environment is understanding and caring for your employees. That means, taking the time to get to know them, their needs, and what they value the most. It also means investing in their growth and development, providing them with the right resources, tools, and freedom to do their work, and creating a supportive environment that celebrates inclusivity, diversity, and collaboration.

A good work environment happens not overnight, but through the continuous effort put into the well-being of your employees. When this is done, employees will be happier, more engaged, and more productive — helping your business succeed.