Cost–benefit analysis of a staff recreation centre project: build or lease? – A Case Study

Monica Singhania

Abstract

This case study aims at comprehensively assessing a decision by XYZ Ltd (name withheld due to confidentiality), New Delhi, on whether to build or to lease a recreation centre for its rank-and-file employees. Based on a cost–benefit analysis, we concluded that the centre should be built since the company would recover its investment within 11 years. Apart from the financial considerations, the recreation centre could be considered a long-term investment in employee morale, as it would lead to a better quality of life for the staff and their families, and is likely to enhance their sense of belonging and improve productivity. To date, what little space there is available for hosting family functions is reserved for the use of the officers, and only officers and their families are invited to most company functions. Thus, the other employees feel neglected by the management. Hiring a community centre external to the organisation for a function would involve spending a lot of money as the company is located in a prime real estate area where the cost of land and rentals is huge, and sometimes even availability is an issue. Most of the staff cannot afford such places and are generally under a lot of stress whenever they have a family function. This, in turn, tends to affect their productivity.

 

Keywords

cost–benefit analysis, build, lease, employee morale, work–life balance

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