Are You Measuring Space Occupancy & Space Utilization?
The key to plugging the financial drain and maximizing workspace performance is by establishing better insight into two key metrics: space occupancy and space utilization.
Aside from the cost of employing your workforce, office space is likely one of your organization’s largest investments. It also tends to be the most difficult to manage. With greater mobility and remote employment opportunities, business leaders are having an increasingly difficult time identifying wasted space and gauging the efficacy of space utilization.
But it’s nearly impossible to forecast the spatial needs of a facility over time without measuring space occupancy and space utilization, which means planning for the future feels a lot like guesswork.
Cut back too much real estate and you risk creating efficiency and productivity issues, not to mention an uncomfortable work environment that leads to poor employee satisfaction or high turnover rates. Let too much space go unused, and your organization is throwing away money on utilities, maintenance and property expenses that aren’t contributing to revenue or the health of your bottom line. Poor spatial use can also lead to collaboration issues and prevent your organization from developing a strong company culture.
We work in an incredibly competitive market that demands a lean, optimized and efficient operation. If the space doesn’t fit the bill, productivity and revenue will undoubtedly suffer, and so will sustainability. But many facilities leaders aren’t exactly sure how to begin tackling the issue of space management. It starts by understanding these two important metrics.
Space occupancy refers to the number of people in an office at a given period of time. Knowing this metric is important because it will determine how much space your facility actually requires to support its staff. To figure amount of space required, facilities managers (or workplace leaders) must know:
- Total building capacity
- Employees utilizing the space
- Square footage of workspace
Generally speaking, each employee should have anywhere from 125 to 225 square feet of usable office space. Of course, the nature of their job will determine if their spatial need is on the lower or higher end.
It sounds simple, but facilities managers can’t accurately reach square footage per employee without first knowing the facility’s true occupancy. And this isn’t as easy as it sounds (but we’ll get to that).
Space utilization refers to how often a space is used, who uses it and why it’s being used. Knowing this metric is important because it will help improve headcount accuracy and uncover important details about the actual purpose and priority of space. With this insight, workplace managers can determine whether space is being efficiently used to serve current and future business goals.
Here are a few key questions that will help you evaluate space utilization:
- How big is your average workstation? (The average workstation today is 40-50 square feet, according to JLL's 2017 Office Outlook.)
- What is the ratio of employees to workstations?
- Is it possible for some employees to share desks if they aren't in the office every day?
- How often are conference rooms being used? (According to HOK's 2014 Benchmarking Report, the average conference room utilization is only 23 percent.)
Before you can take steps to improve space utilization, you need to know your baseline numbers.
Why Both Metrics Matter
You cannot make educated decisions about spatial requirements, forecast for the future, budget, support operational goals and find opportunities to cut costs without reliable and objective data about who, how and when space is being occupied and utilized.
These two metrics complete the full picture of what is required of a facility. But here’s the catch: You can’t accurately obtain one metric without the other.
Let’s say you’re trying to figure out your facility’s current occupancy percentage. Your workplace has a capacity for 300 employees, but currently only employs 200 people. By dividing the number of current employees (200) by the facility’s capacity (300) we get an occupancy percentage just shy of 67 percent.
Seems simple enough, right? But this metric isn’t as clear-cut as you might think.
As mentioned above, an increasing number of organizations are opting into flex scheduling, or providing work-from-home opportunities. In other words, only a fraction of an organization’s total staff is likely on-site utilizing the facility at one time. Which means space utilization plays a major part in the true occupancy metric. Without understanding how space is utilized, the occupancy metric becomes an assumption instead of an approximate measurement.
How to Accurately Measure Both Metrics
Sure, you could tirelessly take laps around your facility with a pad of paper and pen, marking down attendance, counting heads, noting what people are doing and where … or you could implement space management software, which allows you to visualize space and provides the ability to report on actual space use. This, coupled with scannable badges or wearables allows you to track activity and generate a far more detailed report about how many occupants your facility supports throughout the day, where they spend the most time and how they use different spaces.
From these reports, you can determine if space is being utilized efficiently, if employee needs are being met by their environment, and if there is an opportunity to upgrade or downsize to increase productivity or decrease cost.
The more you know about the way your space is currently used, the better you can plan for the future. Take time to better understand your space utilization and space occupancy, and you can improve your bottom line.