Space Utilization and Right-Sizing Your Office
Space utilization is your workplace’s occupancy divided by its capacity. If you have capacity for 300 employees but only have 200 people working, you have a space utilization of 67 percent.
However, as companies have moved toward a more agile work environment, employees are spending more time working away from their desks. Most are working remotely at least once a week. Shared desks are replacing cubicles, which improves space utilization.
Many workplace leaders are still trying to catch up to these changes. They’re trying to “right-size” their offices to reach a better space utilization ratio. So what exactly is that ideal ratio? While there is no magic number, here are some important guidelines to consider.
Why Is Proper Space Utilization So Important?
Proper space utilization is one of the best opportunities workplace leaders have to control costs. Consider JLL’s “3-30-300 rule”, which states that for every square foot of space, the average organization spends:
- $3 on utilities
- $30 on rent
- $300 on payroll
While these figures are just archetypes, they are useful in providing an order of magnitude between the three areas of expenditure. They also illustrate how important it is to make the best use of the space you have.
Space is also one of the three most important components that make up the employee experience, according to Gartner.
A well-designed workspace allows employees to focus and collaborate effectively with each other. Simply put, it’s one that inspires them to do their best work. An office with poor space utilization does the opposite.
It makes it hard for employees to concentrate and work together. Ultimately, it can make it more difficult to attract and retain top talent.
How Big Is The Average Workstation?
The average workstation today is 40 to 50 square feet, about half the size it was less than a decade ago, according to JLL’s 2017 Office Outlook. This is important to consider when analyzing space utilization.
Everyone wants to avoid wasted space, but there’s more to facilities management than trying to cram as many employees as possible into every crevice. As a workplace leader, you should strive to strike a balance between achieving optimal space utilization and providing a positive employee experience. Employees need to feel comfortable in the space they have, and they need to have the flexibility to move around the office freely depending on the work they’re doing.
In other words, you shouldn’t only focus on the size of each workstation. You also need to consider how much space you have available for quiet work, collaboration and amenities to encourage activity-based working (ABW).
Finally, consider the utilization of specific spaces. According to an HOK benchmarking survey (highlighted in a recent Gartner report), the meeting spaces most organizations have available are not meeting the needs of their employees. As the chart below shows, the majority of meetings (73 percent) take place between small groups of 2-4 people. Large conference rooms designed for more than 21 people are used much less often.
Adding more space isn’t always the solution. Before you decide you need to invest in more real estate, consider what you can do to improve utilization of your existing spaces.
How Can We Improve Space Utilization?
There are several ways your organization can improve space utilization. Here are three steps we recommend:
1. Use IoT Sensors To Get Real-Time Space Utilization Metrics
As the old saying goes, you can’t improve what you don’t measure. And walking around the office doing headcounts to measure space utilization is like using a Slinky to measure a wall—it’s just never going to be precise.
That’s why more workplaces are using occupancy sensors to get accurate, real-time space utilization data and see trends over time. The data these sensor collect allows you to see which spaces are most underutilized so you can make adjustments as needed.
2. Promote An Agile Work Environment
It’s hard to maximize your office space when employees are still so attached to their own desks. And that’s the reality for most organizations today—three out of four workplaces still have assigned seating, according to the most recent CBRE survey.
However, more than half (52 percent) say they plan to phase in unassigned seating in the near future to encourage a more agile work environment.
An agile workplace strategy improves space utilization. Consider what happened when Sodexo moved into a new office and simultaneously adopted activity-based working (ABW.)
The new office was smaller by 1,300 square feet and had fewer desks. However, it gained a greater number of work spaces when it eliminated its traditional model of assigned desks in favor of reservation-based seating. The office went from a ratio of one employee per desk to 1.7 employees per desk—a significant improvement.
3. Use Workplace Technology That Reduces Uncertainty
It’s no secret that the concept of unassigned seating makes a lot of people uncomfortable. We’re quick to assume it’s because people are hard-wired to hate change. But what really bothers them isn’t necessarily change; it’s the uncertainty around the change.
An experiment conducted by the UCL Institute of Neurology compared the responses of people who were told they were going to receive an electric shock and those who were told they might be shocked. Those who were unsure about what to expect showed the highest levels of stress.
In the same way, employees have greater unease if they’re unsure about the logistics of an agile work environment. For instance, a department head might be worried about how she will effectively manage her team if they aren’t all sitting together or even in the same office. Another employee might be concerned he won’t be able to concentrate in a more open office environment.
It makes it easier for them to work remotely and share workspaces—which improves space utilization. It also gives workplace leaders the insight they need to keep facility management costs in check. They can request maintenance only when it’s needed and use intelligent sensors to reduce energy costs during off-peak hours, for instance. And while space utilization will always be important, it’s one step toward achieving a larger goal: reducing the per-person costs of running the workplace.
iOFFICE's space management software offers visibility into your entire real estate portfolio, making it easy to maximize space utilization. Ready to right-size your office space and start saving? Schedule a demo today!