The Million Dollar Dilemma Every CRE Leader Faces
As a corporate real estate leader, you often feel like you’re balancing two conflicting goals—managing costs, and improving the employee experience.
And you’re doing it on a massive scale.
The average Fortune 500 company has real estate equivalent to 10 Empire State buildings. Real estate is the second most expensive asset for most companies, worth millions of dollars. But the largest expense for most companies is their employees—and keeping them happy is just as important as controlling costs.
In a recent webinar, Ari Kepnes, Director of Market Research for Density, said the key to solving this million-dollar dilemma is to pay close attention to one very important metric:
Space utilization data.
Why Space Utilization Data is So Important
As management guru Peter Drucker famously said, “you can’t manage what you can’t measure.”
Eighty-three percent of CREs say space utilization data is their No. 1 most valuable metric for making decisions, according to a recent Gensler survey.
Kepnes said there are three main ways CRE, HR and facilities leaders are using it:
- Plan – Using predictive analytics to better manage real estate portfolios
- Access – Using employee experience apps to help people navigate and use space more efficiently
- Operate – Using IoT sensors to monitor use of facilities
That makes space utilization data valuable not only to CRE leaders, but to many people within your organization. Here’s a closer look at how it adds value.
3 Ways to Use Space Utilization Data
Better Space Planning
Forty percent of corporate real estate is empty but paid for. And 89 percent of CREs aren’t satisfied with their use of space.
To make improvements in this area, you first need visibility into space utilization data.
Space utilization data can answer questions like:
- How is each floor, room and building being used?
- What locations are not being utilized as well as they could be?
- How are people typically using different areas of the space?
Because this fluctuates throughout the day in an agile work environment, the only way to get real-time space utilization is to use IoT sensors.
However, the potential to save money with better space planning is huge—making sensors well worth the investment. Kepnes said if the size of real estate shrank as much as the headcount, the Fortune 500 would save $107 billion annually, equal to the cost of 1 million employees.
Visualizing Space Availability
Fifty-five percent of employees don’t have access to space they need.
While having to scramble for space obviously hurts the employee experience, there’s another reason corporate real estate leaders should care about this. A lack of space availability has a huge impact on productivity.
Consider this shocking statistic from Gartner:
$31 million is wasted on employees looking for an open room each year, equal to 200 employees being paid just to look for space.
Let that sink in for a moment.
Surely there’s a better use of your employees’ time!
As we get more workplace amenities, real time availability becomes even more important. People want to see how busy it is in certain areas so they can better plan their day.
Having data on real-time space availability can answer questions like:
- Which rooms are booked but actually free?
- How busy is the gym?
- What’s the best time to go to the cafeteria?
Improving Facility Operations
CRE leaders and facility managers need to be able to adjust building operations based on occupancy. For instance, if only a fourth of your workforce comes into the office on a typical Friday but your employee cafeteria has enough food to feed an army, you’re going to end up with a lot of waste.
Similarly, keeping every light on and heating all 10 floors of your building when 75 percent of them are empty isn’t very cost-effective.
With real-time space utilization data, you can answer important questions like:
- What areas actually need to be cleaned this week?
- How much food should we order?
- How should we adjust our heating and cooling systems to match occupancy?
In the changing world of corporate real estate, space utilization data is one constant leaders can rely on to help them make adjustments in real time. With a data-driven workplace, leaders don’t have to choose between providing a great employee experience and keeping costs in check.