Space Utilization Metrics: The Who, What, Where and How
Proper space utilization is one of the best opportunities workplace leaders have to control costs. Research shows the majority of organizations have average space utilization rates of 60-70%, according to a 2018 space utilization benchmarking report by JLL.
Well-defined space utilization metrics and dashboard analytics will offer you a quick glance at how your company is performing and if it’s on track to meet performance goals. But what exactly should you be tracking?
Getting Started with Space Utilization Metrics
One of your primary goals in investing in space planning software was likely to shrink the budget and increase profits, right? Before you start measuring and analyzing space utilization data, your first step is to gain a firm understanding of how the space is currently being used. In the planning stages of the software integration process, you should have identified your company objectives, both short and long term. Initially, this will ensure you align yourself with a company whose platform can help you realize those goals. Future metrics will help you determine how your actions measure up to those strategic objectives. These metrics will help illustrate how activities of the real estate and facilities group support tactical operational goals and provide reliable, objective data for decisions, budgets, and resource allocations.
What Are Your Overall Real Estate Costs and Terms?
Part of your ongoing duties as a facilities manager or real estate leader is to identify ways to trim the fat from your company budget. As more companies adopt agile practices like hot desking, hoteling and activity-based working, your real estate has become one of the most efficient ways to cut costs and increase spending efficiency. To do so, you first need to answer some basic questions regarding company real estate:
- What space does our company own and/or lease?
- What are the costs associated with this space? (Break it down into cost/square foot)
- If the space is leased, what are the terms of contract?
By understanding the total square footage, cost per square foot, total value, and lease terms, you are providing the building blocks for understanding how the space is used and where costs can be cut.
How is Your Space Being Used?
Now that you know how much space you have, it’s time to gather the information regarding how the space is actually being used. How is your workforce using the available space? Are employees highly mobile, so multiple occupants on a daily or weekly basis occupy the space? To gain an accurate understanding as to how the space is being used and by whom, you must have an accurate way of determining who is where. But first, you must determine how exactly you want your people, places, and things tracked:
- How do you want to track your employees?
- Do you want to track assets (e.g. computers, printers, furniture)?
- Do you want to tie assets to a building/workspace and/or individual employees?
Our clients have had success collecting data such as:
- Employee’s first and last name
- Department assigned
- Building or office space occupied
- Furniture or assets utilized
- The number of employees and contractors, as well as their locations
- The total number of spaces – offices, workstations, desktops, meeting rooms
- The number of occupied (claimed) spaces
- The percentage of actual space used
- The percentage of space used by department or user group
Gathering such information provides you an accurate head count and uncovers important information regarding actual usage of space. From there, you can use data from your space management software and occupancy sensors to determine if the space is being used efficiently. You can forecast against your company’s future goals to determine if you have too much space or not enough, and if a move or office redesign would be the appropriate action.
Additional Space Utilization Metrics To Measure
Not long ago, space utilization was a basic math problem. You would divide the total occupied space by the total available space to get your occupancy rate. However, this doesn’t account for the fact that many organizations today allow employees to work remotely at least part of the time. It also overlooks the fact that more than half of global enterprises have moved away from assigned seats in favor of a more agile workplace.
The new space utilization metrics you need to measure go beyond occupancy and vacancy. However, space occupancy is still an important foundation. What should you aim for? Here are two important foundational benchmarks to keep in mind:
- Each employee should have between 125 to 225 square feet of usable office space, according to general office guidelines
- 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.
Other space utilization metrics you choose to measure depend on what you want to achieve. For instance:
- If your goal is to minimize real estate costs, you would measure real estate costs per employee
- If your goal is to improve collaboration, you should measure conference room utilization
- If your goal is to improve operations, you should measure peak occupancy/vacancy rates
Tracking these metrics has the potential to save hundreds of thousands of dollars, depending on your real estate portfolio.
Space is One of Your Most Valuable Assets
Your company’s real estate isn’s just your second-largest expense, after employees. It’s also one of your most valuable assets. Your workspace directly impacts your company culture and inspires innovation and collaboration.
When developing workplace design strategies, it’s important to consider the needs of your workforce, as well as the culture you want to create. If you’re looking to encourage the workforce to collaborate on projects, an office filled with cubicles will not be the best use of space. Consider the big picture and remember that what’s good for one company, may be completely the opposite for another. Once you have implemented your new strategies, keep track of your progress by creating a space utilization metrics dashboard within your space management software.
You can monitor performance over time and revisit your strategy regularly. Remember that the needs of your team will evolve over time, so spatial analysis should be an ongoing effort.
Investing in the right space management software is the first step to measuring these space utilization metrics. Ready to see ours in action? Schedule a live demo today.