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Space Utilization

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You’re an experienced corporate real estate leader who faces monumental challenges every day. Your professional life pivots between making long-term strategic plans and addressing last-minute crises—like finding space for the 50 new employees just hired to support your company’s new product line.

The job was difficult enough when most employees worked in the office every day. The number of desks occupied at any given time was a key measure of real estate ROI. Today, in your agile work environment, space utilization fluctuates on a daily basis. Many employees work from home several days a week, but not always at the same times. Consultants and contractors are constantly coming and going to supplement the full-time workforce. 

On top of all this, your executive team continues to stress the importance of becoming a world-class workplace with an exceptional employee experience. Your goals are no longer only centered around minimizing costs and maximizing profitability. You now need to balance that with maintaining comfortable, inspiring workplaces that are well-stocked with all the modern amenities today’s employees have come to expect.

These are complex challenges, but they all start by answering basic questions about space utilization.

This resource will help you assess your current space utilization and develop a strategy for improving it using the right metrics, technology and policies.

What Is Space Utilization
and Why Does It Matter?

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.

That means their space is underutilized 30%-40% of the time!

Space utilization refers to how often a space is used, who uses it and why it’s being used.

The physical space is also one of the three most important components that make up the employee experience, along with your technology and culture, according to Jacob Morgan, a leading researcher and author of The Employee Experience Advantage.

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CULTURE
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TECHNOLOGY
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PHYSICAL SPACE
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EXPERIENCE

Your office design and how the space is used influences the kinds of interactions employees have throughout their day.

JLL Managing Director Ed Nolan calls these “accidental collisions.” In a recent WorkDesign article, he explains why they are so important:

“These chance meetings encourage employees to connect in ways they wouldn’t otherwise and can lead to surprisingly impactful results. In fact, unexpected conversations create opportunities for collaboration between unlikely partners and generally foster a happier, more productive workforce.”

This pays off in a big way. Jacob Morgan’s research found companies that invest heavily in the employee experience are four times as profitable as those that don’t. In other words, your space is the foundation of your workplace experience, and the way employees use it really matters.

If there are many physical barriers, employees are less likely to have casual conversations and impromptu collaboration—the kinds of encounters that can lead to breakthrough innovations. On the other hand, an entirely open concept office can stifle collaboration and productivity. When employees don’t have the quiet space and privacy they need to focus on deep work, they’ll either shut out their surroundings with headphones or avoid your office altogether.

A well-designed workspace allows employees to focus and collaborate effectively with each other. Conversely, an office with poor space utilization makes it hard for employees to concentrate and work together. Ultimately, it can make it more difficult to attract and retain top talent.

JLL Office snapshot
JLL Office Snapshot

JLL Offices of Indianapolis
- Photo courtesy of Office Snapshots

So how can you maximize your employees’ potential by making the most of your space?

Space Utilization
Metrics To Measure

Not long ago, space utilization was a basic math problem:

total
available space

ex. 100 desks available

Total
occupied space

ex. 60 desks occupied

occupancy rate

60% occupancy rate

However, this overlooks many factors in today’s evolving workplaces.

For instance, it doesn’t account for the fact that most organizations allow employees to work remotely at least part of the time. Or the fact that more than half of global enterprises have moved away from assigned seats in favor of a more agile workplace.

It also ignores the reality that office space utilization varies from one industry to the next. The way a large financial institution uses its space may be vastly different than a creative agency. 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 benchmarks to keep in mind:

125-225ft2

Each employee should have between 125 to 225 square feet of usable office space, according to general office guidelines.

40-50ft2

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 may vary depending on what you want to achieve. For instance,

If your goal is to...you would measure

Minimize real estate costs......................Real estate costs per employee

Improve collaboration..............................Conference room utilization

Improve operations...................................Peak occupancy/vacancy rates

Enable agile working.................................Employee-to-desk ratios

Plan for future growth.............................Space utilization by department


Tracking these metrics has the potential to save hundreds of thousands of dollars, depending on your real estate portfolio.

Here are just a few examples. . .

How Sensors Saved One Company $300,000

With many of its salespeople on the road instead of at their desks, one global organization wanted to see exactly how its work stations were being used. The company used VergeSense sensors to study usage patterns and discovered almost half of its spaces weren’t in use at any given time. To improve space utilization, the company moved from a fully assigned arrangement to one where work stations were freely assigned, with a 1.25 to 1-seat allocation.

This simple change saved the organization more than $300,000 a year — on a single floor!

Troutman Sanders Offices of Atlanta - Photo courtesy of Office Snapshots

Law Firm Achieves Scalability With A Flexible Real Estate Strategy

Troutman Sanders is a fast-growing law firm that now has more than 1,100 attorneys in 23 offices. When the company built its new headquarters, it was 100,000 square feet smaller than the previous building. Looking at past space utilization, the firm’s leaders decided it didn’t need as many private offices, and it didn’t need different sizes for partners versus associates. It opted for a more open concept with uniformly-sized private offices around the perimeter so the smaller space would serve their needs, no matter who was in the office. It also standardized the office furniture.

“When I'm looking in different markets with our firm, flexibility is something that we're really keen on because we aren't sure what the business of law is going to look like in a few years. We may think that we're going to grow a lot, but there could be some technological changes that keep us at the same number of people.”

-Joseph Geierman, Director of Real Estate & Facilities, Troutman Sanders

An example of phone booths to better utilize space.
- Photo courtesy of Office Snapshots

Improving Conference Room Utilization With Sensors

Having the right mix of collaborative and private spaces is critical to a great employee experience. Yet the conference rooms most organizations have available aren’t meeting the needs of their employees. With the goal of improving conference room utilization, a global organization used sensors to study usage patterns. It discovered 75% of conference room usage was for single-person meetings.

What employees really needed wasn’t more conference room space, but more privacy.

The company introduced phone booths to address this, which improved space utilization and resulted in considerable improvement to the employee experience.

“The average building is about 40% utilized. And when you look at the numbers associated with that at the national, even global level, you're talking about literally hundreds of millions of dollars of capital assets that are locked up today. If you think about the opportunity to take that capital and even redeploy it to hire more people or invest in the next line of business or the next product team, there's an opportunity to increase the GDP of the world by making all these buildings much more efficient and productive.”

- Dan Ryan, CEO, VergeSense, on The Workplace Innovator podcast

Methods For Tracking
Space Utilization

There are many ways to track space utilization, depending on your data needs and your existing technology. It’s OK to start small and expand upon your space utilization strategy later.

For instance, you may only need to gather historical data at first, but as you add more employees, it becomes necessary for them to share desks. You might also find you need to improve conference room utilization because the majority of rooms appear to be booked, when in actuality half of them are sitting empty.

Real-time space utilization data becomes more important. Here’s a closer look at the most common space utilization methods.

Badge Data

Using ID badge systems is a common way to ensure workplace security. Badge data systems can be set up to track entry only, entry and exit, entry into secure areas or entry onto specific floors. You can use this data to identify space utilization trends.

BLE Beacons

Bluetooth Low Energy (BLE) beacons are a form of short-range wireless communication. They are ideal for applications where long battery life is more important than data transfer.

PIR Sensors

Passive infrared (PIR) sensors detect body heat and movement around a certain parameter and can trigger an alert when someone passes the threshold. They are small, battery-powered sensors that can be affixed to seats or desks and are among the most common types of IoT sensors on the market. Examples include Relogix, CoWorkr, OccupEye and GE Current, a Daintree company.

Lighting Sensors

Designed to optimize energy consumption, lighting sensors are occupancy sensors that send signals to lighting systems. These are typically among the most expensive IoT sensor solutions to implement.

Image Sensors

Image sensors are larger, anonymous sensors that track entrances and exists through doorways. They are ideal for identifying occupancy patterns through the day. Examples include VergeSense and Density.

Wi-Fi Triangulation

Wi-Fi- triangulation uses wireless access points to take occupancy tracking a step further, allowing workplace leaders to identify exact positions. It has typically been used in environments with complex resource management needs, such as hospitals, airports and shopping malls. For instance, a Wi-Fi triangulation system within a hospital may keep track of medical equipment.

Implementing each of these methods involves varying degrees of cost and difficulty, which are important considerations. They may also vary in the accuracy of their data.

Download the
IoT Device Types Matrix

To find out which device best fits your office.
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SPACE UTILIZATION MATRIX

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Space Management Software
The Foundation For Smarter Workplaces

When IoT sensors are connected to space management software, you can interact with space utilization data like never before. You can see real-time and historical occupancy data right within your digital floor plans, from a single platform.

This allows you to:

  • Identify underutilized spaces and make adjustments as needed 
  • Identify how other organizations are using your resources, especially in multi-tenant buildings 
  • Ensure your workplace has the right mix of collaborative spaces and quiet spaces 
  • Forecast and plan for future growth 
  • Empower employees to easily reserve space anywhere, from any device 
  • Move away from assigned seats in favor of an agile workplace

No matter what you want to achieve by improving space utilization, iOFFICE’s space management software should be the backbone of that strategy. Our software offers the most robust reporting capabilities around key space utilization metrics, which enables intelligent space planning, smart maintenance and more.

It also integrates with mobile workplace apps employees can use to find people and places, reserve rooms, request service and receive mail or visitors.

learn how iOFFICE can
help you achieve your space utilization goals

Schedule a Demo Today