Real estate is one of your top operating expenses. So why waste it? If you aren’t measuring and reacting to your space utilization, you’re probably paying for space you don’t need and inhibiting your employees. Right now, you might have unused space you could reallocate instead of investing in additional real estate.
When it comes to managing your office space, assumptions and personal preferences can only get you so far. To maximize your office space utilization, you need to know what works and what doesn’t. And that’s why enterprises are turning to advanced space management software like Tango Space and new practices to better understand their office space utilization.
Here are 13 office space utilization metrics you should be tracking.
Capacity is the total occupants a room or facility can support at a time. This is typically based on the number of seats or workstations. As you reconfigure your space and change its density, your capacity will increase or decrease. Office space capacity also serves as a key component of other space utilization metrics.
Population refers to the number of people who use a space. The numbers will also change as you hire new people, employees leave, and you reassign workers from other spaces.
For workplaces with dedicated workstations, the population of any one of those stations is likely to be either one or zero (if currently unassigned). But for hybrid workplaces or activity-based workplaces, each workstation is likely to have a much higher population, as different employees will use the same spaces at different times.
In such cases, it’s important to know the population for those workstations. A high population can indicate that the space is in high demand. You might consider creating more spaces like it to satisfy demand. On the other hand, if a shared space has a population that is low or zero, it’s worth looking into why. That space might be better repurposed for something else.
Office space density refers to two different metrics: density per seat and density per person, both of which describe how tightly packed your office is. To calculate density, you first have to know your rentable square footage (RSF) or rentable square meters (RSM), which is the usable area of your interior space (not including things like stairs, restrooms, or closets).
Density per seat is your RSF/RSM divided by capacity.
Density per person is your RSF/RSM divided by office population.
For example, if a workspace containing 4 workstations has 300 rentable square feet (RSF), then it has a density of 75 square feet per seat. And if only 3 employees work in that space, then it has a density of 100 square feet per person.
Office space density has been of particular concern in recent years due to COVID-19. Susan Wasmund, the Managing Director and Occupancy Planning Practice Lead at JLL, suggests that most businesses increase the density per person by about 50%. Even as regulations loosen and disappear, you’ll still need to consider your employees’ comfort when determining how dense your office space should be.
Occupancy level is the amount of usable space occupied at a given moment, expressed as a percentage. The occupancy level for a room or area is the number of occupants in a space divided by the capacity of the space. But occupancy level can also refer to a whole building, in which case it is the number of rooms being used divided by the total number of rooms in the building.
For example, if 8 people are occupying a meeting room with a 20-person capacity, then it has an occupancy level of 40%. And if an office building with 40 rooms has 20 of those rooms occupied, then it has an occupancy level of 50%.
In the past, businesses that measure occupancy levels have often used simple, unreliable methods like visual walkthroughs. But occasionally counting bodies in seats doesn’t really cut it. In the intervals between walkthroughs, your occupancy levels could be completely different. To truly measure and understand your occupancy, you need IoT sensors like LiDAR units and blurred-vision cameras. These devices show you how many people are present in any space at any given moment, enabling you to track occupancy levels in real time.
When occupancy levels are high, the space in question might be too small for its function. You want room for growth, and you want to ensure employees have access to the space they need. As occupancy levels rise for particular types of spaces, you’ll likely need to reconfigure your office and allocate more square footage from underutilized spaces.
According to commercial real estate firm JLL, occupancy and vacancy make up the most important metrics for space utilization.
Tango space makes it easy to track and visualize your space, manage changing space needs, and translate office space utilization metrics into actionable insights.
Vacancy level is the inverse of occupancy level: the amount of usable space that is left unoccupied at a given moment. If you’ve already calculated occupancy, then you can easily calculate vacancy as the remaining percentage out of 100. So if the meeting room has 40%occupancy, then it has 60% vacancy. And if the office building has 80% occupancy, then it also has 20% vacancy.
When vacancy levels are high, your space is likely underutilized. Either you simply have too much room for growth, or you need to find another purpose for that space. Maybe this is where you’ll find the storage space you need—so now you don’t need to rent a shipping container—or you could reconfigure this space into a meeting room, additional neighborhoods, or another type of space your employees need more of. You might even be able to downsize your real-estate portfolio.
Peak occupancy level is the highest occupancy level that a space receives throughout the week. Let’s say a meeting room tends to have an occupancy level of 60%, but a couple of weekly meetings push it up to 110%. People have to crowd around the door or borrow chairs from other spaces. You don’t usually need more room for meetings, but clearly, some teams, departments, or projects require a larger space with more seating or greater density in the same space. Or suppose your sales floor has a peak occupancy of 90%. Most of the time, it sits at a comfortable 50–70%, but during peak hours the background noise is unbearable.
Tracking peak occupancy is particularly important in hybrid workplaces. If your employees alternate between working from home and working in the office, there may be days and times when more of them are on-site than normal. By tracking peak occupancy, you can create schedules that even out your occupancy levels or just let employees know when the campus is less busy (and when they’re more likely to get the spaces they prefer).
Utilization rate is the percentage of time a space is occupied throughout the workday. It’s the average occupancy level.
For example, if a room with four desks has four occupants, then it has a 100% occupancy level. But if two of those four occupants are only present for half the day, then it has a 50% occupancy level when they’re not there, and it has a 75% utilization rate for the whole day.
J-LL suggests that a typical utilization rate is around 60% to 70%. If your utilization rate is much lower, you’re probably not using this space efficiently. If your utilization rate is much higher, you may not have room to grow, and peak occupancy hours could be a problem.
You can address a high utilization rate by increasing density per seat, converting other spaces (like private offices) into workstations, or expanding your real estate portfolio.
Demand for space is the amount of space your employees need. High peak occupancy and utilization rates can indicate that you don’t have enough supply of particular kinds of space to keep up with demand. Desk booking software gives visibility into demand for space as well. If particular rooms, workstations, neighborhoods, or amenities get reserved more often than others, there’s more demand for those spaces—and you may want to create more of them.
Cost per seat is the average overhead for each seat in a workplace, usually expressed on an annual basis. To calculate cost per seat, take the total cost of lease, utilities, furniture, decorations, equipment—basically any cost incurred by having employees work on-site—and divide it by the total number of seats in that workplace. This provides a clear picture of the true occupancy costs for your workplace.
That clear understanding of occupancy costs will inform you to make decisions about configuring your office space. If cost per seat is high, you can look into whether you have any superfluous overhead that could be trimmed back. And if your overhead costs are already where they ought to be, you might consider increasing the density per seat in order to spread those costs out further. On the other hand, if your cost per seat is low and you have some breathing room, you might consider making things more comfortable with de-densification.
Cost per person (or cost per head) is sometimes conflated with cost per seat, but you should track it as a separate metric. Cost per person is calculated the same way as cost per seat, except that you divide the total cost by the number of employees rather than the number of seats.
This distinction is particularly important for hybrid workplaces and activity-based workplaces, where employees share a pool of reservable spaces and there can be a significant difference between cost per seat and cost per person.
In a dynamic workplace, there can be far more employees than seats, so your cost per person will be much lower than your cost per seat. Alternatively, in an activity-based work environment, where each workstation is optimized for a particular activity rather than being assigned to an employee, your cost per person may be much higher than your cost per seat.
Mobility ratio is the ratio of employees who do not have an assigned workstation to the employees who do.
For example, in a hybrid workplace, some employees will alternate between working remotely and on-site, while some others may always work on-site. Those who are always on-site likely have their own dedicated workstations, whereas hybrid workers often use shared spaces when they come into work. Knowing your mobility ratio helps you determine how many shared spaces you need to have available, compared with dedicated workstations.
Alternatively, in an activity-based working environment, most employees will be expected to move around between workstations, but you’ll probably have exceptions, such as executives or those who use specialized equipment. In this case, the mobility ratio will be much higher, but it will still help you determine the amount of each type of space you need.
Office-to-workstation ratio is the number of offices in your workplace to the number of workstations. Converting private offices to multiple workstations allows more employees to share the same space. It could provide the room you need to keep growing in the same building. However, some positions simply require dedicated offices. So it’s important to balance efficient use of space with what your employees actually need.
As you make changes to your workplace based on the office space utilization metrics you’re tracking, it’s important to keep in mind that people aren’t robots. Strict by-the-numbers efficiency won’t result in the best working environment if you aren’t accounting for your employees’ needs and desires. Unhappy employees will result in decreased productivity and a higher turnover rate.
To make sure your employees are satisfied, send out frequent surveys (especially before and/or after you make changes), and keep a line open for receiving feedback. Learn what they need to feel taken care of, and factor that into your decisions. For any office space changes you make, reach out quickly to learn how it’s actually affecting them. All the metrics you track are important, but happy employees are a key indicator of how well you’re using your space.
Whether you have a few dozen locations or tens of thousands, Tango Space has the purpose-built solutions you need to make the best use of the space you have, identify wasteful or poorly utilized space, plan for future demand, and explore your locations in real-time. It fully integrates with any IoT sensors you use, plus incorporates data from your office reservation system, allowing you to visualize your office space utilization in real-time.
Want to see what Tango Space can do for your organization?