Before COVID-19, workspace optimization was all about densification. Companies explored innovative ways to fit as many bodies in each office, floor, and building as possible, walking the fine line between reducing costs and inhibiting comfort.
The pandemic abruptly reversed this trend. Many companies spontaneously became fully remote, scrambling to adapt to the virtual workplace and formalize their work-from-home policies. Those that didn’t go remote rapidly shifted toward de-densification, reconfiguring their space to keep employees six feet apart and allow for more dynamic space utilization.
For some companies, reopening meant a gradual return to densification. But even as guidelines evolved, many employers remained sensitive to their employees’ needs and attuned to the potential savings of a dynamic workplace model.
Workspace optimization isn’t going to look exactly like it did before COVID-19. But it also won’t be the same as it was during the pandemic. You may not be limited by social distancing, but now you have to consider things like:
- Whether you need as much space as before
- How the threshold for employee comfort has changed
- If more dynamic space would result in better utilization
- How to address the accelerated adoption of remote work
This isn’t the time to make sweeping changes. It’s time to evaluate what your organization really needs and use data to make wise decisions about how to use your real estate. What “workspace optimization” means will ultimately depend on your goals—are you trying to get everyone back in the building, or manage a hybrid workplace? But whatever your target is, we’ve got the metrics you’ll need to track and analyze.
Here are 10 workspace optimization metrics for the post-COVID office.
1. Occupancy/vacancy level
According to commercial real estate firm JLL, occupancy and vacancy level is the most important metric companies use to optimize their space. While they’re distinct metrics, occupancy and vacancy levels are two sides of the same coin: the percentage of usable space that is occupied and unoccupied at a specific moment in time. This is either measured in terms of “units of capacity”—the total available workstations, offices, etc.—or the spaces and rooms with at least one person occupying them.
For example, using a visual walkthrough or technology that incorporates sensor data, a company may find that 30 out of 50 rooms are in use, giving them an occupancy level of 60 percent and a vacancy level of 40 percent at that specific moment. Additionally, they might measure the number of seats that are occupied in each room, discovering that only 3 out of 10 seats are occupied in most conference rooms and shared spaces, giving them an occupancy level of 30 percent and a vacancy level of 70 percent in these spaces at this time.
Occupancy and vacancy levels are data points that feed into other metrics like utilization rate. They don’t reveal much in a single point in time, but collectively, they provide valuable insight into how space is actually being used. Depending on the method used for measuring occupancy and vacancy levels, an organization might have just a few readings per day, or more than one hundred per hour.
Occupancy and vacancy levels are crucial signals of where there’s wasteful or insufficient space, and you should measure them for every space you have, including collaborative workspaces and hoteling areas. Using occupancy and vacancy as guides, you can learn where there’s room to adjust the dial and increase or decrease density, reduce your real estate portfolio, repurpose space, or grow.
2. Peak occupancy
While your average occupancy and vacancy will show you how space is typically used, peak occupancy is just as vital to pay attention to—particularly if you have a hybrid workplace, where employees often switch between working from home and working on campus.
It’s like knowing the difference between an average commute time and a commute during rush hour traffic. You need to pay attention to how congested your space can get and whether that may inhibit your efficiency, even though it’s not the norm.
When your peak occupancy is substantially higher than your average occupancy, something needs to change. The huge fluctuations could indicate that you need to assign days for virtual employees to come into the office based on teams, departments, or another dynamic model such as real-time occupancy management. This can help level out your average occupancy and vacancy percentages and ensure that your organization still has some room to grow.
3. Utilization rate
Utilization rate is essentially your aggregate occupancy level: the percentage of time a given space is in use each workday. According to JLL, a typical utilization rate is around 60-70 percent. And while not all organizations track utilization of shared spaces like conference rooms, kitchens, break rooms, and collaborative spaces, the more spaces you track, the more opportunities you have to identify waste or potential for space optimization.
If your overall utilization rate is too high, you don’t have room to grow, and you may run into problems during peak occupancy hours. To lower your utilization rate, you might have to decrease the density per workstation, decrease the ratio of offices to workstations, or increase the size of your real estate portfolio.
On the other hand, if your utilization rate is too low, you’re paying for space you aren’t using. To address this unused space, you could put more bodies in the room, increase the ratio of offices to workstations, incorporate more mobility programs, or downsize your campus footprint.
This also obviously depends on the types of spaces in your floor plan. An underutilized space is an opportunity to add an amenity that would benefit more people, create room for new hires, or find a more relevant purpose for the square footage. If a collaborative space is always occupied, that indicates high demand for more of this type of space, and there may be opportunities to reconfigure underutilized areas to meet this demand.
4. Office space density
Office space density is an important metric with two submetrics: density per person and density per seat. This is based on your rentable square footage (RSF) or rentable square meters (RSM) divided by either the office population (total number of people using the space) or capacity (number of usable workspaces).
Note: RSF/RSM is your interior square footage or interior square meters minus any “unusable” space such as stairs, pillars, closets, restrooms—anywhere you couldn’t reasonably expect someone to work.
Trends in office space density vary by region and industry, and your desired density is dependent on your company culture and how your values translate into the corporate experience. Companies that place greater emphasis on collaboration and crossover between teams and departments may have less space per seat than companies that primarily value autonomy and initiative. And some populations of employees will simply have a greater tolerance for denser offices.
An organization that more heavily embraces mobility programs like hoteling workspaces will have more space per seat than space per person—because employees share desks and workstations by reserving them at different days and times, so there isn’t a one-to-one ratio of workstations to employees.
5. Cost per seat
Most employers aim to find the right balance between productivity, satisfaction, efficiency, and cost. For some organizations, cost may be the single greatest driving factor in deciding how to configure an office. For others, it’s secondary to ensuring space is simply being used well.
Cost-related metrics like cost per square foot have more to do with where an office is located than how well you’ve used the space you have, so that’s not a particularly useful metric to optimize for. Cost per seat gives businesses a much clearer picture of their occupancy costs and creates opportunities to make adjustments based on your needs, like increasing or decreasing density.
Corporate offices with low cost per seat have high utilization rates, high office space density, and a low ratio of offices to workstations.
6. Space alignment
Space alignment is about configuring your facility to fit your strategic goals. When the way you use your space inhibits your ability to achieve your goals, that’s poor space alignment.
If collaboration is important to your organization, you need to allocate ample space toward this use case. Companies with a significant percentage of distributed and remote employees need to consider whether their space has the necessary equipment and technology to facilitate meetings between virtual and in-person employees or include virtual employees in company events. Or maybe you want to be a hybrid workplace: you have to ensure there are enough workstations for remote employees to reserve when they want to be in the office.
Or let’s say you want to promote synergy between two departments. Space alignment can mean allocating space in such a way that specific departments and teams are physically located near one another to increase opportunities for collaboration. For example, sales and marketing departments are notoriously siloed, and yet there are numerous ways that their efforts overlap and support each other.
These two departments often need different types of spaces, but if they have shared break rooms and coworking spaces and don’t have to walk across campus to occupy the same space, it increases the opportunities for marketing and sales employees to develop relationships, collaborate, and discover how they can support each other through things like sales enablement.
Perhaps you want to reduce occupancy costs or increase your utilization rate. Space alignment can significantly increase efficiency in these areas by reducing the time it takes employees to get to the spaces they use and the people they collaborate with most often. For example, a team or department that frequently meets with others should probably have a prominent, central location. Saving a single employee 30 seconds of walking per day can easily add up to more than 100 hours over the course of a year. Multiply that by an entire department, and you’ve just put a dent in your occupancy costs and increased the time people actually have to use the spaces you’ve dedicated to work-related activities.
7. Mobility ratios
Mobility programs are dynamic work models where employees don’t have assigned workstations and rely more on shared collaborative spaces. Your mobility ratio is the number of employees in some type of mobility program to the number of employees not in a mobility program. Basically, it’s the ratio of people without an assigned workstation to people with an assigned workstation.
This is a reflection of how dynamic your workforce is, and it can help gauge how much demand you should expect for particular types of spaces. You can compare this to employee preferences gathered in surveys to get an idea of how well your office enables their desired workspace.
8. Employee satisfaction
As you manipulate your space to fit your objectives, it’s important to consider how changing the work environment influences employee satisfaction, which directly affects productivity and churn.
Adjusting office space density can significantly impact satisfaction, making employees feel too crowded or too isolated. In a post-COVID workplace, some employees continue to be sensitive to how close they are to others and how densely packed they are in a room or floor.
Adding or removing amenities doesn’t always feel valuable, but they can drastically alter how employees feel about coming to work and may help attract new employees. And unassigned, collaborative spaces may be appealing to some and intimidating or frustrating to others.
Ultimately, the impact your decisions have on employee satisfaction will depend on the makeup of your employees and your company culture. By frequently distributing surveys and collecting input from employees, you can make decisions that take their happiness and desires into consideration.
9. Demand for space
You have a limited supply of office space. However you want to allocate it, it’s vital that you balance your supply with the actual demand. When your supply of collaborative spaces exceeds your demand, those conference rooms sit vacant for more than they’re occupied. When your demand for reservable workstations exceeds your supply of hoteling space, your utilization rate is high, and virtual employees can’t come to campus as often as they’d like.
Your peak occupancy levels and utilization rates for specific types of spaces are an important indicator of if your organization is keeping up with demand, exceeding it, or falling short.
10. Office-to-workstation ratio
Some positions, departments, and teams simply need different types of spaces than others. Nobody wants to talk a client through a high-stakes sales call in an open floor, fighting against the cacophony of a hundred other sales calls. And leadership personnel need space to have private conversations with individual employees or eliminate disruptions.
But offices for individual employees aren’t a particularly efficient use of space, and there are more valuable ways to allocate this square footage. Companies need to create clear criteria for who gets an office and under what conditions to prevent them from becoming excessive and wasteful.
Your office-to-workstation ratio should ultimately reflect your larger strategic goals, but if lowering occupancy costs is one of them, it’s valuable to explore alternative ways to use this space.
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