The New Space Metric: “Space Utilization”

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The current economic turmoil has forced organizations to re-evaluate their second most significant operating expense: their real-estate footprint. In an effort to build leaner and more agile portfolios that respond quickly and efficiently to unpredictable changes, more and more organizations are adopting or exploring strategies like consolidation, densification, and flexible/alternative ways of working. The parameters for workplace efficiency and capacity, therefore, have changed. No longer is the critical space metric the number of square feet or square feet per person, it is now space utilization or occupancy rate.

Space utilization or occupancy rate is defined as the percent of time space is occupied. The effort now is not to minimize space per person, but to achieve 100% space utilization. In view of the new workplace strategies being adopted, measuring space utilization is not only considered imperative to building a business case for implementing these strategies, but also seen as an important tool to assess and allocate space where and how it is needed. There is also a need to not view this as a one-time study, but as an ongoing effort to track real-time data in order to re-balance space across teams and functions, since business needs and processes are now more volatile than ever.

There is a huge gap between perceived space utilization and actual utilization. In a webinar entitled “Getting Strategic about Space Management” presented on July 15th by Phil Wee, Manager, Occupancy Planning, and Curtis Knapp, Global Director of Occupancy Planning for Jones Lang LaSalle, it was stated that JLL identifies an average of 26% more vacancy than initially reported by their clients. Per Maureen Moody in her article “Mastering All You Survey” in the June 2010 issue of FM World, Cerys Jones, Director at Cochrane McGregor, a UK-based workplace consulting firm, and Bernard Crouch of Gunnersbury-Consult report that the perception of space utilization might be 60%, but surveys could show as little as 28%. This translates into a large potential for gaining efficiencies.

A number of data collection technologies are out there in the market today and, depending upon the level and type of detail of the information required, the right technology can be easily selected. The technologies can be broadly categorized into four types, in order of the detailed information provided: video-based, sensor-based, observation surveys, and in-place reservation/checking-in systems.

All technologies come with built-in reporting, which might reveal statistics on occupancy by rooms, departments, floors, traffic in specific areas or between certain groups/teams, maximum usage showing patterns, and actual usage vs. reservations. Video-based and sensor-based technologies are able to record intensive data over a larger period of time and are very accurate, but might have a “big brother” feel to them, as well as being expensive solutions. Human observation methodology is still the most popular, since it is the easiest and cheapest, but organizations are increasingly choosing to use more sophisticated technology to get exhaustive data.

Irrespective of the technology selected, organizations are realizing that tracking space utilization gives the real picture of how space is being used, which in turn helps inform better workplace decisions and can also result in huge cost savings.