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Maximizing The Dollars and Cents (Sense) of Space

Companies are spending millions of dollars on underutilized space they don’t need.  Depending on which publication you read, offices are being utilized anywhere from 30-60 percent of the time. So how can a company accurately track their utilization to ensure they are in the right amount of space?  By completing a utilization study with the latest sensor technology.  And by spending only pennies on the dollar, they can save millions of dollars by right-sizing their space to be as highly utilized as possible.

Understanding real estate utilization empowers a company to make more informed real estate decisions. Years ago, our clients would say that they needed to expand their spaces to accommodate growth, so we manually observed their workforce at regular intervals over the course of two weeks and made recommendations on enhanced seating ratios based on what we observed.  We began to see that the perceived need for more space wasn’t being borne out by the utilization studies.  With manual methods, however, there is always the potential for a larger margin of error in the data. 

As technology advanced, more companies started using badging for building entry, providing us with an opportunity to track utilization more accurately. By analyzing badge reports we could identify how many employees were entering the building. In cases where employees were also required to use their badge to exit, we could understand how long people were there, allowing us to make assumptions on how the space was being used. While this data enabled more concrete recommendations, there remained considerable variation in badging protocols that did not paint the entire picture.

Occupancy sensor technologies are now flooding the market - infrared, temperature, motion detection and CO2 just to name a few. With sensors strategically installed throughout an office, or even an entire portfolio, we can collect and analyze real-time utilization data. We recently met with a client who was expecting to grow by 11 percent in the next year. A company with a 1:1 ratio – one person per one seat – found themselves without enough seats to accommodate growth at their current ratio, so they were in the market for more space.

The client noticed that on any given day, however, the office did not seem to be as full as they thought. To track how the space was truly being utilized, sensors were installed in every workstation, office, conference room and open collaborative space for eight weeks, allowing us to provide eye-opening results.

The office was, on average, utilized only 30 percent of the time. Sensors showed which seats were regularly unused and which meeting rooms were most popular or underutilized. Eight weeks of data provided an abundance of information, but our strategist analyzed the data to understand the ‘why’ behind the ‘what’.

Why were the seats assigned to the marketing department always vacant? Why was the centralized conference room hardly ever used? As it turns out, the marketing team regularly travels to conferences, creating the possibility of utilizing touch-down spaces when they are in the office, rather than dedicated workstations. The centralized conference room does not have adequate auditory or visual privacy; a pretty simple change in the enclosure could make it more usable and thus more utilized.

Having this type of data at their fingertips allows our clients to make real estate decisions based on facts, not the perception of facts. While the data is crucial, so is the human element.  Analyzing and interpreting data to answer the ‘why’ will dictate the need for the future portfolio and provide workers with the types of space they need to be as satisfied and productive as possible, while saving the company money on over-leased, underutilized space.

About the Author:  Courtney Fain is Studio Principal for Little's Workplace Consulting team.