We’re in the middle of major shifts in the modern workplace, and it affects more than just recruitment and retention. Remote work, hybrid work and the four-day workweek all create ripple effects for physical office spaces too.
Commercial office vacancy in the US has topped 20% for the first time in decades, and 50% of global companies plan to prune their real estate portfolios even more.
Should you join them? We can’t answer that for you — but analyzing your office space utilization can.
What is office space utilization?
Office space utilization measures how efficiently your physical workspaces are used. It looks at how many employees use your office space — and how often — to reveal whether it’s rarely occupied, overcapacity or somewhere in between.
Business leaders use office utilization data to help determine the right ratio of square footage to employees — and to help create a workplace experience that supports productivity. The insights can help guide everything from real estate decisions to hybrid work policies.
The importance of effective office space utilization
In today's fast-changing work environment, maximizing office space has become crucial to organizational efficiency. Why? Because when you understand where and how people work best, you can adapt your office space to support productivity — rather than trying to squeeze it out of pre-existing structures.
In other words: Prioritizing office space utilization lets you create a work environment just right for your workforce, whether that means optimizing your office design or adopting more flexible work policies.
Better yet, efficient space utilization can lead to cost savings. By predicting how much space will actually be used, you can avoid overpaying for empty real estate and unused equipment.
And finally, when employees are supported by the office style that works best for them, they’re more likely to feel valued. This, in turn, leads to greater job satisfaction, higher levels of engagement and lower turnover.
How to calculate office space utilization
Before you can optimize your office spaces, calculate your current space utilization rate. The basic equation for office space utilization is:
Number of employees ÷ Total workplace capacity
If you have 50 employees in a space designed for 100, your utilization is 50%. If you pay for a 300-employee space typically used by 75 workers, your utilization is 25%. While this number doesn’t tell the whole story, it reveals a lot about if and how your offices are currently used. You can get a better understanding of your utilization with additional related metrics.
Additional office space utilization metrics
Other important metrics to consider include:
- Occupancy rate: While this may seem similar to office space utilization, occupancy rate measures how many employees currently occupy your office space, and will tell you if your offices are too crowded or empty. Calculate it by dividing the total amount of space occupied by the total floor space available.
Total occupied space ÷ Total available space
If you pay for 3,000 square feet of workstations, conference rooms, kitchens and bathrooms but people spend all their time in a third of it, your occupancy rate is 33%.
- Meeting room utilization rate: This measures how many of your meeting rooms are used at any given time. Calculate it by dividing the number of hours your meeting rooms are available each day by the average number of hours they're occupied.
Number of meeting rooms ÷ Total available meeting room hours
If a conference room is available for eight hours but booked for two, your meeting utilization rate is 40%.
- Workspace utilization rate: This measures the average percentage of workspaces or desks that are used. Calculate it by dividing the average number of people in the office each day by the total number of available workspaces.
Average number of people in-office ÷ Total available work spaces
If you have 100 workspaces and 90 people are in the office on an average day, your workspace utilization rate is 90%. If 30 people typically occupy those desks, the rate is 30%.
- Room usage rate: This looks at each room individually to measure how many hours it’s used each week and how often it’s empty. If your meeting rooms are frequently used but individual desks are not, that’s a strong indicator that your workforce prefers to come to the office for in-person collaboration but not focused or deep work.
3 tips for maximizing office space utilization
For many businesses, the ideal is not either return to the office or remote work policies, but a mix of the two. Open spaces encourage teamwork, private areas enable focused work and quiet home offices empower deep work. If you run the calculations above and find your employees use your office space some days but not others, you’ll need to find creative ways to optimize productivity.
These three tips will help:
1. Rotating schedules
A rotating schedule can help generate savings on real estate costs while positioning employees for success.That might mean implementing a four-day workweek where some employees work Monday through Thursday and others work Tuesday through Friday. Or you could use desk bookings and meeting room reservations to determine which teams will be in the office each day and who will work from home. Either way, you can lower your total square footage while positively impacting productivity.
2. Flexible setups
It’s important to remember what matters: It’s not just when employees report to the office but how they use your floor plan. Easy-to-adapt features like moveable walls and adjustable lighting allow employees to turn open spaces into private areas as needed. This approach will also help you squeeze as much value as possible out of each room, reducing the amount of square footage you’ll need.
3. Use employee data
You can learn a lot from workforce analytics, such as where and when employees are most productive. In fact, employee Location Insights are often more accurate than traditional badging systems. Location detection data can tell you who works best in which environment, and whether coming to the office hinders or helps productivity. You can then use these insights to guide data-driven decisions around office real estate.
Discover how ActivTrak helps you right-size office space utilization
Maximizing office space utilization is critical for any business looking to improve the employee experience. By understanding the importance of space utilization and leveraging the right technology, you can optimize workspaces to foster innovation like never before.
ActivTrak equips you with insights on where employees work — and where they work best — with metrics such as:
- Productive hours by location
- Time spent in the office vs remote
- Average start and end times by location
This data removes the guesswork from determining which office spaces promote productivity, and when it’s time to move to a smaller location to reduce expenses from underutilized space. Sign up for your free account or request a demo to learn how ActivTrak can help you make the right office utilization decisions for your workforce.
