Occupancy vs utilization: both essential metrics for space planning, especially in a hybrid office. And while people may use these terms interchangeably, they are definitely not the same thing.
So what’s the difference between these two essential metrics: occupancy vs utilization? And which one should facility managers (FMs) and space planners use when designing their workspaces?
In this article, we settle the ‘occupancy vs utilization’ question. We’re outlining what workplace data matters most in a future of work that is often hybrid and undoubtedly more dynamic (and challenging) than ever. We’ll also explore why presence data is now the metric of choice for modern FMs.
Measuring occupancy vs utilization has always been one of the main responsibilities of facilities managers and space planners. And in an era of renewed focus on strategic space management, these data points have never been more important to track and understand.
But note that the concepts of ‘occupancy’ and ‘utilization’ are also often referring to measure call center agent productivity and efficiency. In this context, call center occupancy refers to how much available time an agent spends on calls and call-related tasks. This is including after-call work, or ACW. Meanwhile, utilization focuses on the ratio of their overall productivity to their capacity. Contact centers will typically track both metrics carefully to prevent agent burnout and improve operations.
Of course, call center management is quite different from facility management. In this article, we’re focusing entirely on how FMs and their companies can use these metrics to improve both workplace and workforce management.
Top strategies for hybrid office space planning with CBRE’s Susan Wasmund
First up, what does occupancy mean in a modern office?
‘Space occupancy’ is just what it sounds like. The extent to which a physical space is occupied at a given point in time. In an office, this usually refers to the number of people occupying existing seats.
Occupancy rate (also known as ‘percent occupancy’ or ‘space occupancy rate’) is a static snapshot of office use. As such, it has historically been the focus of traditional office settings, which themselves tend to be more static.
But for companies that adopt flexible working and/or a new hybrid work model, space occupancy rates alone are typically not enough to inform better decision making for their corporate real estate.
Due to both the demands of the hybrid workplace and the rising costs of real estate, companies are placing more focus on space utilization than in the past. Companies need good space utilization data in order to maximize the value of their physical spaces. This data can also help ensure that every space is supporting both their employees and their long term business goals.
Space utilization (and, specifically, workplace utilization), is about how space is being used over time. The more FMs and space planners are able to see how employees are using the office, the more they’ll be able to both improve efficiency and reduce costs.
Good space utilization metrics allow decision makers to ask much more nuanced and useful questions about their spaces, such as:
Occupancy measures how many people are in a space, while utilization measures how they’re interacting with that space.
Occupancy rates on their own may no longer provide enough detail in a world where office use fluctuates. Consider that 50% of desk bookings within OfficeSpace are last-minute, made by employees less than 48 hours in advance.
But since wasting space is wasting money, companies still need to keep their occupancy rates optimized as part of their overall real estate portfolio management strategy.
They can do this by combining multiple types of workplace metrics to create actionable presence-based utilization data.
Simple headcount planning won’t work in a flexible work environment. Just being able to predict future staffing won’t help predict how those new team members are going to use the physical office. This is especially true if they’re following any type of hybrid schedule.
Meanwhile, decision makers will also struggle with short-term planning if they don’t understand what spaces in the office are being used for what amount of time.
In other words, planning and optimizing the office isn’t an either/or, ‘occupancy vs utilization’ scenario.
Instead, using occupancy with utilization (plus several more key metrics) will help FMs and space planners to make a better hybrid workplace experience. And to make more informed real estate portfolio decisions, too.
“Employee’s workstyles have changed more in the past two years than in the previous 20. Companies that measure space utilisation have a better understanding of employee preferences and work habits, making it easier for them to design spaces that attract employees back to the office.”Susan Wasmund, CBRE Senior Managing Director and Global Occupancy Management Lead, speaking with Facilities Management Journal
“Employee’s workstyles have changed more in the past two years than in the previous 20. Companies that measure space utilisation have a better understanding of employee preferences and work habits, making it easier for them to design spaces that attract employees back to the office.”
So what will FMs and space planners get if they combine occupancy with utilization data? Instead of occupancy vs utilization, what if they look at the two together?
Short answer: they’re going to get a better road map to better space optimization.
Longer answer… They’re going to start to build more robust presence data that will illustrate how, when, and where people are using the office.
Presence data uses a variety of data points from a variety of sources. And it’s quickly emerging to illustrate how space is being used in a dynamic workspace.
In the past, companies may have needed to rely on complex and expensive occupancy sensors to get this presence data. And certainly IoT sensors remain the right choice for many companies.
But with budgets tightening across the board, and real estate leases quickly coming due, many companies are now looking for options that are less expensive and/or quicker to implement.
For this reason, companies are beginning to use presence-based utilization from the following sources:
They may also want to analyze this data alongside less precise methods. Like office censuses (i.e.: ‘walking the floor’) and employee surveys. When they use these methods alongside real-time and historical presence data, they’ll be able to then build an accurate and complete picture of office use.
Collecting data is great, but it only gets the office so far. Data needs to be actionable, too.
For this reason, to ensure that utilization metrics actually work as intended, companies need to use reliable space management software. It needs to help manage and forecast how space is being used. In particular, this software should allow them to layer multiple data sets. This is in order to make better workplace decisions going forward.
Every data source comes with its own issues. Employees may not consistently badge in, wifi signals can be blocked, employees might forget to book the desk they’re using.
So the only reliable way to overcome these issues is to layer data sets together. This helps fill in gaps to create a more complete picture of office attendance. This is why 90% of companies collect utilization data today. And 70% of companies now using more than one method to track it.
To put this utilization data to good use, one of the first goals should be to flatten the gap between peak and average workday utilization. No one wants to work in a crowded office. Or to be in a vast space so empty you feel completely alone.
With their average and peak utilization data in hand, FMs and space planners can start to determine when, where, and then why any utilization spikes are happening. This is along with what can be done to flatten them out. They may realize that some meeting rooms could be repurposed for desk space. Or maybe it makes sense to hold some larger training sessions off site.
From there, decision makers will need to understand that there’s no ‘one-size-fits-all’ approach to the office that will work for every company.
Old benchmarks and industry benchmarks don’t apply like they used to. Companies now need bespoke arrangements that jive well with their unique budgets, work requirements, and culture in the workplace.
That means they’ll need to determine what matters to them specifically now. Whether that’s productivity, output, customer satisfaction, or something else. Once they determine which Key Performance Indicators (KPIs) are most relevant to their goals, they can start measuring and eventually improving them.
“Take the time to figure out what matters most to your business and figure out your baseline,” suggests Mary Carnes, Senior Workplace Solutions Consultant at OfficeSpace. “Once you have that, then you can start to figure out how to test and measure things that impact it, positively or negatively. As you start trying out things, you’ll be in a better position to determine what works and what doesn’t.”
Optimizing space today isn’t just about having the right metrics. It’s about using those metrics to ask (and answer) better questions, experiment with new options, and map out a better path for the future.
Occupancy and space utilization rates are some of the most important tools in the space planning tool kit. But as with any data, they’re much less useful on their own than they are together.
“My advice to companies is that you can’t rely on just one source of data,” says OfficeSpace Senior Product Manager Kathleen Williams. “Look across your information silos and break them down as much as possible. You need to bring your large datasets together to truly solve business problems.”
Occupancy rates will tell you how many people are in a space—the ABCs of workplace management. Utilization rates will let you take those ABCs and use them to actually write the story of your workplace. This story in turn can then lead the way to more effective and efficient workplaces going forward. Ultimately, the goal is to ensure that any time in the office is productive time well spent.
“Hopefully it becomes a win-win,” says Carnes. “The company is able to save money on real estate they don’t need anymore, and the employee is able to get some flexibility, without sacrificing collaboration in the workplace, culture, or employee experience.”
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In an office setting, occupancy refers to the percentage of available space that is currently occupied by people or equipment/desks. Often, this means a static number of the amount of people in desks at a certain point in time. Meanwhile, utilization refers to how available space is being used over time. This is a more nuanced metric that tracks the effectiveness and efficiency of different areas of the workplace. As such, it often requires facility managers to layer data from multiple sources together to create a fuller picture of office use over time.
In a call centre context, occupancy rate is a workforce management metric (WFM) that refers to how much of total shift time that agents spend on calls and call-related activities. Meanwhile, utilization is a WFM that highlights the amount of time they spend on productive work tasks. Understanding agent occupancy and utilization rates, and creating the right balance between idle time and talk time, are both critical when trying to maximize productivity and resource management.
In the real estate context, occupancy and utilization rates are used in building or property management. Occupancy rate measures the percentage of available units or spaces currently being leased or rented. Meanwhile, similar as in facility management, the utilization rate measures how much available space is being used efficiently and effectively.
Note that occupancy rates are very important in the hotel industry as well. Here, occupancy rates refer to how many rooms are currently booked.
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