The Whys and Hows of measuring use of space, rather than tracking inventory, to optimize the workspace and support mobility. What does adding a Utilization column do for the value of your reports?
Corporate Real Estate (CRE) executives need an effective way to measure and understand the actual use of their office real estate portfolio. Executives need to know where, when, and how users actually interact with the work environment so they can provide their fellow employees with a highly effective workplace tuned to the changing needs of the organization.
Real time, or near real time, “Actual Use of Space” data enables corporate real estate managers to deliver a highly productive, optimally-sized work environment that gives workers the space they need whenever, and wherever they need to work.
Why Measure Actual Use of Space
Space planning is an ongoing process. Organizations continually need to adjust their workspace to meet changing market and economic conditions. The advent of the mobile workforce is the catalyst which allows many, if not most, employees to effectively “work from anywhere” making their workspace a static, underutilized liability for the organization. Studies by the International Facilities Management Association show that the cost of providing a workspace to an employee ranges between $8,000 and $14,000 per year. If the average utilization for each space is 50%, then the company is wasting $4,000 to $7,000 per year for each workspace! Multiply that times the number of workspaces and the potential savings are in the millions or tens of millions of dollars.
Divesting underutilized real estate is a major business issue that can be addressed following a study for measuring how space is actually used. When leases come due organizations need to understand how they actually use space to determine if they should renew the lease, move, or consolidate. In many facilities, there is a “feeling” that there are too many unused workspaces during the work day, even though all workspaces are allocated to a department or to individuals. Many studies show that the utilization of the average workplace is less than 50%. The problem is that the unused workspace changes from day to day.
Another major business issue that can be addressed following an actual use study is adding more employees without adding to facilities. The problem is a need to add people to a location that cannot physically house them. This can arise as organizations grow or when facilities are consolidated. A common scenario is the need to add people to a location in the absence of a budget for additional facilities.
These two issues are resolved by leveraging the mobile workforce through implementation of an alternative workplace environment (AWS) that includes desk sharing.
Tracking Inventory versus Managing Workspaces
Most facility and real estate managers maintain an inventory of workspaces. These lists (spreadsheets, architect drawings, CAFM systems, etc.) are useful to track how many workspaces are in a building, the size (square footage) of each workspace, and how each workspace is allocated (by department or individual). The missing piece of data in all these systems is how often the workspaces are actually used. Adding this key data creates an invaluable tool for managing, versus simply tracking, the workspaces.
The following report shows the inventory of workspaces, the size of each workspace, the allocation, and the cost of the workspace using an industry standard or corporate-determined cost per square foot.
|Room ID||Department||Occupant||Room Area||Room Cost|
A useful report, perhaps, but by adding “actual use” data we can see how this list becomes invaluable for real estate management.
|Room ID||Department||Occupant||Room Area||Room Cost||Utilization||Cost of
The report now provides a direction for managing the workplace. We can see how much the company spends for facilities and how much money is wasted by the "under-utilization" of each space. By simply sorting this report by "Cost of Underutilization," we can identify the work spaces that are the most underutilized and identify the people who effectively work at locations other than their assigned workspace. These are the mobile workers.
Now the question can be answered on a person by person basis: "Does J. Jones, who averages a half day per week in his office, really need a dedicated office?" More broadly, do people who utilize workspace less than 50% of the time actually need a dedicated workspace?
The report now allows facility and real estate managers to make intelligent decisions of how much shared space the organization needs versus how much dedicated space does it need. It's only possible by measuring the Actual Use of Space.
Real Life Examples
Let's consider two examples: the first being an organization that has an upcoming lease renewal, and the other an organization that needs to add more employees to a facility that is fully allocated.
Company A (too much empty space)
Company A houses 750 people on six floors of a high rise building. The lease on the six floors expires in 18 months. The company is faced with three choices. Should it:
- renew the lease on the six floors;
- consolidate onto fewer floors; or,
- move to a new facility?
People have noticed that on a day-to-day basis many desks go unused. A study, performed using security-card entry data for the previous twelve-month period, showed that employees could be categorized into three groups: Anchors, Shared, and Mobile. The 50 Anchor people were assigned to workspaces that are not shared; 450 Shared people use their desks more than 50% of the timeple); and 250 Mobile people use their desks less than 50% of the time.
The study showed that the Mobile People actually used their workspaces 30% of the time. Rather than allocate dedicated workspaces to the mobile workers, the company could designate a pool of shared desks. Roughly 85 desks are needed to satisfy the housing needs of these 250 people. In other words, 165 desks are not needed. Renewing the lease for 5 floors would more than suffice, while the company would save over $2 million annually.
The study also found that the Shared People use their desk 75% of the time – meaning that on any given day roughly 110 desks are unused. These desks can be used by the mobile workers, if needed, or could accommodate an expansion of the workforce.
Company B (needs to add employees)
Company B houses 5,000 employees in a corporate campus environment comprised of six buildings. The campus is full and there is no plan or budget to build more facilities. However, there is a business need to add 500 additional employees to this location. The company needs to know how it can add employees without adding to facilities.
A study using six months worth of security entry data showed that the average utilization of all six buildings was 72%. The peak utilization was the same, leading this organization to think initially that it had virtually no mobile workers. But the study also revealed that roughly 650 employees utilized their workspace less than 50% of the time... in fact, the average utilization for these people was 23%. Consequently the company determined that it needed only 165 desks to house the 650 newly found mobile workers. This freed up nearly 500 desks, which are now available for new employees.
This may seem like its cutting it close, but other factors come into play. The remaining 3,900 employees who use their desk more than 50% of the time were found to actually use their workspaces 80% of the time, meaning that on any given day over 700 workspaces are going unused. By using a workplace management system, this organization can easily accommodate the growth of 500 people initially and many hundreds more before reaching full capacity.
How to determine Actual Use of Space
The traditional process for measuring space utilization is to perform a manual walk through of the space and record human presence, or "signs of life" (e.g. jacket on chair). This process is often referred to as bed checking. Bed checks are thought to be inexpensive and relatively accurate. In fact, they are neither.
Bed checks are labor intensive, not only for the collection of the data by having people walk around the facilities (a very time consuming and nearly impossible task in a large facility), but also for the people who take the huge amount of data collected and manually enter, or consolidate, it in a computer system. This might be feasible for a one-time shot, but to sustain this effort on an ongoing basis is unrealistic.
Bed checks are inaccurate because they need to take place at a specific moment in time for the entire facility. If the room occupant steps away from his or her workspace, or is attending a meeting, the workspace can be mis-classified as unused. The same goes for a person who works offsite in the morning and comes into the office in the afternoon. It's very easy to "see" when a workspace is utilized...it is nearly impossible to "see" when it is not being used that day.
Using infrastructure systems to measure actual use
How do you measure Actual Use of Space? Measuring actual use means recording and analyzing "presence events" as they occur. A presence event is an action that indicates a person has physically used their workspace. No system is 100% accurate, but close approximations can be deduced from existing data records. Data can be gathered from a number of workplace infrastructure systems (security systems, telephone systems, motion detectors, RFID, and other presence sensors) and compiled in such a way as to create an insightful composite picture of the actual use of space. As noted before, the integration of this data with a workspace inventory system, or CAFM system, provides the mechanisms necessary to continually monitor the actual use of space in a transparent and ubiquitous manner.
Measuring the Actual Use of Space is a necessity for organizations to optimize their workspace. Organizations usually find that they can take advantage of their mobile work force by consolidating underutilized work spaces into a pool of workspaces that can be shared by the mobile workers. By doing so, the organization can either shed excess real estate and reap the associated cost savings that can be measured in the tens of millions of dollars, or add hundreds of new employees without expanding their facilities. The key to Measuring Actual Use of space is to gather use data in a transparent and ubiquitous manner that insures accuracy and is sustainable. Systems integrated into the infrastructure of the organization (e.g. security or telephone systems) provide the data gathering, analysis, and report presentation needed by executives to make informed decisions that lead to maximizing the potential and use of corporate real estate.