Your Office Space Utilization Metrics are Broken. Here’s How to Fix Them.

Companies often tell us that their space use is 180/SQFT (or similar) per person. Well it almost certainly is not. And it was not before Covid, either, but their Space Utilization Metric is broken.

They may have laid out their space at 180/SQFT per seat, but their staff level is very likely something less than 100% capacity, and the staff’s utilization is certainly far less than 100% of 8-6 M-F availability. Again, let’s presume all of our discussion is Post-Covid, whatever that might mean to your business.

Using the example above, let’s suppose the following:

  1. Space is laid out at 180 SQFT/seat
  2. Employees are 82% of full capacity for the seats available
  3. Utilization at any given time is 60% given staff at client sites, traveling, at lunch or other meetings, home sick or working remote.

Before you discount #3 as being too low, I’ll tell you that before Covid many large Fortune 500 companies who did this exercise found that utilization ran close to 50%. What it will look like in the future, now that everyone knows how to work remotely, is to be determined.

Let’s do the math: 180 SQFT / .82 staff / .60 utilization = 365 SQFT per person

The actual number is often more than double what most execs expect. Being a CFO, these numbers drive me a little bit crazy. [As I write this, from the office, my company is currently at 3,364 SQFT per person. Given, it is the week between Christmas and New Year, but it still makes me wince.]

So here’s how to fix it: You need to monitor utilization. There are a number of ways to do that with office proximity sensors, seat sensors, phone apps, and entry card readers. I recommend anonymous entry/exit door sensors that give you a count of staff in the space at any given time. Then look at peaks (Monday mid-morning) and valleys (Friday afternoon) and use a business day average to understand how much space you need for your next office lease.

Note: Your next office lease does not necessarily need to start after your current lease expiration date. Your landlord, given some incentive of course, might be motivated to tear up that existing lease in favor of a new one now.

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