Occupancy vs Utilization: Understanding Key Workplace Efficiency Metrics
Between occupancy vs utilization, which metric should you measure if you have a hybrid office design? Occupancy and utilization are crucial metrics for space planning and facility management.
Although they sound similar and people often interchange them, they have different meanings. Learning the difference between these metrics can lower office operational costs and improve employee productivity and satisfaction.
You can identify faults in your workplace design and alter it to ensure every square foot is productive. This article defines occupancy and utilization and explains the key difference between them.
Space Occupancy – What is it?
Before we compare space occupancy vs utilization, what does the former mean? Space occupancy is the degree to which people have occupied a room, office, building, or desks at any given moment. It refers to the number of people physically present in a workplace.
Often expressed as a percentage, space occupancy answers this question: how many guests or employees are within the premises now? If a conference hall can host 50 people and only 25 are present, the occupancy rate is 50%. You can also say that only 25 people are seated in the conference room.
Traditionally, companies considered the space occupancy metric more important. However, the advancing technology and modern times have caused many companies to adopt more flexible, hybrid workplace designs.
They find that space occupancy rate alone cannot adequately guide their decision-making processes. This is where the space utilization metric comes in.
Space Utilization – What is it?
Space utilization refers to how people use different workstations within an office. How often and intensely do they use these workstations? Facility managers and space planners need space utilization data to pinpoint overcrowded and underused office areas.
Space utilization metric reveals the degree of workspace efficiency and productivity. Often expressed as a percentage, space utilization provides more information than space occupancy.
Suppose a group of users books a conference hall for ten hours, but occupies it for only five. In that case, the hall’s utilization rate is low.
Occupancy vs Utilization: Why do they matter?
Occupancy vs utilization differs in some ways, but why do they matter in the first place? The space occupancy metric monitors physical attendance and a building’s capacity. However, it does not reveal the performance of each workstation within an office.
Presence or signs of life are all space occupancy tracks. When measuring this metric, you want to know that someone was present regardless of how much time they spent in the office. Whether they sat at their desk for eight hours or thirty minutes, the occupancy for that business day would be 100%. Companies often detect occupancy data with IoT sensors.
On the other hand, space utilization matters because it reveals how occupants use each office area. The metric demonstrates space usage, revealing overcrowded and underutilized areas. Even if occupancy is high, utilization of office resources can be low and inefficient.
Space Occupancy Rate vs Utilization Rate: Differences
What is the difference between occupancy vs utilization? If you interchange these terms, here is their main difference. Occupancy is the number of people occupying a workspace at any given time. It refers to the physical attendance rate.
On the other hand, space utilization is a detailed metric that measures how people use every square foot of a building, office, room, collaborative area, etc. Facility managers and space planners use the utilization metric to ask these questions:
- How long do our employees stay at each workstation or workspace?
- Which of our collaboration spaces do different teams choose for their meetings?
- How do total office visits compare from one branch to another?
- What is our peak utilization rate per office location?
- What is our average utilization rate per location?
Space utilization shows how effectively a space serves the intended purpose, while occupancy indicates total attendance. If the occupancy rate is high, utilization will not necessarily be the same.
Measuring Space Occupancy and Utilization: The Formulas
Occupancy vs utilization differences also include formulas used to compute the rates. When calculating office occupancy to know the space that is in use now, you should use this formula:
- Occupancy Rate – The amount of occupied space divided by the available space.
- Utilization Rate – Each space (conference hall, for instance) divided by the number of people utilizing the space.
When it comes to measuring space occupancy, you need precise headcount data. Measuring your space occupancy rate in hybrid working spaces where people come and leave can be tricky. You can use WiFi-based occupancy trackers, seat sensors, and badge swipes.
While you could compare bookings to check-ins to compute your occupancy, your figure might be inaccurate. That’s so because some guests might check in from home, while others might visit the site but not check in.
The best way to measure space utilization is to gather real-time data from different sources. You can extract data from IoT sensors, badge swipes for access control, Wi-Fi logins, and booking systems.
Sometimes people will book a space for a specific period but end up not touching it. For instance, they could book a desk for three days but never use it. If you rely on this, you can think your utilization is high while it is low in reality.
An advanced booking system that automatically cancels a reservation from a guest who does not check in within the selected time can offer more reliable utilization data.
Advantages of Tracking Occupancy and Utilization Metrics
We have noted that occupancy vs utilization metrics are different. Each metric has its pros and cons, meaning you should track and measure both. If you track the two metrics at once, you can expect these advantages:
- Boosts Employee Experience– Occupancy and utilization metrics ensure a hybrid workplace has balanced collaborative and silent spaces. When remote workers come to the office, they can find the places they expect to be vacant.
- Financial Savings – Occupancy vs utilization analysis can show the exact office utilization rate. If you are underusing your space, you can reduce it or convert it into an area most people want to use. That way, you can save a lot in annual rental fees.
- Reduce Space Wastage – You must pay for leased office space regardless of whether you utilize it partially or fully. Thus, occupation vs utilization comparison data can show underused or unused spaces that accrue rent without being lucrative. You can make these areas more operational by splitting them into welcoming meeting rooms. For instance, you can split a spacious 30-seater meeting hall that remains idle most of the time into two collaboration spaces. You can do so without increasing the available square footage at your workplace.
Office planners and facility managers often use occupancy data to make long-term decisions. For instance, they rely on it to determine if a lease renewal for an office is necessary. These managers also use utilization data to make short-term decisions daily.
For instance, they check utilization records to adjust cleaning schedules if they need to reallocate conference halls shortly after the previous meetings end. Ignoring occupancy vs utilization metrics can trigger mistakes that would cost more time and money to correct.
For instance, tracking these metrics can prevent you from signing a decade-long lease agreement on an underutilized or overcrowded office space.
Wrapping Up
Modern workplaces using flexible office designs should know how occupancy vs utilization metrics differ. Occupancy refers to the sum of people who occupy a given space at a certain time. Space utilization metric reveals whether you use different areas of your workspace effectively.
It shows the total number of people using the available spaces, the time they take, and how often they come back. Measuring both metrics can help you create the most profitable and best-performing workspaces.
