While adopting a hybrid workplace might feel impossible and challenging, in the long run, it is the optimum work model of the future, and it yields countless benefits.
Flexible work models can improve employee engagement, encourage more work-life balance and improve company culture. But did you know that a strong hybrid workplace strategy can also help your business' bottom line?
Let's take a look at how hybrid work is helping workplaces reduce operating costs by improving space utilization.
Reduce Costs by Improving Office Space Utilization
CFOs are not just responsible for helping to achieve the top line, but responsible for all the other lines on the income statement too.
The top two operating expenses for most companies are 1) employee wages and benefits (~70% of total operating expenses) and 2) office rent and facilities expenses (~15%). As the current economic climate pressures continue, finance leaders in companies of all sizes need to lead the charge in reducing office costs while improving employee efficiency/productivity and the vast majority of us (82%) have concluded the best way to do this is to implement a hybrid work model.
In fact, a survey of over 250 business found:
- 97% of CFOs said they have started implementing or plan to implement cost-cutting measures.
- 65% of CFOs targeting a reduction of more than 10% per year and facility spend is on the cost-cutting list.
- 50% have already opted for short-term leases or shared workspaces.
- 82% of CFOs said hybrid work is a more affordable business model.
Clearly, a combination of hybrid work and optimizing office usage can help companies find ways to make better use of their space and, ultimately, cut costs.
So how do we do this?
First, we need to understand space utilization metrics. Space utilization metrics are measures of how effectively your workplace is being used.
These metrics can provide insights into how your space is being used, how much space is needed, and how to optimize space utilization to improve productivity and reduce costs. Here are some common space utilization metrics:
This is the percentage of available space that is currently occupied. It can help you determine whether you have enough space to meet the needs of your workforce.
This kind of data in the workplace also shows daily peak utilization so you better understand how and when people are using the office. With the right space occupancy data, space planning becomes a lot easier.
This metric measures the percentage of available space that is being used. Understanding your average space utilization rate can help you identify which areas of your workplace are underutilized and where space can be optimized.
Keep tabs on things like average peak utilization and resource utilization data in order to learn more about what your employees need and how they are engaging with the office.
Meeting Room Utilization Rate
This metric measures the percentage of time that a conference room or space is being used. It can help you identify which rooms are in high demand and which are rarely underutilized.
Utilization data for rooms can help you identify what resources are most in-demand and inform future planning for meeting room setups. When all rooms are in high-demand, it may be time to carve out some more space for your teams.
Desk Utilization Rate
This metric measures the percentage of time that a desk or workstation is being used. It can help you optimize desk assignments and identify which workstations are underutilized.
Most desk booking tools include this type of reservation data which can also help you forecast future needs.
By tracking and analyzing these different data sources, you can gain insights into how your workplace is being used and can make informed decisions to optimize your office space, reduce costs, and improve productivity.
Using Space Utilization Metrics to Optimize Spaces
The office is the business's flagship, where business contacts and other stakeholders are welcomed and a lot of a company’s culture is built, but a large office in the city center or conveniently located close to public transport usually has expensive rent - not to mention all operation costs such as heating, cooling, electricity, and security.
A hybrid work strategy and active space management enables companies to slim down these costs, so by allowing employees to work remotely for a portion of their time, businesses will reap a wide range of cost savings benefits, including reduced real estate (not to mention technology, travel, and other operational costs) and will experience improved employee job satisfaction thereby reducing turnover.
Furthermore, when employees can use the office at different times on different days, the office size can be reduced since not everyone will be present simultaneously. It gets easier to streamline office management and track and measure how the office is utilized.
A recent study by the research firm Global Workplace Analytics, found companies can save up to $11,000 for every employee working two or three days remotely per week. By providing employees with a range of work location options, businesses can reduce the need for expensive real estate in prime locations, while still providing employees with the flexibility and support they need to do their jobs effectively.
No excess space, no excess costs.
Data Drives Decision so Data Analytics for the Workplace is a Must
Once the office is right sized, managing the workplace becomes more important than ever. The goal should be to remove the guesswork on when and how the office is used. Many businesses realized during the pandemic that their offices stood empty and underutilized. Data analytics for workspaces not only help us finance leaders understand how employees can be more efficient and thrive in the workplace, but also how the right information can be used for better strategic planning.
Data analytics may reveal that employees only use certain areas of the office at certain times of the day or for certain activities. Armed with this insight, we can reconfigure our office spaces to maximize efficiency, reduce wasted space and make the office more conducive to the types of work being done.
For example, a company may find that their employees are now spending a lot more time using the soft seating areas of an office. When they look for a new office space they’ll be sure to see floor plans that prioritize plenty of open, collaborative space to keep employees comfortable and collaborative. Without investing in software to capture this information, companies can’t gauge precisely how investments in office space and facilities coordinate with a company’s strategic plan and the needs of its employees.
Understanding how often employees frequent the office, which areas are used most and for how long, and the levels of interactivity between employees, can provide very powerful, accurate data. We can’t just count people, we also need to account for how they move about and use space over time.
Understanding the behavior patterns of different work teams sharing a space can potentially save companies millions of dollars by analyzing and optimizing how their current spaces can be better used rather than acquiring additional real estate.
Workplace data analytics removes the guesswork from your workplace transformation strategy and informs decisions that solve the office’s evolving needs.
Workplace Data: Don’t Be Afraid to Take the Leap
Office spaces are starting to change, slowly evolving into spaces of collaboration instead of individual work. Optimizing office space utilization and data analytics for the workplace both have great potential not only for employees but also managers running the office.
We all need to better leverage technology that can be used to measure the usage of all office resources throughout the day to help us make strategic decisions about how the office space should change to cater to the new needs of the employees.
As more companies embrace hybrid work solutions, those that fail to adapt risk falling behind. Those that do invest in the right tools and developing the right strategies will stay ahead of the curve and will be well positioned to save money with reduced rent, increased productivity, and lower turnover.