Oct 13, 2023
6 mins read
Workspace Spend Management
Office space utilization in the United States is at a breaking point.
Over 20% of office spaces in the United States are currently empty, at least according to a recent NPR report. But they’re still costing businesses millions of dollars, like Meta’s Mark Zuckerberg, who just recently had to pay out $181 million dollars for office space he couldn’t fill.
But even with vacancies rising, pricing for office space per square foot is still high, particularly on the west coast.
So, it’s no surprise that companies, many of which are transitioning to remote or hybrid-first offices, are seeking alternative options to the cost of real estate. Instead, they’re turning to flexible office strategies, like on-demand coworking spaces, to help cut costs and increase employee engagement and morale.
But before that transition can happen, companies need to evaluate their space utilization costs and understand why those metrics are so important.
The basic definition of space utilization is simply the amount of utilized space in an office. In more detailed terms, space utilization examines how the space within an office is being organized and actually used by employees, over time.
While remote work was growing in popularity before the pandemic, COVID-19 definitely showed companies that employees could truly be creative, collaborative, and productive from anywhere. And while many companies are moving toward a hybrid model, that’s leaving a fair amount of office space potentially unused, costing companies thousands or even millions of dollars.
According to YaRooms, here are some important considerations for a company’s space utilization:
Gaining data about office space utilization can help companies create a much more efficient office. One popular approach is the 3-30-300 rule, which outlines how office space utilization and productivity directly impact the building cost.
Using this rule, companies can expect to pay for the following, per square foot:
In short, this means that for every unused square foot of office space, a company is paying an average of $333 per year. And while this might not sound like a lot, this figure can add up tremendously.
A number of companies are tapping into flexible workspace strategies, like on-demand coworking spaces, to help cut back on expenses, while offering an opportunity for employees to connect and collaborate with their own colleagues or those from outside their company. This contributes to a positive work-life balance, better employee engagement, and an overall increase in morale, all of which is a positive attribute for the success of any company.
Here’s why this option is so viable:
As we look ahead to the future of work, the office as we know it has most definitely changed. Finding ways to bring employees and teams together, while keeping costs down, is going to be the defining force of who makes it and who doesn’t.