What is Office Space Occupancy and Utilization? | Article – HSBC VisionGo

Why it's important to know your office space's occupancy and utilization so you can make the right financial decisions, and how to calculate them.
Management  ·    ·  3 mins read

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Whether you rent or own your commercial property, office space is likely one of your businesses’ largest investments. It might come as a surprise to many, but it can also be one of the most difficult assets for a business to manage. 

The effectiveness of your office space boils down to 2 crucial elements - occupancy and utilization. Although they are related and frequently used interchangeably, each play an important role in gauging the efficacy of a space. 

Let’s put it this way - if you have a difficult time finding out how much of your office space is being used, and for what purpose, then you can't figure out if the amount of space you currently have is enough for now, or for your future needs.

In this article, we’re going to cover exactly what occupancy and utilization are, and the roles they play (both individually and together) in making more efficient and agile decisions for your workplace.



What is space occupancy?

In general, occupancy refers to the measure of individuals in a space. In the workplace, it is represented by the total number of employees physically present in a workspace at a specific time. Keeping an eye on your space occupancy will let you know when the maximum number of people are present in the office, i.e. when all of your meeting rooms or workstations are being used.

To calculate space occupancy, you simply divide occupied square footage by unoccupied square footage. Let’s say your employees occupy 10 square feet out of 50 square feet of available space, that would mean your space occupancy is 20 per cent. 

While this metric is important for space managers to gain an idea of the number of people within a workplace, it doesn’t fully demonstrate whether the use of your office space is fully optimized — i.e. how well you’re able to capitalize on the cost of the space being paid for. This is where space utilization comes in.

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What is space utilization?

Space utilization provides the other piece of the puzzle – not only does it refer to the static measurement of the size of your space, it incorporates space occupancy data to let you understand the rate and frequency at which employees use a particular space. To calculate space utilization, you divide occupancy by capacity. However, it is slightly more complicated than that! 

To get a clear view of your facilities’ utilization rate, a few other metrics need to be taken into account such as:

  • Total space capacity, the usable square footage of your workstations, meeting rooms, storage, etc
  • The number of individuals using a specific area at any given time
  • The space with the highest usage within a specific time frame
  • The total number of individuals entering your office in a day
  • Areas with the highest footfall
  • Space density


These (and a few other) metrics apply to different aspects of space management so you get to pick and choose which ones to apply depending on the situation. But all in all, by calculating space utilization, you gain further insight into space efficiency, have a better handle on managing your company’s resource allocation, and can more easily forecast your company’s spatial needs based on actual data.


Why both variables matter

To put it in the simplest of terms, you can’t make educated decisions about workplace governance without knowing both the occupancy and utilization of space. The two go hand-in-hand – occupancy tells you how many people are in a facility, utilization tells you how those people are interacting within that environment. Together, they’re able to inform you about whether your space is being properly used and how to make tangible improvements too!

For example, you’ve decided to move ahead with a more hybrid work arrangement post-COVID. Therefore, your office occupancy rate is down to 40 per cent and you can now downsize to a smaller office space. But how do you know what workspaces your employees will need?! By making use of space management software (we’ll share more on that next) to show your workspace utilization rates, you’re able to see which spaces are most utilized and create an office better suited to your company’s needs! Neat huh?

How does space management software fit in?

Let us paint you a picture. As a facility manager, you’re already juggling several tasks at any one time – you’re overloaded with daily admin tasks like managing tenant requests and overseeing facility maintenance, let alone having to manually calculate whether your space is being fully optimized. Now imagine having to manage several different properties at the same time!

Space management software essentially simplifies all of that. It automatically tracks and monitors occupancy and utilization metrics to produce reports that give facility managers key insights about how their spaces are being used in real-time and also provides a digital platform from which facility managers can oversee and make changes to their office plans with just a few clicks.

Now you’ve got a better understanding of space occupancy and utilization, as well as the role of space management software, we hope that this article can help you optimize every square inch of your workplace! And if you’re looking for a space management tool to get started, take a look at our free Space Management Software from BOOQED that will allow you to:

1) Manage all your office assets like desks and meeting rooms

2) Replace clunky and manual booking systems, and

3) Start making data-driven decisions about your space.


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Click here get started!

Kathryn Dee
Kathryn Dee
Booqed Limited
Booqed Limited