The holistic nature of office space now trumps occupancy, according to CBRE, which is emphasizing effectiveness over efficiency in its latest report.
Utilization remains the most crucial metric but planning metrics such as sq. ft./sq. m. per person and sq. ft./sq. m. per seat has been replaced with workplace performance metrics such as employee sentiment and attendance or show-up rate.
This will better measure the reality of how space is performing, the firm said.
As an example, consider the story told by the top two metrics: occupancy rate and utilization rate.
CBRE spelled it out in numbers: Space-sharing has enabled global office occupancy rates over 100%, meaning there are more people assigned to an office location than there are workspaces at that location.
But the actual global space utilization rate remains under 40%, which means that despite how many people are planning to use an office location, less than 40% of the workspaces get used in real life, it said.
A low utilization rate that exposes an imbalance of space supply and demand equates to too few people using too much space. Hybrid working arrangements have brought occupancy rates are over 100%, meaning that offices have more people than seats, CBRE said, bunking the traditional, opposite comparison.
Workplace effectiveness measures how well the combined physical and digital work experience supports the unique business and cultural goals of an organization, according to CBRE.
It is now measuring the impact of the work experience on employee and business performance such as employee sentiment and talent retention, creating a better understanding of the true value and ROI of workplace investments, the firm said.
For businesses using a hybrid workplace, CBRE recommends a scorecard that goes beyond traditional real estate metrics to show the broader impact the workplace has on employee performance, business priorities and financial/ ESG objectives. These can include:
Employee Experience: Capturing employee sentiment and validating it with recruiting/attrition metrics provides a more holistic view of worker satisfaction, according to the firm.
Organizational Dynamics: Strong organizational dynamics are imperative to driving office attendance and a well-connected workforce, especially for employees who view the office as a place for building relationships more than for completing individual work.
Financial: Having a clear understanding of which office elements have the best ROI is the key financial metric for organizations minding their dollars.
ESG: Environmental, Social, and Governance considerations form the three main pillars of ESG, and they have come into play for companies assessing their ability to meet their goals for the workplace of the future.