Organizations are reevaluating their real estate portfolios in response to changing work patterns and financial pressures. Many are discovering significant opportunities to reduce their physical footprint by eliminating underutilized floors or entire locations. However, making these decisions without precise data risks creating resource shortages and workplace friction that can negatively impact productivity and employee satisfaction.
In the “new hybrid normal,” average workspace utilization is down 50% compared to the pre-pandemic levels. Still, occupancy often varies significantly by location, day of week, and sometimes by individual group or department. No company should hold onto unnecessary floors or create disruption by cutting too much. With workplace analytics, real estate teams can determine space and resource utilization with unprecedented accuracy, making smarter decisions about reducing floors or locations without creating workplace friction.
Why You Need to Assess Workplace Locations and Floors
Organizations across industries are identifying several compelling reasons to reduce their physical workplace footprint:
- Substantial Cost Savings: Eliminating entire floors or locations delivers immediate and significant savings on rent, utilities, maintenance, and services.
- Portfolio Optimization: Many organizations accumulated excess space during periods of growth or acquired properties through mergers that no longer align with current needs.
- Location Consolidation: Bringing teams together in fewer locations can enhance collaboration, streamline operations, and foster a stronger workplace culture.
- Reduced Environmental Impact: Maintaining only the space that’s needed significantly reduces energy consumption and carbon footprint.
- Strategic Reallocation: Redirect funds freed from unnecessary real estate to strategic initiatives, technology investments, or enhancing remaining workplaces.
Traditional approaches to these decisions—based on headcount formulas, lease expiration dates, or subjective assessments of space requirements—often yield suboptimal outcomes. Without accurate utilization data, organizations risk eliminating valuable spaces while maintaining truly underutilized areas. Enter XY Sense Area Sensors.
XY Sense Solution: Area Sensors
XY Sense Area Sensors provide the comprehensive utilization data needed to make confident decisions about eliminating workplace locations and floors. These ceiling-mounted sensors anonymously track how employees use spaces, giving you precise insights into:
- Actual utilization rates across different floors, buildings, and locations
- Peak and average occupancy patterns throughout the day, week, and month
- Comparative utilization between different properties in your portfolio
- Usage of different space types within each location
The continuous, detailed data that XY Sense collects enables strategic portfolio optimization based on actual usage patterns rather than assumptions or sporadic observations.
Essential Metrics and Reports
XY Sense’s Insights Platform delivers key metrics and reports that are critical for planning and executing workplace reduction initiatives:
- Occupancy Count by Facility and Floor vs. Capacity (Daily/Weekly/Monthly): Understand absolute numbers of people using each space.
- Occupancy Count by Facility and Floor vs. Capacity Over Time: Track patterns and trends across weeks and months.
- Percent Utilization of Each Space Type: Identify the most and least utilized resources (desks, meeting rooms, etc.).
- Percent of Time Used for Each Space Type: Understand the duration of use for different space types.
- Percent Fullness by Facility and Floor When Used: Measure density and efficiency of space usage.
Use Sensor Data and Analytics to Cut Floors and Locations
Setting Targets
The process begins with the workplace or finance team setting a target for reducing floors or locations in the company’s real estate portfolio.
From there, you must determine the utilization level of your space on each floor and in various workplace neighborhoods. XY Sense Area Sensors track utilization at the office, floor, area, and individual resource (e.g., desk) level to provide essential quantitative insight. When you first deploy XY Sense Area Sensors, we map your entire office space to track utilization in real-time and over time. That process establishes the capacity of your office.
Benchmark Current Utilization
Determine the current utilization level for each facility and/or floor by consulting the data in your XY Sense Insights Platform. The data is easily accessible via pre-built reports. Benchmark your current utilization levels for resource types, such as desks, meeting spaces, and conference rooms. Dig deeper to understand how utilization varies by floor, area, and resource type.
Determine the maximum capacity utilization level for your facilities or floors. For example, if your hybrid work policy demands people come in on Tuesday, Wednesday, and Thursday, pay particular attention to the utilization levels on those days.
Formulate a Plan
Your next task is to formulate a plan to cut workplace locations and floors by consolidating teams and resources. Your XY Sense Area Sensors and Analytics Platform are invaluable here. If your office has a very low level of workplace utilization, you can achieve space savings without deviating from the traditional 1:1 employee-to-desk ratio. If utilization varies significantly by team, you could reduce the space allocated to low-utilization teams. If your workplace attendance varies considerably by day of the week, you can implement agile seating approaches. For individuals, “Hot desking” eliminates desk assignments, giving employees the autonomy to choose where they sit. For teams, you can designate a “pod” of desks and meeting spaces based on their maximum in-office attendance level.
Many companies hold a significant amount of excess space because they have historically employed a conservative utilization model. For example, targeting a figure like 60% utilization to ensure sufficient resources are always available for people coming to the office. Because legacy methods of calculating utilization, like moment-in-time observation audits and employee surveys, were so inaccurate, companies had to err on the side of holding too much space to avoid resource shortages. With XY Sense Area Sensors and occupancy analytics, you get an accurate picture of current utilization levels and can safely raise your target utilization level.
Continuously Improve
Once you have implemented changes to drive the targeted savings, continue to monitor your workplace to identify additional opportunities for savings. For example, many companies are exploring “floor balancing,” which refers to taking an agile approach to opening floors of a workspace based on expected attendance. Using an agile seating approach, companies can “close” certain floors on low-attendance days and reduce heating/cooling, utilities, and cleaning costs for those areas.
Results and Benefits
Implementing data-driven floor and location elimination based on XY Sense occupancy data delivers several significant benefits:
- Immediate Cost Reduction: Organizations typically achieve 20-40% reductions in real estate costs when eliminating unnecessary floors or locations based on accurate utilization data.
- Optimized Remaining Space: Consolidating into fewer, better-utilized locations often creates more vibrant, collaborative work environments.
- Improved Space Efficiency: Elimination decisions based on data often increase overall portfolio utilization by double digits.
- Enhanced Employee Experience: Properly executed consolidation can improve the workplace experience by bringing employees together in well-designed spaces, rather than spreading them thinly across underutilized locations.
- Environmental Impact: Reducing your physical footprint directly translates to lower energy consumption and carbon emissions, supporting sustainability goals.
Next Steps
The strategic elimination of workplace locations and floors represents a significant opportunity to reduce costs while creating more effective work environments. XY Sense Area Sensors provide the foundation for accurate utilization data, enabling confident decisions about which spaces to maintain and which to eliminate.
By understanding actual usage patterns across your portfolio, you can make targeted reductions that minimize disruption while maximizing financial impact, creating a more efficient and effective workplace network.
Contact us for more information, or request a demo now. Our experts would be delighted to help you explore this and other workplace analytics use cases. Explore the brochures and solutions briefs for XY Sense products.
