Understanding your occupancy rate isn't just about counting heads—it's about making smarter decisions with your most expensive asset. For workplace leaders managing office space, tracking this metric helps you optimize resources, cut costs, and create spaces that actually work for your teams.

What is occupancy rate?

Occupancy rate measures how much of your available office space is actually being used at any given time. It shows the percentage of occupied space compared to total available space in your workplace.

The occupancy rate formula reveals how effectively your real estate serves your organization. If your office has 100 desks and 60 are in use on a typical Tuesday, your occupancy rate is 60%.

This important metric helps facility managers and workplace leaders make data-driven decisions about space optimization. Real estate investors also use it to gauge property performance, while organizations rely on it to support hybrid work models and reduce wasted space.

How to calculate occupancy rate

The occupancy rate formula is straightforward:

Occupancy Rate = (Occupied Space / Total Available Space) × 100

Let's break this down with real office examples:

Individual workstations example: Your company leases an office with 150 desks. On Monday, 105 employees check in to work.

• Occupancy rate = (105 / 150) × 100 = 70%

Meeting rooms example: Your office has 10 conference rooms. During peak afternoon hours, 7 rooms are occupied.

• Occupancy rate = (7 / 10) × 100 = 70%

Office floor example: A 20,000 square foot office floor has capacity for 200 employees. Today, 85 people are using the space.

• Occupancy rate = (85 / 200) × 100 = 42.5%

The formula stays consistent across different space types. Office space occupancy might track desk usage, meeting rooms, or entire floors, depending on what you're measuring. Most organizations track multiple occupancy metrics to get a complete picture of workplace utilization.

Why occupancy rate matters for your business

Tracking your occupancy ratio delivers insights that directly impact your bottom line and operational efficiency.

Cost savings and real estate optimization

Real estate costs rank among the largest expenses for most organizations. Companies can save an average of $11,000 per employee annually by optimizing workspace usage with hybrid work models. When you know your actual occupancy patterns, you can right-size your footprint, renegotiate leases, or shift to flexible workspaces.

Lower occupancy rates signal opportunity. If your office consistently runs at 40% occupancy, you're funding empty desks that could be eliminated or repurposed. Space optimization based on real occupancy data allows facility managers to fine-tune layouts, reduce square footage, and maximize every dollar spent on rent.

Data-driven decisions for workplace strategy

Making informed decisions requires actual data, not assumptions. Occupancy rate measures provide the foundation for strategic planning about space requirements, team schedules, and resource allocation. Modern workplace leaders track desk usage, meeting rooms, and common areas to understand how space truly gets utilized.

When organizations shifted to hybrid work, tracking occupancy patterns revealed nuanced insights—Tuesdays and Wednesdays saw peak usage, while Mondays and Fridays remained quiet. This data enables smarter scheduling and space allocation aligned with actual behavior.

Improved customer experience and workplace satisfaction

High occupancy doesn't always mean success. An office running at 95% occupancy might sound efficient, but overcrowded meeting spaces frustrate employees and limit collaboration. The goal isn't maximum capacity—it's creating an environment where people can do their best work.

Understanding your property's occupancy rate helps you balance space types. If meeting rooms consistently hit 100% occupancy while individual desks sit empty, you've identified a space requirements mismatch. Workplace occupancy data reveals these patterns, allowing you to reconfigure layouts to better serve how teams actually work.

Understanding occupancy rate vs. vacancy rate

While related, occupancy and vacancy rates tell different stories about your office performance.

Vacancy rate shows the percentage of unoccupied space:

Vacancy Rate = (Vacant Space / Total Space) × 100

Using our earlier example with 150 workstations and 105 in use:

• Vacancy rate = (45 / 150) × 100 = 30%
• Occupancy rate = 70%

Notice they're opposites—vacancy rate plus occupancy rate always equals 100%. Real estate investors often prefer vacancy rate when evaluating properties, as it highlights unused capacity that represents lost revenue. Workplace leaders use both metrics together—occupancy shows what's being used, while vacancy reveals opportunity for space reduction or reallocation.

What is a good occupancy rate for office spaces?

There's no universal target that works for every organization. A good occupancy rate depends on your industry, company culture, and strategic goals.

Global workplace utilization reached 40% in early 2025, representing a new normal for hybrid work environments. North America sees lower workplace occupancy at around 26.5%, while regions like the UK maintain an average occupancy rate of 51.5%. These variations reflect different cultural approaches to hybrid work and office expectations.

The correct occupancy rate balances several factors: cost efficiency, employee satisfaction, operational flexibility, and strategic business objectives. An office running at 85% occupancy every day might need more space, while consistent 30% occupancy suggests opportunities to downsize and reduce costs.

Many organizations find that 60-75% average occupancy provides the sweet spot—enough utilization to justify the space while maintaining flexibility for peak days, collaborative work, and employee comfort.

Common occupancy rate challenges in hybrid workplaces

The shift to flexible work created new complexities in measuring and optimizing workplace occupancy.

Fluctuating patterns and unpredictable usage

Traditional offices operated on predictable schedules. Hybrid work destroyed that predictability. Now, Tuesday might hit 70% occupancy while Friday barely reaches 25%. This variability makes planning space requirements significantly harder.

Organizations struggle to determine optimal space when usage fluctuates dramatically. Real-time occupancy tracking helps navigate this challenge by revealing actual patterns rather than relying on outdated assumptions about used space.

Balancing cost with employee needs

Lower occupancy saves money, but employees still need access to quality workspace. Cutting too much space creates crowding on popular days, forcing people to compete for desks or meeting rooms. This damages the workplace experience.

The balance requires understanding not just average occupancy but peak demand by space type. Your data might show low overall occupancy but high demand for collaboration areas. Removing desks while adding more meeting spaces could simultaneously reduce square footage and improve functionality.

Measuring multiple space types simultaneously

Modern offices contain various space types—individual desks, phone booths, meeting rooms, collaboration zones, and quiet areas. Each may have different occupancy patterns. A desk might sit empty while meeting rooms are fully booked, or vice versa.

Facility managers need to track occupancy across all these space types to understand true utilization. This complexity requires sophisticated workplace analytics that can measure different areas simultaneously and reveal how employees actually use the office.

How to improve your occupancy rate

Optimizing occupancy requires both strategic planning and the right tools to measure workplace occupancy effectively.

Implement flexible workspace solutions

Hot desking, office hoteling, and desk booking systems allow organizations to reduce total desk count while maintaining adequate capacity for actual usage. Companies implementing office hoteling typically operate with 0.3 to 0.7 employees per desk compared to the traditional 1:1 ratio, directly reducing real estate costs.

Flexible seating works best when paired with proper booking technology. Employees need easy ways to reserve space when they plan to come in, and managers need visibility into occupancy patterns to stay competitive.

Use data to drive space planning

Measuring occupancy consistently over time reveals patterns that inform smarter decisions. Track metrics like peak usage times, popular collaboration spaces, and underutilized areas. This data empowers workplace leaders to make informed decisions about reconfigurations, downsizing, or expanding specific space types.

Organizations using workplace analytics report better alignment between space investment and actual business needs. McKinsey research indicates that office demand could be 13-20% lower by 2030 in many cities, making data-driven space planning essential.

Right-size your real estate footprint

Armed with accurate occupancy data, many organizations discover they're paying for far more space than required. Office utilization rates globally remain around 40%, meaning companies could potentially reduce footprints by 30% or more without impacting employee capacity—eliminating wasted space.

Consider alternatives like on-demand coworking spaces for overflow capacity. This approach provides flexibility to scale based on actual demand rather than locking in long-term leases for uncertain future occupancy.

Optimize for purpose, not just capacity

The goal isn't simply filling seats—it's creating spaces fit for how people actually work. If your hybrid work model brings employees to the office primarily for collaboration, allocate more space to meeting rooms and team areas than to individual desks.

Organizations that align their physical environment with work patterns see higher satisfaction alongside improved occupancy efficiency. Employees use spaces they find valuable, while underutilized areas get repurposed or eliminated.

Tools and technology for tracking occupancy

Modern workplace management relies on technology to collect accurate occupancy data and generate actionable insights.

Occupancy sensors and IoT technology

IoT sensors provide real-time data on desk usage, meeting room occupancy, and foot traffic patterns throughout your office. These devices track occupied spaces, eliminating the need for manual counts or estimates.

Sensor data aggregates over time to reveal trends: which days see peak occupancy, how long people typically stay, and which neighborhoods or zones get the most traffic. This granular information enables targeted optimization rather than broad guesswork about occupied seats.

Integrated workplace management systems

An integrated workplace management system (IWMS) combines occupancy tracking, desk booking, room scheduling, and analytics into one platform. These systems connect different data sources—badge swipes, calendar bookings, sensor readings—to provide a comprehensive view of how your workplace operates.

‍

Booking and scheduling platforms

Desk booking systems serve double duty: they help employees find available workspace while simultaneously generating occupancy data for managers. When employees reserve desks or meeting rooms in advance, you gain predictive insights about upcoming occupancy alongside historical patterns.

These platforms reduce friction in hybrid work by ensuring people can secure appropriate space when they come to the office. Understanding no-show rates and booking patterns helps you fine-tune your space allocation strategy.

Best practices for measuring and reporting occupancy

Collecting data is only valuable when you can act on it. Follow these principles to get maximum impact from occupancy tracking.

Define clear metrics aligned with business goals

Start by identifying what you're trying to achieve. Are you focused on cost reduction? Improving employee experience? Supporting growth without expanding real estate? Your goals determine which occupancy metrics matter most.

Track multiple related measurements: overall occupancy rate, peak occupancy, occupancy ratio by space type, and trends over time. Avoid focusing on a single number without context—40% occupancy paired with high employee satisfaction might be perfect for your organization.

Collect data consistently across time periods

One day's snapshot doesn't reveal much. Measure occupancy consistently across weeks and months to identify reliable patterns. Account for seasonality, team schedules, and business cycles that affect when people come to the office.

Consistency in measurement methodology matters too. If you switch from manual counts to sensor data mid-year, note the change in your reports to avoid false conclusions about trends.

Share insights with stakeholders

Occupancy data supports decisions across multiple functions—real estate, HR, IT, and executive leadership all benefit from understanding space usage. Create regular reports that highlight key trends, note significant changes, and connect the data to business impact.

Make insights accessible and actionable. Instead of just presenting a 35% occupancy rate, explain what that means: "We have capacity for 50% more employees without adding space" or "This supports our plan to increase hybrid office days from 2 to 3 per week."

Combine occupancy with other workplace metrics

The occupancy rate doesn't tell the full story. Combine it with employee engagement scores, collaboration metrics, productivity indicators, and satisfaction surveys to understand the total amount of value your office delivers.

Organizations that excel at space management don't optimize occupancy in isolation—they balance efficiency with experience, using data to create workplaces where people actually want to come together.

‍