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Published: 21 December 2023
Contributors: Amanda McGrath, Alexandra Jonker

What is space management?

Space management refers to the way a business strategically manages its physical spaces to align with its broader goals for productivity, sustainability, profitability, and well-being. It involves identifying ways to use space more efficiently and adapting it to meet current and future needs.

Effective space management considers the needs of employees and customers, as well as overall business objectives. That can mean designing office layouts and furniture arrangements that foster collaboration among employees. Optimizing sales floor plans to improve the customer experience; or making decisions about storage, production, and manufacturing facilities that streamline activities and maximize energy efficiency. The goal is to ensure that each square foot of space—whether in office buildings, retail spaces, warehouses, or manufacturing areas—is serving a purpose.

Why is space management important?

Space management directly impacts productivity, profitability, and customer satisfaction and can shape company culture and business results. For example, a business might redesign its headquarters to include more collaborative spaces, leading to a boost in innovation and teamwork. A retailer might reorganize its store layout to improve customer flow and increase sales. And a manufacturing company might rearrange its production floor for improved workflow and safety, resulting in higher productivity and fewer accidents.

An efficient space management system can reduce the costs that are associated with rent, utilities, and maintenance. And as remote and hybrid working arrangements become more common, many companies are rethinking their use of space and how to enable flexible working conditions both onsite and off-site.

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Benefits of space management

Optimizing physical spaces can have a significant impact on many areas of the business, from financial savings to environmental, social and governance (ESG) goals. The benefits of space management include:

Greater cost efficiency

Office space and other facilities expenditures constitute a significant portion of many companies’ budgets. Optimizing physical spaces helps cut unnecessary real estate and utilities expenses and lead to cost savings. For example, taking a strategic approach to space management allows businesses to make informed decisions about real estate investments, leasing, acquisitions, and more. In a robust economy, companies might expand their real estate or office space, while in a downturn, they might consolidate or reorganize spaces for efficiency.

Organizations can also reallocate spaces that they aren’t using for a more appropriate purpose or even make a case for, or against, the need for an expansion. And by implementing energy-efficient space management practices, companies can significantly reduce their utility bills.

Improved employee experience

A poorly designed workspace can lead to lower employee productivity, decreased morale and increased stress and health issues. However, well-designed workspaces can increase employee satisfaction, boost overall performance and foster a positive company culture. By optimizing office layouts, ensuring healthy conditions (through adequate lighting, temperature control and ventilation) and providing necessary amenities. Businesses can ensure that employees have what they need to perform their roles well and safely.

Moreover, effective facilities management ensures that all equipment and systems are functioning optimally, reducing downtime and frustration among employees; this can significantly decrease absenteeism and increase employee retention.

More workplace flexibility

The post-pandemic shift to hybrid and remote work models has underscored the importance of flexible workplace management. Strategic space management allows businesses to adapt their physical spaces to accommodate these new working styles and build a truly hybrid workplace. For instance, companies may repurpose traditional office spaces into collaborative areas or quiet zones to cater to different work preferences.

Making successful space management decisions means that ensuring employees have access to key resources and technologies, whether they access them in person or virtually. In terms of physical spaces, strategic management may include hot desks or flexible work stations, silent or quiet spaces. These spaces are devoted to deep work and creativity that encourage collaboration, interaction, and brainstorming in a less formal setting. 

Support for sustainability goals

Space management strategies can play a role in helping companies pursue sustainability goals. By optimizing space usage, businesses use only the resources they truly need, which can minimize their carbon footprint. Better facilities management may help institute energy-efficient practices. Such as using LED lighting, installing energy-efficient appliances and by using new technologies to better monitor energy usage—that can reduce a company’s impact on the environment. Space management may also include considerations such as waste management and recycling practices and other ways to promote sustainable business practices.

Key elements of effective space management

Space management is not just about making the most of available physical space. It involves a strategic approach that considers various factors. It hinges on:

  • Understanding business objectives: A clear view of the company's mission, values, and goals are required in order to design spaces that serve the business. Determining space allocation based on business priorities and company culture can ensure that spaces are being used most effectively.
  • Understanding employee experience: Knowing what kind of space team members require to perform their jobs well can inform space management. This includes creating workspaces with adequate lighting, proper ventilation and ergonomic furniture, as well as designing workspace options that accommodate different working styles and preferences.
  • Understanding customer behavior: People visiting the business or patronizing it may have different needs than those who work there. Spaces can also be designed to ensure a positive customer experience.
  • Understanding the space itself: A physical space inventory and comprehensive view of what space is available, how it is being used, and how it may be expanded or altered. Improving the workplace experience is fundamental to space management decision-making.
Common strategies for space management

Primary considerations when formulating a space-management strategy may include:

Space utilization

Well-planned spaces can limit real estate liabilities and support productivity. Space management strategy may consider how to make full use of available space by using multi-functional furniture, creating open spaces and taking advantage of vertical space. It may also mean paying attention to traffic flow, storage needs and attendance patterns, as well as the need for shared spaces such as meeting rooms or collaboration corners.

Workspace design and function

Space management ensures that employees have the physical environment they need to work effectively. Practical furniture, ergonomic workstations, and easy access to tools can help them focus on their tasks, while well-designed lighting and acoustics setups can help limit distractions. Balancing functionality and aesthetics may help create a welcoming environment that reflects the company culture.

Environmental impact

As mentioned, space management can help companies that are looking to improve their overall sustainability. Smart use of space can help reduce the overall carbon footprint, improve energy efficiency and support eco-friendly practices such as recycling and use of alternative energy.

Space management technologies and tools

New technologies are enhancing companies’ abilities to manage their space and guiding decision-making about its best use. Tools such as integrated workplace management systems (IWMS), artificial intelligence (AI), machine learning (ML) and Internet of Things (IoT) sensors can play important roles.

Software solutions and integrated workplace management systems (IWMS)

Software solutions play a pivotal role in space management. Tools such as computer-aided facility management (CAFM) systems allow companies to visualize physical space and assets digitally. Space planning software provides detailed floor plans and layouts, enabling businesses to plan and manage spaces effectively. And space management software can allow for functionalities such as tracking occupancy, managing maintenance schedules and providing real-time updates on space utilization.

An integrated workplace management system (IWMS) is a software platform that consolidates all areas of real estate and facilities management into one platform. It captures and responds to data relevant to issues such as operating costs, energy consumption, maintenance management, floor plans and more. As a tool, an IWMS allows facility and space managers to run utilization reports and use scenario planning for future space allocation. This data can help organizations reduce expenses, adapt to changing occupant demands, make informed decisions about workspaces and meet sustainability goals.

IoT sensors

Internet of Things (IoT) sensors can provide real-time data on space utilization by monitoring issues such as occupancy levels, temperature, and energy use. This data can deliver insights into how spaces are used and identify areas for improvement. For example, if sensors indicate that certain areas are consistently underutilized, companies can repurpose these spaces for other uses. If the data suggests overcrowding, areas may be expanded or restructured to accommodate more people.

Reservation platforms

Room booking systems allow employees to reserve meeting rooms, hot desks, or workspaces digitally, eliminating the need for manual scheduling. Room reservations allow better organization of existing resources and effective office space management. Plus, organizations can evaluate the utilization data from booking platforms to inform future space management decisions. Such as whether more conference rooms are needed or whether hybrid employees are making use of desk booking options.

Other technology solutions

Emerging technologies such as AI and ML also assisting space management. These technologies can analyze vast amounts of data from various sources to identify patterns and trends. For example, AI can predict future space needs based on historical data, allowing companies to plan ahead and avoid unnecessary expenses. Similarly, ML algorithms can optimize space layouts to enhance productivity and employee satisfaction.

Also, virtual reality (VR) and augmented reality (AR) can be used to create virtual models of spaces, enabling companies to experiment with different layouts without physically rearranging their spaces. These data-driven space management tools not only save time and effort by allowing employees to automate tasks, but also allow for more creative and efficient space planning and better asset management.

Who is responsible for space management?

Devising space management solutions typically falls to facility managers or operations managers. However, a comprehensive space management plan is a multidisciplinary effort involving human resources, IT, and finance departments. Collecting and evaluating space data and metrics, making decisions about real estate investments and property management, and creating a safe and efficient work environment. All of these qualify is an effort that can span many roles within a company. And encouraging change in overall workplace strategy may fall to management teams and C-suite leadership.

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