Half of the world’s largest firms plan to cut office space – here’s why flexspace is the future

A notable shift is happening in commercial real estate. Knight Frank polled 350 real estate leaders at international firms and found that half of those with 50,000+ employees plan to reduce their office space by 10-20% in the next three years. The reason? A shift towards hybrid working patterns. Instead of spending five days a week in a central office, employees blend their time between a local workspace, their homes, and their company's central headquarters.

This change isn't just about adapting to new ways of working; it's also about cost-effectiveness. In fact, according to IWG's 2022 CFO survey, 82% believe hybrid is a more affordable business model than the traditional nine-to-five office grind.

As companies reduce their need for large, permanent office spaces, the demand for flexible workspaces grows. This trend opens a door of opportunity for building owners, property investors, and landlords. By partnering with IWG, they can meet this increasing need for flexspace and capitalise on the evolving landscape in commercial real estate.

Flexspace and hybrid models make business sense.

Many businesses are switching to a hybrid model enabled by a network of flexspaces because a growing body of evidence shows it can benefit their profit margins, people, and the planet.

Profit

When companies downsize their offices and rely more on a network of flexspaces, it can result in significant facility cost savings – Cisco saved $500m in the last five years due to a shift to hybrid working, much of that in its property portfolio. Moreover, an independent Global Workplace Analytics survey recently showed that hybrid working can save organisations an average of more than ZAR 200 000.00 per employee per year.

IWG’s global network of flexspaces allows businesses to strategically position themselves closer to their workforce, clients, or key markets, allowing them to tap into a much broader, location-independent talent pool.

Businesses embracing hybrid enjoy productivity gains, too. A hybrid model in which workers balance time working at local flexspaces, company headquarters and at home has been shown to boost productivity by 3-4%, according to leading economics Professor Nicholas Bloom of Stanford University.

People

One reason for the hybrid productivity boost is that workers are healthier, happier, more engaged, and more energised when they spend less time commuting to city centre offices. Shorter trips to local flexspaces mean employees can reclaim time previously spent in traffic or public transport. This extra time can be spent with loved ones, on hobbies, or exercising regularly.

This move to hybrid work is more than a trend – it's becoming an expectation. This is so much so that IWG's research indicates that half of workers would consider leaving their jobs if forced to return to the traditional office model. In a recent survey of 2,000 office workers, 88% said they would expect the hybrid model to be offered as a key benefit in any new role.

Offering hybrid working options does more than boost productivity. It can also make a company far more attractive to both existing and potential employees, helping to attract and retain talent.

Planet

The environment also benefits hugely from hybrid working. When businesses downsize their property portfolios and rely more on flexspace, it helps them meet their Net Zero targets – and collectively, this adds up to significant reductions in emissions.

Indeed, IWG’s landmark study with ARUP shows that hybrid businesses can reduce urban carbon emissions by a staggering 70% in the UK and up to 87% in the US. That's because they can cut emissions from both commuting and energy use in workspaces.

To put this into perspective in South Africa, let's consider a bustling city like Cape Town, known for its dense traffic and long commutes. The whitepaper concludes, “Overall, taking into account both transport- and building-related emissions, if a worker in Cape Town stopped traditional five-day commuting into the city centre and instead worked close to home, their combined carbon footprint would decrease by 70%.”

The opportunity

Commercial property brokers can capitalise on the growing demand for flexspace by partnering with IWG. We can provide your clients with flexible solutions that adapt as they evolve and offer convenient scalability in unpredictable times.

Discover how an IWG partnership can offer multiple solutions for your clients and increase your chances of making a sale.

About International Workplace Group PLC

International Workplace Group is the global leader in hybrid work solutions and workspace brands. We create personal, financial, and strategic value for businesses of every size, from some of the most exciting companies and well-known organisations to individuals and the next generation of industry leaders. They all harness the power of International Workplace Group's hybrid working platform to increase their productivity, efficiency, agility, and market proximity. ​ ​

International Workplace Group's unrivalled network coverage includes approximately 4,000 locations across more than 120 countries, and 83% of Fortune 500 companies are amongst our growing customer base. ​ ​

Through our brands, including Regus, Spaces, HQ, and Signature, we help millions of people and their businesses work more productively. We provide the world's leading hybrid work platform with professional, inspiring and collaborative workspaces and digital services, all available via the International Workplace Group app.

For more information , visit www.iwgplc.com