Businesses reduce city centre office space as they look to cut spend on property footprint
82% of British business have reconfigured their office footprints to better suit hybrid working, according to new research.
A study conducted by IWG, the world’s largest provider flexible workspace, among UK business leaders found that the majority of these changes have been designed to allow staff to work in offices and co-working locations closer to where they live.
More than half (54%) of businesses now have office or co-working space outside of city centres, while 38% have opted for secondary locations in the heart of commuter towns. As a result, 73% say they have reduced the cost of their office footprint.
These changes have led to significant savings at time when many businesses are facing a touch economic climate and difficult financial decisions. It is estimated that large UK businesses (250 staff or more) have reduced their real estate spend by billions over the past 12 months, largely made possibly by the proliferation of hybrid working.
Re-appraised office footprints lead to savings elsewhere
Companies are benefitting financially from their employees having shorter commutes, with 36% saying they were now paying less in expenses for staff travel. Similarly, the rise of video meetings has not only saved businesses time, but money too, with 37% of businesses saying they now spend less on hosting clients and prospects.
Savings passed on to employees
Many of these savings are being passed on to teams who are dealing with the cost-of-living crisis. More than a third (35%) of companies who reported cost savings said they had offered staff pay rises, while a similar number (30%) increased staff bonuses. 31% said they have paid staff a specific bonus to help with the rising cost-of-living.
There has also been increased investment in staff welfare. 31% of businesses have spent additional funds on employee development and training programmes, while 36% chose to purchase improved technology and equipment for their staff. 30% have enhanced employee benefits and perks or expanded staff welfare programmes.
Global Trend
Separate research by IWG among America CFOs revealed that it’s not just British businesses that are reappraising their real estate requirements. Three quarters (74%) are moving or actively looking to move to shared office or flex space and 64% have already reduced their space to accommodate hybrid work.
81% see hybrid working as a cost saver and more than two-thirds (67%) said their business will continue to work in the hybrid model, splitting time between the company’s headquarters or local office/workspace and home in five years.
Mark Dixon, CEO of IWG, commented: “It’s clear that the old ways of working, with a daily unproductive and expensive commute, are long gone. Businesses are realising that not only does hybrid working make sense for their bottom lines, it also benefits their workforces.
“It’s encouraging to see that businesses are translating their hybrid working savings into real benefits for employees. Not only does this help in the immediate term, with improved productivity and wellbeing, but it will also help them retain and recruit the best talent.”
Productivity and people gains
It is not just company profits that have been benefitted from hybrid working. Two thirds (67%) of business leaders surveyed said that switching to a hybrid working model reduced staff churn, and that their workforce was more productive (65%) since the implementation of the hybrid working model. Happiness levels were also considerably higher with a hybrid workforce, with 86% of business leaders saying their workforce is happier since the implementation, and this across all age groups
This is backed up by academics too. Research by the renowned Stanford University professor Nicholas Bloom found that hybrid workers had higher job satisfaction and a 35% lower attrition rate compared to their office-bound colleagues.
Hybrid working is also enabling businesses to attract better talent. 59% of business leaders said they were able to hire better staff since the implementation of hybrid working model, with 70% agreeing their staff was more engaged since implementation.
