As inflation soars and recession fears loom, a survey of CFOs has revealed that cost cutting is already being prioritised – and 80% believe that hybrid working is a solution.
IWG’s annual CFO survey shows that cost cutting is high on the agenda as companies brace themselves for a stormy economic climate. With 91% of senior financial executives believing that a recession is inevitable, and over a third (36%) expecting it within the year, 97% are already cutting costs by more than 10% in preparation.
As such, attention turns to the areas in which companies can begin to adjust their expenditure. Prominent among these is the use of office space, with this year’s survey revealing CFOs see hybrid work as a way to significantly cut running costs, while unlocking numerous benefits for their employees and business in the process.
Cutting down on facilities spend
With independent research revealing that hybrid working could save businesses more than $11,000 per employee per year, it’s little wonder that 82% of CFOs believe hybrid is a more affordable business model. Office space is a major area where companies are looking to make savings, with flexible working practices enabling businesses to cut down on the array of outgoings associated with full-time facilities.
Among global Fortune 500 CEOs, 74% said they plan to reduce office space, with two thirds (65%) of CFOs targeting a facilities spend reduction of more than 10% per year. And the solution? Hybrid working, according to 80% of CFOs questioned. That’s backed up by research in the US, conducted by workplace software provider Robin, which found that 83% of executives expect hybrid work to be a cost saver, and that 60% plan to reduce their owned office space by 50% or more. Global enterprise tech company Cisco did just that, going hybrid five years ago and cutting 50% of its real estate footprint. This saved the company around $500 million.
Many businesses are still using office space inefficiently, but with budgets being cut, it stands to reason that the costs associated with this are being called into question. Indeed, 39% of CFOs are now considering moving entirely to shared office spaces, and half say they’ve already signed up for short-term leases or shared workspaces.
Another benefit is flexibility – particularly important in the face of economic uncertainty. Incorporating flexspace into your workplace strategy means that businesses no longer have to be locked into a lengthy contract, and can scale up or move locations.
But businesses aren’t the only ones to benefit – it’s also a model of working that employees prefer. Of the CFOs surveyed, 53% said they believe their workers prefer hybrid working, and 87% agree that it offers employees a more affordable way of life amidst the ongoing cost of living crisis. This is corroborated by the data, which suggests that workers could save £328 a month on commuting by train and £128 a month by car. No surprise, then, that research shows that 77% of employees say that office space close to home is a must-have for their next job.
Weathering the storm
Economic turbulence lies ahead, and with cost-saving at the forefront of CFOs’ minds, IWG expects demand for hybrid working to continue to accelerate across the world. With that in mind, IWG will be opening 1,000 new spaces in the next year, most of which will be in rural and suburban locations – responding to a 36% rise in enquiries for office space beyond city centres since January.
“Hybrid working helps businesses stay competitive and resilient, especially in times of economic uncertainty,” says IWG Founder and CEO Mark Dixon. “Not only does it support the work-life balance and wellbeing of their teams, but it provides a meaningful boost to a company’s bottom line.”
So, with hybrid already here to stay, the threat of recession looks set to see many more businesses reaping the benefits of this way of working. As the cost of living bites, this will be a win for employees just as much as the businesses they work for.
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