Fatima Koning, Group Chief Commercial Officer, IWG— (IWG)
Of the many changes wrought by the Covid-19 pandemic, among the most significant is a permanent shift in the way we want to work. Long periods of home working turbo-charged a revolution that had been underway for many years - speeding up the shift away from a traditional, office-based 9-5 towards the hybrid model.
When the virus receded and a new normality took shape, firms were faced with a choice: push their people back into tired routines, or follow the lead of forward-looking businesses. Some of these had embraced the hybrid model pre-pandemic, already aware of its potential to boost employees’ happiness, improve recruitment and retention and shore up the bottom line.
This way of working - which empowers employees to split their time between the company HQ, a local flexible workspace and home - offers continued opportunities to collaborate with colleagues, as well as the convenience of regular remote working. Put simply, it’s the best of both worlds.
In the aftermath of Covid-19, most executives understood that reverting to old patterns meant disregarding the evidence in front of them: ignoring the proof that people are happier, and no less productive, when they’re able to work in a hybrid manner.
Three years on from the declaration of the first national lockdowns, companies that took tentative steps towards adopting the hybrid model are now adopting it wholesale - fully convinced of its benefits for people, profits and the planet.
Better for people
It isn’t hard to understand why hybrid working is better for people than travelling to and from the office each day. IWG’s latest research shows that hybrid workers may get 71 extra hours of sleep per year - and are able to exercise for 90 minutes longer each week - than they did pre-pandemic. The study asked 2000 workers about lifestyle changes they’d experienced since going hybrid. 54% said they had more time to spend cooking nutritious food, while almost half said they were eating more fruits and vegetables than before. Perhaps unsurprisingly, many hybrid workers have also lost weight, with almost a quarter saying they’d dropped 10kg or more.
I’m not alone in finding that the freedom to work locally for part of each week makes a crucial difference to how successfully I can balance my career with taking care of myself and my daughter. Research shows that people who are able to reduce how much time they spend commuting consistently report improved wellbeing - and this is a key reason why they’re keen to retain remote work in the future.
Arvind Kumar, Global Vice President of Indirects at NTT Global Sourcing - an IWG partner - explains: “Covid-19 has helped us redefine how people work and who should come to an office - especially in countries such as India, where people can be stuck in traffic for three or four hours a day.”
Luigi Sciabarrasi is Corporate SVP of Global Real Estate at AECOM, which partnered with IWG in 2022 and now provides employees with access to 3,500 flexible workspaces around the world. He sums up the hybrid approach to people management: “At AECOM, we really want people to take the time to go to their son’s game, or drop their daughter off at school, or take care of their parents. It’s about being a company that cares, and providing that flexibility is so valuable.”
‘Valuable’ is the right word, according to another IWG study. We found that 72% of people would rather forgo a 10% pay rise than give up the option to work in a hybrid way. According to Microsoft’s Work Trends Index, 53% of employees are more likely to prioritise their wellbeing over work than before the pandemic - and it’s clear people understand the power of the hybrid model to boost mental, physical and emotional health.
Better for profits
Not only are hybrid teams happier and healthier - they bring significant benefits for businesses. Stanford University’s Professor Nicholas Bloom has found that productivity increases by between 3 and 4% among hybrid workers - a significant jump that’s directly related to the autonomy the model offers.
Hybrid workers are also more likely to be loyal to their employers, according to Bloom. His research shows that ‘quit rates’ reduce by as much as 35% when people are allowed to work in a hybrid fashion.
Meanwhile, adopting the hybrid model can offer significant cost savings. Analysis by Global Workplace Analytics shows that firms can save up to $11,000 per year, per hybrid employee.
The opportunity to reshape real estate portfolios is a major benefit of the shift to hybrid. Downsizing city-centre HQs - and reimagining them as spaces for occasional collaboration rather than the daily grind - can yield significant savings. IWG partner Cisco, which has a long-established tradition of flexible working, reports that its adoption of the hybrid model has saved the firm around $500m over the last five years.
Just as importantly for the C-suite, it’s clear that people now expect hybrid working; flexibility is key for attracting and keeping top talent. As Sciabarrasi says: “If your employees can do their job remotely and they’ve got all the digital tools they need, if productivity is up and your clients are happy, what are you forcing them into the office five-days a week for? They’ll simply move on.”
Christian Bigsby, VP of Workspace Solutions at Cisco argues that the hybrid model offers exciting opportunities for recruiting the brightest and best. “We can now go after the best possible talent, wherever that market is,” he points out, “and we don’t need to have a headquarters within a thirty mile commute.”
AECOM’s slow but steady adoption of the hybrid model mirrors that of many firms. From 2016, and starting with locations where it had leases expiring, the company began reviewing its real estate needs. “Now,” explains Sciabarrasi, “50% of our properties around the globe have gone through some sort of transition.”
In my role as Chief Commercial Officer at IWG, I work with business leaders from across the globe on creating bespoke hybrid working solutions. For NTT, we focused on making sure its wide range of employees would all have a workspace that felt ‘right’ for them. “We love that IWG has multiple brands,” Kumar says. “Its global presence and customisable spaces mean we can configure things as needed. Together, we’ve built a new real estate strategy that really adds value to the company.”
Altogether, it’s clear that hybrid firms are more productive and profitable. Data from Accenture reveals 63% of high growth companies have embraced ‘productivity anywhere’ models of working, while 69% of negative or no growth companies remain committed to dictating where people work from.
Better for the planet
The shift to hybrid working can also make a meaningful difference in the fight against climate change. Our latest research on the environmental impact of hybrid working was conducted in partnership with Arup, a global leader in sustainable development. The study showed that adoption of the hybrid model can reduce individuals’ daily carbon emissions by between 49% (in London) and 90% (in Atlanta).
The groundbreaking study - which analysed the environmental impact of hybrid working in six cities across the UK and the USA - found that daily commuting to city centre locations had the highest carbon footprint of any way of working. Meanwhile, splitting time between a local flexible workspace, home and the company HQ offered the greatest carbon savings.
IWG has recently achieved one of the most significant milestones in its 30 year history by becoming carbon neutral. We supply more than 8 million customers around the world with carbon neutral workplaces, and have received a strong AA sustainability rating from the MSCI, as well as accreditation from the RE100 for our commitment to sourcing 100% renewable electricity by 2030. Our overall goal is to achieve Net Zero carbon emissions by 2040.
In addition, we deliberately design flexible workspaces that are as green as we can make them. Our Spaces location in the heart of Oslo is a great example of this commitment to sustainable development.
This upgrade of a tired 1950s building used only reclaimed or recycled materials from refurbished or demolished sites around the city, including offices, a school and even a care home. Where new items had to be created, these were also made from repurposed materials.
Overall, this use of existing products reduced CO2 emissions by up to 95% - a positive environmental impact that all users of the space share a stake in.
Embracing a bright future
“There’s no doubt in my mind that Cisco is never going back to full occupancy, five days a week in an office,” says Bigsby. “That’s going to be true for many industries.”
Dell Technologies first partnered with IWG in 2020. CEO and Chairman Michael Dell argues that hybrid working is “ a philosophy of flexibility, choice and connection - and our business results show it’s working for us.” Its obvious advantages, Dell says, mean that hybrid is here to stay: “We have committed to allow team members around the globe to choose the work style that best fits them. I believe this model will eventually be embraced as the future of work.”
The world of work has changed dramatically. Millions of people are now empowered to work more flexibly and productively - and they are happier for it. In the past year alone, IWG has welcomed 2 million new customers to our flexible workspaces - and at some point in the next five years, it’s expected that the proportion of professional employees embracing the hybrid model will pass 50%. For the first time, those travelling to and working from a single location will be in the minority. I’m excited about the opportunities this new, modern era offers. The hybrid model doesn’t just revolutionise the way people work, it revolutionises the way they live - and it’s a transformation I’m incredibly proud to be part of.
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