The world's largest hybrid workspace provider, IWG, has just reported record revenue. — Getty Images/The New York Times
Want an idea of how many people are actually back in the office? Just check office leases.
Despite all the noise around bosses ditching remote working and ordering their staff back to their desks, the world’s largest hybrid workspace provider has reported record revenue.
International Workplace Group (IWG) generates revenue by leasing offices and then sub-leasing them on flexible terms. According to the company, over eight million workers currently use an IWG workspace (sometimes under the name Regus or Spaces), in thousands of locations across over 120 countries.
It’s good news for the vast army of people who began working from home in their pyjamas during the Covid lockdowns and want to keep it that way: Room signings with the flexible workspace firm rose 19% in the first half of this year compared to the same period last year, IWG reported.
As a result of employers increasingly taking up hybrid work solutions, IWG posted its highest-ever system-wide revenue at US$2.1bil (RM9.36bil).
In another nod to changing work patterns, the company highlighted in its Q2 earnings statement that “a significant proportion of new room openings are in more suburban locations”.
At the same time, separate research shows that businesses are reducing their permanent footprint.
According to figures from global commercial real estate firm JLL, 48% of clients in major markets – including the UK, Germany, and France – are seeking smaller workspaces in the next three to five years because hot desking and hybrid working means fewer people are in at the same time.
As a result, the desire for downsizing coupled with the uptake of flexible working solutions suggests that the war against working from home is losing steam. For now, at least, it looks like hybrid working is here to stay.
Only one-third of CEOs expect staff to return to the office
It’s not just office lease data that points to a relaxed stance on in-office working – even CEOs themselves have admitted that they’ve had a change of heart.
KPMG surveyed US CEOs of companies turning over at least US$500mil (RM2.22bil) and found that just one-third expect a full return to the office in the next three years.
It’s a complete 360 on their view from last year, when 62% of CEOs surveyed predicted that working from home would end by 2026.
At the time, 90% of CEOs said they were so steadfast on summoning staff back to their towers that they were sweetening the pot with salary raises, promotions, and favourable assignments to those who showed face more.
But now, bosses are backtracking: Nearly half of CEOs have concluded that the future of work is hybrid – up from 34% last year.
Why the change of heart?
Many CEOs dedicated the last year to persuading their employees to shake off their pandemic-era habits, but their mandates were met with resistance – perhaps more than they anticipated.
Research has shown that 99% of companies with RTO mandates have seen a drop in engagement.
Meanwhile, separate data shows that nearly half of companies with return-to-office mandates witnessed a higher level of employee attrition than they anticipated. And 29% of companies enforcing office returns are struggling with recruitment.
In reality, Deutsche Bank’s decision to outright ban staff from working at home on both a Friday and the following Monday was not taken lightly by staff – a large number of its 90,000-strong workforce reportedly started posting critical remarks on the company’s internal messaging board to make their distaste for the new set-up known.
When Grindr enforced an aggressive RTO order, the dating platform lost almost half its workforce in two weeks, including most of its engineering team, causing the company to struggle with technical issues.
Meanwhile at Amazon – where around 30,000 employees signed a petition protesting the company’s in-office mandate and more than 1,800 pledged to walk off their jobs – managers are still complaining that workers are dodging the three-day in-office mandate a year after it was announced.
Perhaps the latest office lease-data shows that the future of work is probably the happy medium of hybrid. – Fortune.com/The New York Times
