According to IWG, the shift towards hybrid work is a positive towards talent retention and attraction, especially among the emerging cohort of Gen Z workers. (Picture: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - According to international workspace company IWG, the business world is closing in on a milestone inflection point where more than half of the world’s professional employees embrace and adopt a hybrid working model.
In its latest report, 2023 Trends Forecast for the Future of Work, IWG says that this workplace mindset evolution might occur within the next five years. When it occurs, the proportion of professional employees working out of a single location will be in the minority for the first time.
“Hybrid working is now the preferred solution for millions [of people] as they divide their working hours between company headquarters, a local flexible workspace and their home,” says Mark Dixon, CEO of IWG.
This method of balancing different working environments boosts corporate productivity and is a more sustainable way of working, says Dixon. “It is clear that yet more change is on the way, as our working lives are impacted by innovations and new thinking in areas such as sustainability, technology, recruitment and productivity.”
One of the future trends predicted by IWG is a fundamental corporate mindset shift as companies focus on outcomes, rather than count the total number of hours employees work in a week. “Productivity is increasingly a priority for businesses, especially in uncertain economic times,” says IWG.
An increasingly popular idea is the four-day work week, an often-discussed but rarely implemented corporate policy.
According to IWG, the year ahead will see more companies adopt the four-day week model, with the caveat that they are confident that it will not result in a drop in overall productivity. Surveys by IWG also seem to indicate that employees who demand improved work flexibility and a healthier work-life balance tend to embrace this model as well.
The latest addition to IWG’s line-up in Singapore is a Regus centre at Hiap Hoe Building in Zhongshan Park. (Picture: Samuel Isaac Chua/The Edge Singapore)
The presence of Gen Z workers will help to accelerate this trend, as 55% of Gen Z workers surveyed by IWG say that they expect the four-day work week to become the norm in the next few years, the report says. Gen Z is the demographic cohort born between the late 1990s and early 2010s.
However, companies should not see this as a means to slash salaries by a fifth, says IWG. Workplace trials for the four-day week model typically adopt a 100:80:100 model — this means 100% of the pay for 80% of the time, and a commitment to maintain 100% productivity.
Read also: IWG eyes growth in decentralised locations as companies embrace hybrid working
Technology will continue to propel the shape of future workplace trends through advancements in virtual reality (VR) and the use of artificial intelligence (AI), says IWG. The promise of a virtual workspace has convinced companies such as Meta and Microsoft to roll out various workplace tools for VR, and some companies are investing in creating their own virtual spaces and real estate.
As a result, the idea of working from anywhere around the world will increasingly become a reality for more workers.
As one of the largest operators of flexible workspaces in the world, IWG points to its 3,500 locations across 120 countries as a means for these itinerant workers to plug in and work.
“It makes sense for those who want to experience more of the world while also continuing to work as efficiently and as comfortably as they might previously have done at home, in an office close to home or at a central HQ,” says Dixon.
In Singapore, IWG has 22 locations. It has deployed four of its flexible workspace brands here: Regus, Spaces, Signature by Regus and the luxury No18. Its most recent location is a 10,328 sq ft Regus centre at Hiap Hoe Building in Balestier’s Zhongshan Park.
Technology is also being deployed to help landlords and employers better understand how spaces are utilised. “Companies are gathering insights from multiple sources such as employee productivity and environmental data, which includes heat, noise, humidity and power usage to shape the office of the future, while minimising environmental impact,” says Dixon.
This greater awareness of their environmental impact comes as companies place sustainability as a vital part of their corporate agenda, says IWG. It says that more property owners are upgrading their facilities and developments to offer best-in-class sustainability features. In addition, a growing number of corporate tenants want to sign so-called “green leases”, which allow owners and occupiers to work together to make buildings more sustainable and less environmentally harmful.
Typically, the provisions of a “green lease” cover issues such as carbon emissions, compliance with local energy efficient regulations, waste reduction strategies and green transport measures.
This focus on sustainability ties in well with the rise of hybrid work. On the one hand, companies downsize their corporate real estate portfolio and focus on high-grade and environmentally efficient buildings and workspaces. On the other hand, a decrease in daily commuting by employees contributes to a cleaner and greener environment.
IWG has launched four of its brands in Singapore: Regus, Spaces, Signature by Regus, and the luxury No18 at Capitol Singapore (pictured) (Picture by: Samuel Isaac Chua/The Edge Singapore)
In its report, IWG cites research from Deepki, a real estate ESG data intelligence service, which found that most sustainable buildings in Europe reap increased asset values for commercial real estate managers. In general, this benefit translates to a 16% to 28% increase in property values. This is due to a greater willingness among tenants to pay a higher rent to be in an energy-efficient building.
In addition, research by global real estate consultancy Cushman & Wakefield indicates that Leed-certified Class-A office space generates a psf premium of 25.3% compared to non-certified buildings. Leed (Leadership in Energy and Environmental Design) is the most widely used green building rating system in the world. In Singapore, the Green Mark certification is a similar green building system tailored for buildings in a tropical climate.
All these factors are contributing towards a so-called “Great Lease Resignation”, a term coined by Dixon. This refers to corporate tenants shunning conventional long-term office leases in favour of more flexible arrangements.
This trend is likely to accelerate as more leases expire and companies seek to capitalise on the cost-saving benefits of hybrid work. The shift towards hybrid work will also contribute positively towards talent retention and attraction, especially among the emerging cohort of Gen Z workers.
On the other hand, this means that time spent in the office is even more precious, says IWG. The report says that “connecting and collaborating in person is an essential part of the hybrid equation. But it needs to be done in an intentional way. Just announcing anchor days doesn’t cut it — team days need to be planned and have a clear purpose. And the same goes for meetings”.
Dixon says: “The most successful companies are now very focused on how meetings work. It’s not enough anymore just to schedule a meeting and then try to wing it. If people are going to make the effort to come together in the office, it’s essential their time there is spent productively.”
The future of work continues to be led by a focus on enriching the workplace experience of employees, utilising new technologies to boost efficiency and productivity, says IWG. A greater awareness of sustainability and well-being will also colour much of the discussions on the future of work.