Hybrid working saves businesses $14,300 per employee on average

Mark Dixon, Founder and Chief Executive Officer at IWG

IWG, a flexible global workspace organisation with brands including Spaces and Regus, forecasts that the hybrid work model will continue to accelerate throughout 2022. As Australia’s labour market continues its recovery amidst the easing of workplace restrictions, more businesses are realising the economic, social and health benefits of hybrid working.

How much are flexible company employees saving?

Research shows that the adoption of hybrid work, and utilisation of flexible office space can reduce a business’s bottom line. Firms are now saving on traditionally fixed overhead costs including rent, heating, and support staff, adding up to an average of $14,300 per employee.

This creates substantial savings whatever the size of the firm as this modelling highlights:

  • A global bank with 200,000 employees would make a saving of $2.8 billion
  • A tech company with 20,000 employees would save $282 million
  • It would mean a saving of $28 million for a services company with 2,000 employees.

IWG has shown that three times the number of FTSE 250 firms are looking to use a hybrid office model compared to those looking to carry on in the same way as pre-pandemic.

How are flexible businesses saving money?

Financial savings for businesses aren’t only generated by reducing utilities needed within an office, they can also be created by changing the location of the offices themselves.

Office buildings are typically concentrated in expensive city centres, which often means long commutes for staff. These commutes require both time and money that could be spent elsewhere. Research by the Productivity Commission found that employees can save up to $394 a year on public transport, by embracing hybrid working at least one day per week.

Businesses are also responding to calls for better work life balance from employees. An IWG survey found that almost half of office workers (49%) would quit their job if asked to return to the office five days a week, while three quarters (72%) would prefer the long-term ability to work flexibly over going back to the office five days a week with a 10% pay rise.

Hub-and-spoke locations enable businesses to offer a level of flexibility – enabling employees to work wherever they need to, whether that be at home or at a local flexible office location.

What is the impact of flexible work on the environment?

IWG footfall data demonstrates a large increase in visits to flexible workspaces, with IWG Australia’s centres increasing their footfall by 117.5% in March compared to February. The Spaces at one Melbourne Quarter saw the biggest rise in footfall, up 358.6% from February.

There is also the positive environmental impact to consider, as employees reduce their commuting carbon footprint. Research shows that allowing staff to work from home, at least a portion of the time, could reduce nitrogen emissions, the main pollutant from car exhaust, by up to 10%, as a result of minimising commutes for employees throughout the week.

Finally, hybrid working isn’t just saving money for both businesses and employees, it is also creating a positive impact on employees’ abilities to work and create a work life balance.

A PWC poll conducted last year found that 57% of business leaders said that, thanks to a more flexible working policy, their firms have performed better against productivity measures than ever before, with 4% of business leaders reporting a decline in employee productivity.

IWG Founder and CEO Mark Dixon said, “The rapid global rise in the adoption of the hybrid-work, where firms use tech to give their employees effective remote access and home working, in combination with accessible local centres and head-office sites, is here to stay.”

“Not only do employees benefit from a dramatically improved work-life balance, but the model also represents a significant win for a company’s bottom line as well as employee bank balances. By switching to a hybrid model, businesses can expect to save an average of $14,300 per employee, all while minimising their carbon footprint,” Dixon concluded.


Note: All dollar figures indicated are in AUD