CFOs see hybrid work as a cost-cutting opportunity

Good morning,

As the return to work debate heats up between employers and employees, the future looks hybrid.

International Workplace Group (IWG), a global flexible-office space provider, shared data with me from a global survey of 250 CFOs that spans industries. Due to the macro-economic environment, 97% of CFOs said they have started implementing or plan to implement cost-cutting measures. And facility spend is on the cost-cutting list with two-thirds (65%) targeting a reduction of more than 10% per year. Half of the businesses surveyed said they have already opted for short-term leases or shared workspaces. The survey also found that 82% of CFOs said hybrid work is a more affordable business model.

“With economic pressures mounting, research shows that CFOs and business leaders are adopting hybrid working for many reasons,” Mark Dixon, founder and CEO of IWG, said in a statement. “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.” IWG plans to add 1,000 new work spaces globally in the next year, due to increasing demand for hybrid work, with the majority set to open in rural and suburban locations, the company said.

Dixon previously told Fortune that companies can cut 50% of their real estate costs by going hybrid. A recent study by the research firm Global Workplace Analytics, found companies can save up to $11,000 for every employee working two or three days remotely per week. Reduced rent, increased productivity, and lower absenteeism and turnover contribute to the savings, the firm said.

Taking a look at New York City, the financial capital of the world, hybrid work has become dominant. A Sept. 15 report by The Partnership for New York City is based on a survey of more than 160 major Manhattan office employers. Seventy-seven percent of employers plan to or currently deploy a hybrid schedule, and just 10% require daily attendance. The remainder leaves the decision to departmental (11%) or employee (2%) discretion.

As of mid-September 2022, 49% of Manhattan office workers are currently at the workplace on an average weekday, up from 38% in April, the report found. However, just 9% of employees are in the office five days a week, and 37% are in three days per week.

Partnership for New York City found the share of employees who are fully remote dropped from 28% in April to 16% as of mid-September. “Return to office rates are projected to increase gradually through the rest of 2022, with 54% of workers expected in the office on an average weekday by January 2023,” according to the report.

Regarding industries, real estate companies had the highest average daily attendance (82%), followed by law (61%), and financial services (56%) firms.

There have been CEOs of Wall Street firms vocal about wanting to do away with remote work. Earlier this month, BlackRock CEO Larry Fink offered a novel argument as to why his company is pushing a return to the office—to help bring down inflation.

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com