IWG-Arup: Hybrid work may slash businesses’ real estate costs by up to 55%

SINGAPORE: As much as hybrid work could improve employee productivity and reduce employee turnover, it could also cut businesses’ real estate costs by up to 55%, Singapore Business Review reported, citing a US-modelled survey by the International Workplace Group (IWG) and global engineering consultancy Arup.

HR Asia reported this could save firms about US$58 billion (S$74 billion) each year by 2030 and up to US$122 billion by 2045.

The IWG Hybrid Working Productivity Report also found that hybrid work could add US$219 billion in Gross Value Added (GVA) each year by 2030 and up to US$566 billion by 2045, thanks to increased productivity, lower staff turnover and replacement costs, and portfolio savings.

The report said productivity could rise by 11% as employees benefit from shorter commutes, fewer distractions, and more time focusing on their tasks. It also found that up to 40% of the time spent by workers on commuting was spent doing more work — adding about 170 extra productive hours per employee each year.

In fact, employees in flexible workspaces were 67% more likely to rate their productivity as “excellent” than those working from home.

At the same time, flexible setups could lower voluntary turnover by as much as 20%, leading to potential yearly savings of US$22 billion in recruitment and training costs by 2030 and up to US$45 billion by 2045. Notably, employees are three times more likely to stay in jobs that offer flexible work options.

Singapore Business Review reported, citing a Knight Frank survey, that 30% of business leaders in the city-state now consider flexible working a key part of their real estate decisions.

Dr Issac Lim, a social scientist and founder of Anthro Insights, said Singapore is “particularly progressive” when it comes to hybrid work. However, he noted that “to unlock true productivity, businesses must be intentional—designing flexible structures around the nature of work, technology, and outcomes.”

In the city-state, Gen Z workers reported higher job satisfaction (77%) and better work-life balance (34%) through hybrid work.

In September, a study by IWG and consultancy Development Economics also found that 76% of workers saved money each month by working closer to home. For example, a 27-year-old office worker in Singapore’s Central Business District could save around S$3,900 a year by working closer to home just two days a week. /TISG

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