Hong Kong finance chiefs seen favouring hybrid work arrangements with eye on ‘meaningful boost’ to firms’ bottom lines amid economic uncertainties, IWG says

City’s CFOs are looking at cost savings ‘as they brace for a potential local economic downturn and possible global recession’, Swiss flexible office space provider says
Not only does hybrid working support employee work-life balance and well-being, it also ‘provides a meaningful boost to a company’s bottom line’: IWG CEO

Hong Kong property

Cheryl Arcibal

Published: 8:00am, 26 Oct 2023

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IWG, one of the world’s largest flexible office space providers, said it is seeing hybrid work arrangements catch on in Hong Kong amid high office vacancy rates.

Hybrid work arrangements, which include some combination of working from home, working at a desk in remote co-working spaces and coming into traditional offices, are a way to create significant cost savings.

More than 80 per cent of the over 250 chief financial officers (CFOs) in the United States surveyed by the Switzerland-headquartered company in July said they believed hybrid work arrangements were reducing costs for their organisations, a trend that IWG said it is also seeing in Hong Kong.

“Echoing global economic headwinds, the economy of Hong Kong also faces similar challenges,” IWG said in a statement on Wednesday. “Finance chiefs are looking at cost savings across their businesses as they brace for a potential local economic downturn and possible global recession.”

In Hong Kong, office vacancy rates remained high at 12.7 per cent as of last month, only marginally lower than the vacancy rate of 12.8 per cent in August, according to JLL.

While the “IWG CFO and Hybrid Work Survey” data was generated in the US, similar economic uncertainty is also evident in Hong Kong, IWG said. “Businesses in Hong Kong are [also] adopting hybrid working modes, as they are among the most effective ways to reduce costs.”

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In co-working spaces, tenants typically share facilities such as pantries, washrooms and meeting rooms. Organisations and individuals can subscribe for memberships or lease space, typically with more flexibility than traditional leases, such as shorter tenancies.

Given recent uncertainties, CFOs are implementing various cost-saving strategies, such as reducing new hires, laying off staff and not filling vacant roles, and changing to short-term lease agreements for office space.

In the next two years, 21 per cent of office tenants in Hong Kong are likely to downsize their footprint, according to a Colliers poll released last month.

Beijing among top 3 cities for hybrid work, Hong Kong in 22nd spot, IWG says

“Hybrid working helps businesses stay competitive and resilient, especially in times of economic uncertainty,” Mark Dixon, IWG’s founder and CEO, said in the statement.

“The research shows that CFOs and business leaders are adopting hybrid working for many reasons. Not only does it support employee work-life balance and well-being, but it also provides a meaningful boost to a company’s bottom line.”

IWG is opening two new centres in December in the Greater Bay Area: a Regus centre in Shenzhen’s technology hub Nanshan district and a HQ centre in Guangzhou’s Panyu district.

The company operates 21 locations in Hong Kong under the Regus, Spaces, Signature, HQ and OpenOffice brands. IWG has added 612 locations to its global network since January and plans to add 1,000 more over the next year.

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