According to a new study by the International Workplace Group of CEOs and CFOs, 60% believe the impact of artificial intelligence (AI) has made it harder to predict their workplace office space requirements over the next two years.
With technology advancement changing productivity, workforce planning and business velocity, leaders are moving away from fixed, long-term real estate commitments and edging towards capital-light workspace strategies.
80% of CEOs mention, that due to the rise of AI, it means organisations require flexibility with workspace or real estate solutions as rapid technological change makes it incredibly difficult to anticipate future space needs.
When asked how technology, including AI, is influencing decisions about where office space is located, 42% said it facilitates remote working and reduces the need for a central office, 39% said it encourages flexible office models, and 37% said it broadens access to global and distributed talent.
99.8% of CEOs and CFOs said their organisation is looking to move real estate costs from fixed to flexible, adopting capital-light models, freeing up capital to invest in the growth and future of their business.
“AI is accelerating the pace of change for every business, and companies that want to succeed need workplace strategies that allow them to scale up or down quickly, reduce unnecessary fixed costs and give their people access to high-quality workspace wherever they need it.
“This is about giving businesses the flexibility to adapt as technology changes. Nobody knows exactly what their organisation will look like in two years’ time, but they do know they need the agility to respond. That’s exactly what the IWG platform is designed to deliver.”
Christian Schmitz, CEO, International Workplace Group
57% are actively investing in hybrid workspace arrangements and 55% are looking to set up a network of locations closer to where employees live, while 52% are considering decentralised workspace models.
Cost is also a central point in location strategy for the C-Suite, with 99% saying cost reduction is a driver in decisions about where to locate office space, and 27% saying it’s their key driver.
As opposed to relying on single expensive city centre headquarters, businesses are building networks of professional workspaces which support hybrid teams, improve agility and give employees access to high-quality office space closer to where they live.
While there are clear cost savings to be made, companies that give their employees flexible locations to work also appear to gain the most productivity. Companies with hybrid working models can deliver an 11% uplift in productivity over the next five years – a steep pull for businesses wanting to manage their retention of the best talent, and their long-term costs.
“AI is not simply another wave of innovation. It is accelerating the velocity of business at a pace few could have imagined, making it far harder for companies to predict what they will need even two years from now. In this environment, long-term office commitments make less and less sense.
“The future belongs to businesses that can move quickly, access talent wherever it is, and give people professional workspace wherever they need it. AI will make creativity, judgement and adaptability more valuable, not less – and flexible workspace gives companies the agility to respond.”
Mark Dixon, Executive Chairman, International Workplace Group
76% of CEOs say the role of the office will become more important for their organisation over the next two years, and 0.8% say it will become less important.
This reflects a growing recognition that companies still need professional spaces for collaboration, innovation and culture, but no longer need to lock themselves into a single fixed location for years at a time.
