Combining flexible workspaces with AI is becoming a core financial strategy enabling companies to cut costs without compromising performance, according to new research from IWG.
Building on insights from The View from the C-Suite report, IWG says flexible work is no longer a “perk”. For finance leaders facing a delicate balancing act to reduce costs, maintain productivity, and invest strategically to drive growth it’s a lever for smarter capital allocation and operational efficiency.
By adopting a mix of central HQs, local flexible offices, and remote work companies can reduce fixed costs, improve margins, and free up resources for strategic investments in AI, automation, and growth initiatives.
Flexible workspaces: A strategic cost-saving tool
IWG’s survey of CFOs shows that more than two-thirds plan to reduce budgets by 5% to 10%, with real estate consistently cited as a top area for savings. Flexible workspaces allow companies to:
- Downsize oversized central offices.
- Move to shorter, more flexible leases.
- Access co-working networks strategically.
These strategies can reduce real estate costs by up to 55% while keeping teams productive and engaged. Beyond rent, savings accrue from lower utilities, cleaning, office amenities, and energy costs. Reinvesting these savings into technology or growth initiatives allows CFOs to do more with less, intelligently.
AI: Driving operational efficiency
AI adoption is accelerating across the C-suite. More than 80% of executives are investing in AI to improve productivity and reduce costs. Organisations already deploying AI report:
- 20% to 40% reductions in operational costs.
- Employees reclaiming nearly an extra day per week to focus on high-value work.
Integrating AI with flexible work models allows finance leaders to maximise efficiency while enhancing employee output – turning cost reduction into a strategic advantage rather than a trade-off.
The local workspace advantage
Flexible workspaces aren’t just about cost; they enhance employee well-being and engagement. By providing professional offices closer to home or clients, companies can:
- Reduce commute times, boosting satisfaction.
- Attract and retain top talent, including caregivers and working parents.
- Maintain collaboration, creativity, and productivity.
IWG research shows 77% of employees say local workspaces are a critical factor in choosing their next role – and hybrid policies can reduce attrition by up to 35%. A “hub-and-spoke” approach – a smaller central HQ complemented by flexible offices – aligns financial efficiency with employee preferences creating a healthier, more productive workforce.
Smarter margins and productivity
Flexible work and AI together deliver tangible results:
- 79% of hybrid workers report higher productivity.
- Time saved from commuting is redirected to strategic, high-impact work.
- Bottom-line improvements of 10% to 20% are achievable through optimised real estate and operations.
CFOs can model different scenarios using tools like IWG’s workspace solutions, understanding how adjusting office footprints and employee distribution impacts costs, productivity, and margins.
The bottom line for CFOs
In a year of disciplined optimism, CFOs are finding that strategic flexibility is essential. Flexible workspaces convert fixed costs into variable ones, AI unlocks operational efficiency, and hybrid models maintain productivity while supporting employee well-being. Together, these approaches strengthen balance sheets, improve margins, and free capital for strategic reinvestment.