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CFOs see hybrid work as a cost-cutting opportunity

September 22, 2022, 10:36 AM UTC
Hybrid work supports work-life balance but can also reduce office-related spending.
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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

Big deal

The 2022 Global Finance Trends Survey, conducted by global consulting firm Protiviti, examines how CFOs are reimagining their long-term roles and their priorities for 2023. A key finding of the survey is a laser focus on ESG (environmental, social, and governance) strategies and reporting. CFOs and finance leaders are devoting more time, attention, and resources to enterprise ESG initiatives. Four in 10 finance organizations are incorporating ESG into more of their sourcing decisions, considering not just sustainability but also social issues, according to Protiviti. The finance teams at both public (77%) and privately-held companies (78%) surveyed are working with boards and senior leadership to develop ESG metrics. The findings are based on a survey of 1,064 CFOs and vice presidents, directors, and managers of finance.

Courtesy of Protiviti

Going deeper

Stepping into the future of controllership: From accounting to insight,” a new multi-national survey report from Deloitte’s Center for Controllership and IMA (Institute of Management Accountants), gauges whether financial controllership is prepared to meet future business demands. A key finding: although 76% or more of finance professionals surveyed said that their companies’ controllership functions have embarked on transformation journeys, almost all (95%) said they have more work to do or aren’t progressing quickly enough. And 65% admit their organization’s controllership function is not fully prepared to meet future demands. “Strengthened demand for infusing flexibility into finance cycles and enabling real-time reporting and insights is transforming the work controllership function members perform, particularly as it relates to analytics and predictive forecasting,” according to the report. The findings are based on a survey of 1,300 finance and accounting professionals, including analysts, managers, controllers, and CFOs.

Leaderboard

Eric Ingvaldson was named CFO at Pineapple Energy Inc., a provider of sustainable solar energy and backup power to households and small businesses, effective Oct. 10. He succeeds Mark Fandrich, who resigned in August. Most recently, Ingvaldson served as the CFO and COO of Kradle. He also led the finance operations of C.H. Robinson’s International Division, where he helped grow the business from $100 million to $2 billion in annual revenue. Ingvaldson was also the finance leader for C.H. Robinson’s acquisitions and divestitures around the world.

Ben Lu was named CFO at Bird Global, Inc. (NYSE:BRDS), an electric vehicle company. Lu succeeds Yibo Ling. He brings over 25 years of diverse and extensive experience in the technology sector and was most recently the CFO of Archer Aviation. Before Archer, Lu was the VP of finance at Logitech International. During his time at Logitech, Lu and the finance team helped scale revenues from $2 billion in the fiscal year 2017 to over $5 billion in fiscal 2021, while increasing operating profits from $250 million to nearly $1.3 billion over the same period, according to Bird Global.

Overheard

“Unfortunately the probability of a ‘soft landing’ — that is, reducing inflation without much damage to growth — has become uncomfortably low.”

—Mohamed El-Erian, president of Queens’ College at Cambridge University and chief economic advisor at Allianz, says the likelihood of the U.S. economy avoiding a recession is falling fast, as reported by Fortune

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