91% of CFOs believe there is a recession on the horizon
97% are cutting costs by more than 10% per annum as fears for the economy heighten
Over 80% of CFOs expect hybrid working to be a cost saver
Among global Fortune 500 CEOs, 74% say they plan to reduce office space
Mumbai, September 30, 2022: New data reveals that an overwhelming majority of CFOs are cost-cutting amid rising inflation and recession concerns. Senior financial executives are expecting the economy to enter recession in the next 12 months and have begun cutting costs in preparation, according to new research1 from IWG, the world’s largest flexible workspace operator. The study, conducted among 250 CFOs, found that 91% believe an economic crisis is inevitable, with more than a third (36%) of these predicting a recession this year. As a result, nearly all (97%) have started implementing, or plan to implement cost-cutting measures. Facility spends is a key target for businesses, with two thirds (65%) of CFOs targeting a reduction of more than 10% per year.
Hybrid working is being viewed as key to achieving saving targets, with 82% CFOs saying it’s a more affordable business model as demand for office space remains high. Companies have long used office space inefficiently, but the proliferation of hybrid and remote work has them re-evaluating these expenses. In fact, among Fortune 500 CEOs, 74% said they plan to reduce office space.
IWG Founder and CEO Mark Dixon commented: “Hybrid working helps businesses stay competitive and resilient especially in times of economic uncertainty. With the fears of a global recession increase, research shows that CFOs and business leaders are adopting hybrid working for many reasons. Not only does it support employee work-life balance and wellbeing, it also provides a meaningful boost to a company’s bottom line.”.
Harsh Lambah, Country Manager India, Vice President Sales, South Asia said, “IWG is witnessing a significant growth in momentum by companies across sectors, who are embracing hybrid working for the long term. We are witnessing strong demand for our workspaces as companies adopt a combination of work from near home and from their HQ. At present, our network spans 16 cities and 91 locations, and our focus remains on rapidly growing our footprint in tier 2 and 3 cities of India to meet the demand for hybrid working”.
IWG is seeing strong growth in the Indian market with on-demand membership rising 51% Y-o-Y. CFOs surveyed confirm this trend, with half (50%) of them saying they have already opted for short term leases or shared workspaces, giving them flexibility to quickly scale up or down depending on budgets, without being locked into lengthy contracts.
Personnel cuts are also being relied on to reduce staffing costs in light of economic pressures, with more than two fifths (44%) of CFOs introducing forced redundancies and others looking at reviewing current staff salary bands (28%) and reducing the number of promotions (27%). CFOs are also limiting the onboarding of new staff members, with more than a third (36%) reducing new hires and a similar number delaying new hires (33%).
The demand for IWG workspaces located outside of city centres has increased up to 36%. IWG is planning to meet this demand by adding 1,000 new spaces in the next year, the majority of which are set to open in rural and suburban locations.