Companies that offer less flexibility in where and how employees work face greater risk of losing or missing out on talent than those with hybrid working policies, new research finds.

About two thirds ( 67% ) of job recruiters said they have seen an increase in candidates looking for new jobs from companies mandating five days a week in a central office, while three quarters ( 75% ) have had candidates turn down new roles that do not offer hybrid working, according to a recent study by International Workplace Group ( IWG ). The London-listed company is a provider of flexible workspace with brands such as Regus, Spaces, Signature, HQ and OpenOffice.

The study, which covered more than 500 in-house and agency recruiters, also shows that 55% of employees would feel more empowered if their employer allowed them to work from a location that works best for them.

“Flexibility is no longer a nice to have for employees. Many will not consider new roles that require long daily commutes, they want access to workspaces closer to where they live in an environment that allows them to remain motivated and productive,” says IWG founder and chief executive officer Mark Dixon.

Common bugbear: daily commute

Separate research by IWG among white collar workers currently in jobs that require them to be in a city centre office five days a week shows the challenges their employers face. Almost half ( 46% ) said they are actively looking for a new job that doesn’t require a long daily commute while almost two thirds ( 63% ) said their employer is risking losing its best talent.

The significant cost ( 44% ) and time ( 40% ) of commuting are the most common bugbears for not wanting to travel daily to crowded and distant city centre offices, followed by lack of work/life balance ( 33% ), according to the IWG study. One in five ( 21% ) employees working in a central office five days a week said they experience burnout on a daily basis with long commutes undoubtedly playing a big part in this.

Flexible workspaces closer to where employees live are proving to be an attractive option to many. Three quarters ( 77% ) said a place to work closer to home is a must-have for their next job move, while workers are four times more likely to choose an office close to home, than in a city centre.

Just a quarter ( 25% ) said they needed to be in a central location five days a week to do their job effectively, while 55% said they would feel empowered in their role if their employers allowed them to work from a variety of locations.

Workers are also frustrated with what they perceive as a lack of trust from their employers. Only 20% of Hong Kong employees are happy to be in the office for the full five working days, with 40% of employees even willing to skip a pay raise if it meant they got their desired flexibility.

Improved productivity

Recent research conducted by IWG among more than 500 business leaders also finds that three quarters ( 75% ) of CEOs who have moved to the hybrid model reported improved productivity in their organizations.

Another collaborated research by IWG and Development Economics reveals that more than three-quarters of employees ( 76% ) save on travel costs due to hybrid working. This shows that removing the long arduous daily journeys can allow employees to put their energy back into the company through their involvement, interaction, and essentially, investment.

A study by Stanford University professor Nicholas Bloom finds that companies mandating five-day office attendance could face a 35% increase in employee quitting rates. He predicts that some organizations enforcing rigid policies, such as Amazon, may reverse these mandates by mid-2025 due to rising attrition.

Hong Kong companies may face similar challenges in retaining employees due to the mandate, IWG says. Despite 80% of Hong Kong employees expressing a strong preference for continuing in a hybrid or remote work model, over 91% of corporates in Hong Kong are still urging staff to increase their in-office presence, which indicates a disconnect between employer and employee expectations.

“Flexible working offers benefits to businesses far beyond employee retention. The hybrid model is proven to boost workforce productivity and job satisfaction while also cutting costs significantly,” IWG’s Dixon stresses. “It’s no surprise that more and more businesses continue to embrace hybrid working for the long term while giving their employees what they really want – the ability to say goodbye to the long daily commute.”