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UK: AI is forcing companies to opt for the benefits of flexible and decentralised workspace models, according to new research from International Workplace Group (IWG).
The study of CEOs and CFOs found that 60 per cent believe the rise of AI has made it harder to predict their organisation’s office space requirements over the next two years. With rapidly advancing technology transforming productivity, workforce planning and business velocity, leaders are moving away from fixed, long-term real estate commitments and towards capital-light workspace strategies that can scale with changing demand.
Nearly nine in 10 (88 per cent) say that the rise of AI means organisations need flexibility when it comes to their workspace or real estate solutions as rapid technological change makes it difficult to anticipate future space needs.
When asked how technology, including AI, is influencing decisions about where office space is located, 42 per cent said it enables remote working and reduces the need for a central office, 39 per cent said it encourages decentralised or flexible office models, and 37 per cent said it expands access to global and distributed talent.
This shift is already underway – 99.8 per cent of CEOs and CFOs said their organisation is actively 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.
Recognising the benefits of having the ability to flex their office space rather than be locked into lengthy, expensive contracts, the majority (57 per cent) are actively investing in hybrid workspace arrangements. Just over half are looking at setting up a network of locations closer to where employees live (55 per cent), while 52 per cent are considering decentralised workspace models.
Cost is also now a near-universal factor in location strategy for the C-Suite, with 99 per cent saying cost reduction is a driver in decisions about where to locate office space, and more than a quarter (27 per cent) saying it is their major driver.
More than three quarters of CEOs (76 per cent) say the role of the office will become more important for their organisation over the next two years, with just 0.8 per cent saying 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 one fixed location for years at a time, says IWG.
Christian Schmitz, CEO of International Workplace Group, said: “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.”
Mark Dixon, executive chairman of International Workplace Group, added: “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.”
Highlights:
- AI is forcing companies to opt for the benefits of flexible and decentralised workspace models, according to new research from International Workplace Group (IWG).
- The study of CEOs and CFOs found that 60 per cent believe the rise of AI has made it harder to predict their organisation’s office space requirements over the next two years.
- With rapidly advancing technology transforming productivity, workforce planning and business velocity, leaders are moving away from fixed, long-term real estate commitments and towards capital-light workspace strategies that can scale with changing demand
