As macroeconomic uncertainty continues to challenge business leaders worldwide, a growing number of organizations are embracing hybrid work—not just as a pandemic-era solution but as a long-term strategy for resilience, growth and talent retention.

A recent global survey by the International Workplace Group revealed that 90% of CEOs and CFOs are concerned about macroeconomic instability. In response, 86% are actively taking steps to protect their businesses financially, with hybrid working emerging as a key enabler.

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“In times of economic volatility, CEOs are carefully evaluating how to navigate uncertainty while driving efficiency and growth for their business,” said Mark Dixon, founder and CEO of the group. “They recognize that flexibility is not only crucial when it comes to safeguarding their operations but also enhancing the productivity of their teams.”

While cost reduction is a significant driver, with 83% of CEOs and CFOs citing hybrid working as instrumental in their cost-saving efforts, its benefits extend far beyond that. “By empowering their teams to work closer to home in local workspaces and offices, organizations operating in the hybrid model are able to significantly reduce their costs and improve the work-life balance of their people,” he said.

Hybrid work’s true value: Helping orgs stay financially resilient

This includes a reported 77% reduction in overheads such as office space and utilities, freeing up capital for growth initiatives or as a buffer against market fluctuations.

See also: Disengaged employees’ high cost: Why culture matters more than ever

However, the strategic value of hybrid work truly shines in its contribution to long-term business resilience. Organizations are embracing capital-light models, shifting away from rigid, long-term leases toward flexible arrangements that allow them to scale operations up or down as needed. This agility is critical for navigating unpredictable market conditions.

Hybrid work also unlocks new avenues for growth and expansion. By leveraging the group’s global network of 4,000 locations across 120 countries, organizations can enter new markets with speed and lower risk, staying closer to both customers and talent. This strategic decentralization enables greater responsiveness to shifting demand.

The survey also highlighted a measurable boost in productivity, with 83% of business leaders reporting this benefit. “When people are free to work in ways that are most convenient for them,” Dixon said, “they are more engaged, more likely to stay and better equipped to deliver strong performance.”

This increased autonomy and control over their work environment translates into a more engaged and productive workforce, a crucial element for sustained growth, he said.

Hybrid work and talent for small and medium enterprises

In Singapore, small and medium-sized enterprises are among the fastest adopters of hybrid working, with 70% of employers already assessing flexible work arrangement requests. This reflects a recognition of the importance of flexibility in creating resilient and productive work environments.

Beyond cost, hybrid work is a powerful tool for attracting and retaining talent in Singapore’s tight labor market. With 79% of local organizations reporting difficulties in filling roles, embracing flexibility provides a competitive edge. The International Workplace Group survey revealed that CEOs cite improved employee productivity (37%), better employee wellbeing (23%) and stronger long-term retention (15%) as tangible benefits. Another group survey of HR professionals found that 95% believe hybrid models are effective for recruitment, with 80% reporting an improvement in employee satisfaction.

Read more: Hybrid work: A multi-billion dollar productivity catalyst for businesses

However, Dixon said, hybrid models must be implemented with care to realize the benefits. “Physical space is only one part of the equation; equally important are the policies and practices that support flexible work.”

National guidance from the government also is important, he said. In Singapore, a formal structure guides employees through requests for flexible work and helps employers respond fairly and consistently, according to Dixon. Other organizations provide resources and advice to help employers adopt flexible work practices that align with company goals and employee needs.

The future of work: A human-centric evolution

Looking ahead, Dixon identified two pivotal trends that will shape the next phases of hybrid work: the increasing presence of Gen Z in the workforce and a heightened focus on employee happiness and wellbeing.

Gen Z, poised to account for over a quarter of the global workforce in 2025, views flexibility as a fundamental expectation, not a mere perk. “Our research found that 88% of Gen Z employees prefer hybrid working over daily commuting, and 75% believe that having control over how and where they work is essential to achieving work-life balance,” Dixon said. “Organizations that do not meet the expectations of this ‘Generation Hybrid’—who value flexibility, diversity and authenticity—risk losing out on the next wave of top talent.”

Simultaneously, employee happiness and wellbeing are becoming strategic business imperatives. “Our recent study of HR leaders showed a near-universal consensus that hybrid work contributes to happier, more loyal employees,” he said.

Hybrid work can help employee wellbeing, which in turn helps business outcomes

Hybrid models reduce commute fatigue, allowing for more time for rest, self-care and family, which in turn lowers stress, improves mental health and promotes a better work-life balance. These then foster higher job satisfaction, stronger retention and deeper engagement, ultimately driving improved business outcomes.

In this evolving landscape, HR leaders are stepping into a more strategic and influential role. Their mandate extends beyond policy implementation to actively shaping how hybrid work arrangements are integrated across the organization. This involves aligning business objectives with the needs of a flexible and distributed workforce, developing frameworks that support both performance and wellbeing, and ensuring consistency and fairness across diverse teams.

HR will also collaborate closely with IT, legal and management teams to adapt workplace systems, processes, and culture. “Ultimately, HR leaders will be instrumental in laying the foundation for a more flexible and sustainable way of working,” Dixon said, “one that meets evolving workforce expectations while supporting the long-term success of the organization.”