Two-thirds of Canadian employers say flexible work central to cost management strategy
Flexible work options are no longer just about employee convenience—employers now see them as central to business success, according to a recent report from the International Workplace Group (IWG).
Despite concerns over unpredictable economic conditions and trade-related pressures, 69 per cent of businesses operating in a hybrid model are confident their businesses will grow, the report finds. Additionally, 56 per cent of flexible businesses expect their workforce to expand in 2025.
This confidence is backed by clear productivity and talent gains: three-quarters of businesses using hybrid models report increased productivity, and 68 per cent say these policies have strengthened their ability to attract and retain top talent. Moreover, 70 per cent say hybrid working has helped mitigate economic pressures.
“Hybrid working isn’t just about flexibility — it’s a smarter business strategy,” says Terri Pozniak, Executive Vice-President and Country Manager, Canada at IWG. “Not only does the model retain top talent and boost productivity, it also significantly reduces overhead tied to maintaining large, city-centre offices. Taken together, these advantages are giving Canadian business leaders greater confidence in their ability to navigate potential economic headwinds in the year ahead.”
Canadian businesses are increasingly pessimistic as the ongoing trade war initiated by U.S. President Donald Trump continues to impact the economy, according to a previous Bank of Canada report. And more than 3 in 4 Canadian companies are now preparing for a recession, according to a separate report from KPMG.
What are the top cost-cutting measures by businesses?
Over 7 in 10 (72 per cent) businesses are implementing or planning to implement cost-cutting measures this year, according to IWG’s survey of more than 400 Canadian senior business leaders, conducted May 6 to 8, 2025.
Hybrid working is playing a pivotal role: 65 per cent of respondents say it has been central to their cost management strategy.
“Hybrid working has enabled businesses to cut overhead costs by reducing reliance on inflexible and expensive long-term real estate leases in favour of flexible and short-term workspace solutions,” says IWG.
Other common cost-saving strategies include sourcing from cheaper suppliers (26 per cent) and delaying (22 per cent) or reducing new hires (20 per cent).
Hybrid work key to retention: survey
Sixty-five per cent of flexible companies also agree that abandoning hybrid working would cause them to lose their top talent to competitors.
“In times of economic volatility, CEOs are carefully evaluating how to navigate uncertainty while driving efficiency and growth for their business. They recognise that flexibility is not only crucial when it comes to safeguarding their operations, but also enhancing the productivity of their teams,” says Mark Dixon, CEO and Founder of IWG.
“By empowering their teams to work closer to home in local workspaces and offices, companies operating in the hybrid model are able to significantly reduce their costs and improve the work-life balance of their people.”
A previous Capterra report found that some workers even want their employers to cover the cost of returning to the workplace.
To manage a hybrid workforce effectively, companies need robust strategies. Sofie Maervoet, VP for global concepts staffing at Randstad, suggests that they do the following:
- Providing clear hybrid working guidelines and policies and dosting informational sessions and leadership training.
- Focusing on inclusivity.
- Conducting unbiased performance monitoring
“Taking proactive measures to prepare your team leaders for the shift to a hybrid workplace can go a long way in ensuring a seamless transition for the workforce at large,” she says.
