KUALA LUMPUR: Hybrid work arrangement has evolved from a trend into a core business strategy, reshaping workplaces, fostering flexibility and empowering teams to operate in new ways.
Accelerated by the Covid-19 pandemic and strengthened by advances in digital collaboration tools, flexible work models now give businesses a competitive edge – helping them tap into wider talent pools, boost productivity and optimise costs while meeting the expectations of today’s workforce.
In Malaysia, the rollout of flexible work arrangement guidelines marks a pivotal step in embedding hybrid models into long-term workplace strategies.
International Workplace Group (IWG) Malaysia country head Vijayakumar Tangarasan said this shift is driving demand for decentralised hubs – co-working spaces, satellite offices and mixed-use developments – in high-growth regions such as the East Coast Economic Region and the Johor-Singapore Special Economic Zone.
“These emerging hubs, supported by public policy and infrastructure upgrades, will diversify economic activity beyond traditional business centres, creating fresh opportunities for companies to expand and thrive in a more flexible, distributed economy,” he told SunBiz.
Vijayakumar emphasised that SMEs – the backbone of Malaysia’s economy – are increasingly leveraging flexible workspaces to scale without long-term leases or heavy upfront costs.
“The growing need for a network of accessible locations, rather than a single fixed office, is especially critical for SMEs expanding into new markets within Malaysia, across Asia-Pacific or globally,” he said.
Switzerland-headquartered IWG’s network of 51 centres in Malaysia continues to grow, with new sites in Penang, Kota Kinabalu, Kuching, Malacca, and Johor. Its latest addition, Regus Troika Kota Bharu – the first on Malaysia’s East Coast – offers professional, tech-enabled spaces that meet SMEs’ priorities of growth, cost efficiency and flexibility.
“This momentum is part of our broader global growth strategy. In the first half of 2024 alone, IWG added 899 new locations, strengthening our position as the world’s largest provider of flexible workspace solutions with over 4,000 locations across 120 countries,” he said.
For Malaysian SMEs with regional or international ambitions, this provides an immediate platform to operate seamlessly across borders while maintaining quality, connectivity and brand presence.
Vijayakumar said robust digital infrastructure remains critical to this transformation.
“High-speed connectivity, secure cloud platforms and hybrid collaboration tools are now essential for competitiveness. In fact, 95% of global CEOs in our recent survey reported increased investment in cloud, AI and automation to reinforce hybrid working models.”
He added that continued public-private collaboration on infrastructure and digital capabilities will be key to levelling the playing field for entrepreneurs beyond the Klang Valley.
As Malaysia’s secondary markets, such as Kelantan, Sabah and Sarawak, expand through economic decentralisation and growing talent pools, access to professional, high-quality workspaces will be vital.
“Businesses in these regions need the right infrastructure to operate and grow, and our goal is to ensure they can access it quickly and efficiently,” said Vijayakumar.
IWG is meeting this demand through a capital-light model, partnering with local property owners under management agreements to deliver fully equipped workspaces for SMEs and larger corporates.
“This approach allows us to scale rapidly without heavy upfront investment while enabling local landlords to tap into the rising demand for hybrid workspaces and secure long-term value from their properties,” he explained.
Globally, the flexible workspace sector is valued at over US$2 trillion (RM8.4 trillion) and is projected to grow more than 600% by 2030, representing 30% of all office space. By collaborating with state governments and property owners, IWG aims to accelerate infrastructure and digital readiness, enabling businesses in regional markets to leverage hybrid work for productivity and growth.
“We’re not just creating workspaces; we’re extending the benefits of hybrid working to more communities across Malaysia,” said Vijayakumar. “This is how we help companies unlock their potential while contributing to balanced, nationwide economic development.”
Looking ahead, Vijayakumar expects hybrid work demand in Malaysia to continue rising.
“Hybrid working is no longer just a trend – it’s becoming a core business strategy,” he said.
With more organisations embedding it into long-term plans, high-quality flexible workspaces will be increasingly sought after, especially in decentralised areas closer to where people live.
Research by IWG and Arup shows that in the United Kingdom and the United States, the number of office workers in commuter towns away from city centres could rise by up to 175% and 60% respectively, boosting local gross domestic product by as much as 3% and 6%.
“While Malaysia’s numbers will differ, the impact could be similar – more people working locally means more spending in communities, more regional business activity and less pressure on our urban centres,” he said.
Stanford University research indicates that around 40% of workers globally will continue hybrid working permanently, making it the default expectation for talent.
“We see companies in Malaysia moving away from single-location offices towards distributed networks that combine central hubs, local flexible workspaces and home-based arrangements,” Vijayakumar said.
“By enabling employees to work closer to home in professional environments, businesses can extend their reach, operate more sustainably, and directly support Malaysia’s vision of a decentralised digital economy and balanced nationwide growth,” he added.