How the 15-Minute City can Revolutionize the Future of Work

Over the course of the past three years, Canada’s world of work has undergone a stunning about-face. Before 2020, only 22% of companies offered hybrid work as an option to their employees, according to a recent study by IWG. Following the COVID-19 pandemic, that number skyrocketed to 72%. 

While flexible work had been gaining momentum long before the pandemic, the pandemic forced people en masse into the world’s largest experiment in remote and hybrid working. And to the surprise of some — it worked. Workers no longer needed to commute long distances to get to the office and companies had more engaged and productive teams at lower costs. 

“The shift to hybrid working has led to two parallel changes: the changing role of the city centre and the rise of more localized, less commute-based living.”

As a result of these changes, only a fraction of traditional office space is needed. The shift to hybrid working has become a win-win for businesses and their employees, leading to two parallel changes: the changing role of the city centre and the rise of more localized, less commute-based living. 

Office Vacancy Rates Soar

The rise of hybrid working is having a material impact on the commercial real estate market, sending vacancy rates to record highs. According to the latest from CBRE, 17.7% of office spaces in Canada were empty in the first quarter of 2023 — an all-time high. By the end of 2024, Colliers expects Canada’s national office vacancy rate to remain near historic highs at approximately 15%.

Companies need less space, and as a result, they are terminating their long-term commercial office leases at an unprecedented rate — a phenomenon we refer to at IWG as the Great Lease Resignation. Traditional leases are being replaced with shorter-term, more flexible agreements. This is because hybrid work offers flexibility — it is not about working either from home or in a corporate office, it is about having an approach that flexes around the individual needs of workers. 

“Two in three (66%) employed Canadians wanted their employer to offer a workspace within 15 minutes of their home.”

The importance of having a “third space” that brings workers together to collaborate, converse, and network cannot be overstated. Indeed, only one in five employed Canadians wants to work exclusively from home, according to IWG research. But that third space needs to be close to home. A 2021 study by IWG found that two in three (66%) employed Canadians wanted their employer to offer a workspace within 15 minutes of their home. 

Welcome to the 15-Minute City

Long championed by urban planners, the 15-Minute City (‘La ville du quart d’heure’) is a concept developed by French academic Carlos Moreno in which all of our basic needs — home, work, education, entertainment, groceries, healthcare, etc. — are met within a 15-minute walk or bike ride. The concept is modelled after European cities and encourages a slower pace of life, an active lifestyle, and community engagement. It also gives back a considerable amount of our most precious commodity: time. The pandemic sparked a desire for this sort of local lifestyle among Canadians, with more people spending time in their neighbourhoods, avoiding long commutes, working, and playing closer to home. 

“Local flexible workplaces are key to turning the 15-Minute City into a reality.”

Local flexible workplaces are key to turning the 15-Minute City into a reality. The rapid uptake of the “hub and spoke” model — a centralized HQ (usually urban) surrounded by localized workspaces (usually suburban) — will be a defining feature in how companies manage their costs and support their teams moving forward.

IWG is looking to double its network in Canada over the next three years to 250 locations — with a focus on suburban locations. In 2023 alone, IWG is opening new flexspaces in the suburban centres of Cambridge, Ontario; Richmond, British Columbia; Sherbrooke, Quebec; and Truro, Nova Scotia.  While IWG has been opening flexible workspaces in suburban areas for years, demand rose by 32% in the first quarter of 2021, as compared to before the pandemic. 

The 15-Minute City: A Win for People, Profits, and the Planet

With a range of benefits for employees, material impact on the bottom line, and undisputable advantages for the planet, the 15-Minute City is a rare example of “triple bottom line” sustainability: a win for people, profits, and the planet.  

“HR leaders view hybrid work as an essential tool when it comes to recruitment and retention.”

A Win For People

The benefits of hybrid working for employees are many and HR professionals have taken notice. IWG polled 250 Canadian HR leaders in February 2023 and they said they have seen a boost in employee satisfaction (67%), work-life balance (63%) and mental health (50%). The findings also show that HR leaders view hybrid work as an essential tool when it comes to recruitment and retention — 91% use hybrid working to recruit new talent, with 81% saying it is “very to extremely effective.”

A Boost For Profits

Research has also shown that the adoption of hybrid work can significantly impact a business’ bottom line. Companies are now saving on overhead costs such as rent, utilities, and support staff — adding up to an average annual savings of CDN $13,000 per employee, according to Global Workplace Analytics. For a major bank with 89,000 employees, that means savings of $1.1 billion; for a marketing agency of 50 staff, it saves $650,000. And the financial impact only gets bigger the more you dig.

“The growth in hybrid work outside of major cities could contribute more than $13.7 billion annually to local Canadian economies in the next decade.”

A 2019 study by Regus forecasted that the growth in hybrid work outside of major cities could contribute more than $13.7 billion annually to local Canadian economies in the next decade. By 2030, the boom in hybrid work — which JLL predicts will represent 30% of the market by then — is expected to contribute a whopping $369 billion USD to the Canadian economy and $10.04 trillion to the global economy. 

A Break For The Planet

Flexible work is also a powerful tool in the fight for the planet. At the beginning of the pandemic, global CO2 emissions were estimated to have fallen by as much as a quarter. The latest United Nations climate change report, “Climate Change 2022: Impacts, Adaptation and Vulnerability“, warns that resistance to change is one of the biggest barriers to tackling climate change, with hybrid working being heralded as a key way to address six of the UN’s Sustainable Development Goals.

“Hybrid work has been heralded as a key way to address six of the UN’s Sustainable Development Goals.”

A major driver of the 15-Minute City concept is the urge to cut down on carbon emissions. As municipal leaders and city planners contemplate the future of cities, the idea of the sustainable, health-conscious 15-Minute City is gaining support worldwide. 

The 15-Minute City is Here to Stay

The 15-Minute City is taking hold in many parts of Europe and the United States. Major cities such as Milan, Edinburgh, Cardiff, and Madrid are all working on implementing the model. Meanwhile, in Portland, Oregon, the “20-minute neighbourhood” has been used as a planning concept since 2010, with Detroit, Michigan following suit shortly thereafter.

The concept of waking up early in the morning to commute a long distance to work is a thing of the past. The 15-Minute City is no longer merely an interesting concept to consider – it is a once-in-a-generation opportunity to meet the changing needs of employees, build vibrant local communities, and prioritize the sustainability of our planet.