The “hub and spoke” model is not a new concept, it has been used for many years in the real estate sector. Put simply, a business has its headquarters, which will serve as the hub of the business, along with offices geographically distributed around that headquarters, based on the talents and needs of customers. The hub is usually located in the city center, with excellent access to public transport, and functions as the company’s cultural center.
What are the advantages of this model?
This model is often implemented by companies that follow a model in which the head office remains the focal point between regional offices. This pattern is most often observed in regulated sectors such as healthcare, finance, pharmaceuticals and automotive manufacturers in order to maintain coordinated activity. It’s very different from some companies that follow a decentralized model where an open culture is adopted; the technology sector is one example.
While in principle the model looks attractive to companies recruiting nationally, there are many factors to consider in this approach. This may be the length of journeys, the availability of public transport around the offices on the outskirts and the supply of local equipment. The company should seek to provide high quality offices for the head office, with relaxation areas or areas for large team meetings. “Satellite” offices must be able to accommodate a single team or a single company, whether it is a reception area or a collaboration space. As the office role has traditionally been a space for collaboration, it is important to keep it.
What does this mean for employees?
You might think that this model means less time spent face to face with management and therefore satellite offices might struggle to maintain culture, brand integration and community spirit, but the positives are clear. First, the layout of these offices at different locations gives employees a significant level of flexibility to not only work closer to home, but also to reduce commute times, which promotes overall work-life balance. and privacy and often results in happier employees. Not to mention the environmental benefits of not having to travel that far. This model is also an effective way to stimulate local economies, create local jobs and
How do flexible offices come into play?
Despite all the advantages, there can be the hurdle of real estate leases, which is often a reason for companies not to implement this model. More recently, the solution to this problem has been the flexible office which allows employers to test the model before making a longer term commitment. This allows for a more relaxed approach, where the company can first gauge employee interest and even try out different locations in the region while determining which office size is best for the team. Since many flexible office providers offer monthly subscriptions, this formula is certainly more sustainable. The flexible option is often cheaper in the short term as well, freeing up capital to invest in other sectors of the economy.
What is the next step for the “hub and satellite offices” model?
So we’ve established the elements that clearly motivate a business to explore this strategy, but how sustainable is it as part of an overall real estate strategy? While most companies have some sort of hub-and-spoke model in place, the question is, is this model more widespread now? Instead of having a head office and regional centers in the cities, some companies have offices around the head office or cities so that people do not have to travel to the city center. With the recent effects of Covid-19, this is something we can expect to see more and more.
In the long term, we can expect to see many more companies implementing the “hub and satellite offices” model. More employees expect more flexibility, which will be needed to attract and retain top talent, demonstrate sustainability sensitivity and ultimately , to be considered a market leader.