Much has been made about what work will look like once the COVID-19 pandemic is finally over. Though many companies have recognized the benefits of remote work this last year—and say that as a result, a complete return to the office is unlikely—workplace models will continue to evolve and normalize in the coming months and years. For many tech companies, the future increasingly appears to point to hybrid hub-and-spoke workplaces.
Just 5% of companies across sectors say full office-based operations will resume after the pandemic is over. But although the need to work from home during the pandemic has demonstrated many of the key benefits of remote work—increased productivity and better ability for workers to perform tasks that require deep concentration, to name just a couple—WFH still has some challenges.
For example, some tasks, such as coaching and brainstorming, may be more effective when they can be safely done in person; other jobs, such as hardware manufacturing, can’t be performed remotely at all. According to one recent report by McKinsey, sectors such as technical services and IT and telecommunications hit their capacity to work effectively at around 60 or 70% remote work, based on time spent. This means tech companies must still lean on their physical workplaces to a not-insignificant degree.
What is the hybrid hub-and-spoke workplace model?
Instead of approaching remote work as all or nothing, many organizations are pursuing hybrid models that involve both working from home (or other locations away from the office) and coming into the office at a decreased frequency.
But without further modifications, merely shifting work from office to home some of the time may not be as efficient, or deliver all the advantages, remote work can potentially offer.
Consider the cost of maintaining large company headquarters and campuses. As one example, Silicon Valley’s Mountain View—home to Google’s 12-plus-acre headquarters—has the most expensive commercial real estate market in the U.S., with the cost per square foot of office space averaging $1,554. If employees work from home half the time, companies based in hot areas will sink a lot of money into underutilized real estate investments.
Enter the hybrid hub and spoke model. Instead of centering work (and requiring employees to live) around a single location, hub and spoke companies create a network of regional or even international offices and other facilities, with employees located within working distance of larger hubs and smaller spokes. Amazon is one well-known example of companies employing this model, announcing in August 2020 that it would invest $1.4-billion into six new hubs in cities such as Dallas, Detroit, and San Diego.
Benefits of hybrid hub-and-spoke workplaces
If 2020 showed us anything, it’s that where work gets done doesn’t matter as much as we once thought it did. Employees working from home during COVID proved that they were able to maintain productivity, collaboration, and many aspects of job performance. But moving forward, improving work for both employers and employees may be a more nuanced proposition than simply deciding yes or no to keeping offices open.
Indeed, moving beyond the single headquarters model and developing hybrid hub-and-spoke networks may offer some powerful advantages.
Though the cost of real estate in Mountain View and other parts of Silicon Valley is steep, the same commercial real estate survey found that across the U.S., the average square foot of office space is just $233. This vast difference illustrates the potential for significant cost savings as the result of shrinking and shifting a company’s physical footprint. Last year, Pinterest paid a reported $89.5 million to terminate the lease on a future office site in San Francisco, highlighting the long-term benefits of shifting out of expensive business centers.
And there are other potential cost savings to be had. Companies like Facebook, Twitter, and Stripe are among those with plans to reduce the pay of employees who relocate away from head offices, a move to reflect the lower cost of living in other regions. Housing prices and the cost of goods and services can all vary across regions and countries, meaning that employees who live and work near alternative hubs may be able to maintain their lifestyles at (and be willing to accept) lower salaries, furthering corporate cost savings.
Expanded talent pool
When a company has only one physical location, its ability to attract talent may be limited by geography. That’s because although employees like working from home, they do want to come into the office sometimes. PwC’s Remote Work Survey, for example, found that 44% of workers want to work remotely two or three days a week. But they also wish to experience the camaraderie, connection, and other benefits of physically working with their colleagues on a regular basis. This is difficult to do when key members of the team live too far away to commute in.
Creating hybrid hub-and-spoke networks, however, expands the geographic pool of candidates. With hub offices in place, companies can recruit from wider regions and markets, bringing on the best person for the job without worrying about office access or relocation.
Better work-life balance for employees
The hybrid hub-and-spoke models can be a boon for employees because it allows them to work where they do their best work and live where they want to live. From reduced commute times to an ability to tap into family childcare and support, the result is often better work-life balance for employees, and reduced burnout.
A key challenge for hybrid hub-and-spoke companies to overcome
Of course, hybrid hub-and-spoke workplaces have some inherent challenges too—specifically, creating operational and cultural cohesion between all locations so that the whole corporate network can function holistically. But left to their own, it is possible for risky silos and gaps to develop and widen between locations.
As such, a key challenge for companies employing this model will be to put in place tools and processes that effectively bridge the gaps between hubs and spokes.
At a foundational level, this means deploying solutions and business apps that can be utilized universally in order to streamline communication and flow of information, and other processes and functionalities. The harder it is for different branches to connect and work together, the less likely they are to do so. But with a single communications solution underpinning all locations, it’s as easy to work together with a colleague in a far-off hub as one in the same physical region.
Finding the right communications platform to support this model is critical. Firstly, it must be available, highly scalable, and readily deployable at all hub-and-spoke locations. Regional natural vulnerabilities, such as annual hurricane season, must also be considered to ensure that distributed offices have a way to stay connected with the company network should a disaster occur.
Connecting the workplace of the future
The COVID-19 pandemic has been the catalyst for a close examination of work. For tech companies, the resulting re-envisioning will likely result in more spread-out models than tech has seen traditionally.
But as businesses evaluate their workplaces, it’s important to think not only about where work will take place, but how to ensure high levels of communication, collaboration, and cooperation, wherever offices are located.
Originally published Feb 25, 2021, updated Dec 30, 2022