How the Hub & Spoke Model Could Evolve into the Office of the Future
August 27, 2020 7 Minute Read
If the past three months have made anything clear, it’s that workers want more flexibility from their workplace.
Whether it’s long commutes, strict dress codes or distance from family, COVID-19-mandated remote work has left many office workers with the same conclusion – the way we work needs to change.
That realization, along with announcements from some of the world’s largest tech companies that they plan to create permanent remote workforces, has led to a flood of headlines about the “death of the office.”
But the reality isn’t so simple.
While workers appreciate aspects of remote work, the majority still want to work in an office at least some of the time. As the pandemic drags on, the lack of in-person collaboration is starting to wear on workers, whose days are filled with back-to-back Zoom calls.
All of this means that conversations about more widely distributed workforces, that were well underway before COVID-19, have accelerated.
Many companies have been in the process of transforming their office portfolios for years. They want to create physical workplaces that act as a silent partner to the company’s brand and culture. These spaces are intended to drive employee connectivity and innovation and are essential to attracting talent.
This physical workplace is also meant to work hand-in-hand with the rise of remote work and flexible workspaces. The “hub-and-spoke model,” where companies rely on a central “hub” headquarters for important meetings and events, and a network of smaller regional offices or “spokes” closer to where employees live, was gaining traction well before COVID-19.
Now, it could be time to re-envision the model for a post-pandemic world, pairing employee preference for remote work with flexible physical workplaces that allow them to connect with their colleagues.
The Original Hub & Spoke
“The truth is, big companies have been doing hub-and-spoke for a while now,” says David Cairns, CBRE Senior Vice President, Office Leasing.
Cairns says many enterprise companies have downtown headquarters where they host clients and events, in addition to smaller regional offices closer to where their employees live.
With tight office markets in major city centres, the hub-and-spoke model was also cost effective – companies could distribute their employees in less expensive markets, rather than paying a premium for large swathes of pricey downtown space.
Cairns believes that our current notion of hub-and-spoke will have to evolve with shifting employee and employer needs after COVID-19.
“When we talk about hub-and-spoke in a world during and after COVID-19, I’d call that version 2.0,” he says.
“I think it’s fair to say, when you look at the employee surveys that are coming out, people want more choice,” he adds. “They want to be closer to their families, avoid commutes, and work in a less disruptive environment. All of that means the office as we currently think about it will have to change.”
Evolving Worker Wants
Those surveys are painting a clear picture of shifting worker preferences.
In a recent poll of more than 2,600 U.S. office workers by San Francisco architecture firm Gensler, only 12.0% said they wanted to work remotely full-time, while 70.0% wanted to return to the office for three days a week or more. A similar survey from flexible space company iQ Offices found that 93.0% of users didn’t want to work from home full-time.
But even though employees value working in the office, they’re increasingly unwilling to give up the benefits of working from home.
In a survey of 1,000 U.S. office workers conducted by the Harris Poll and sponsored by Hana, CBRE’s flexible space solutions platform, 62.0% appreciated the money they saved working remotely, 58.0% appreciated not having a dress code and 55.0% liked not having to commute.
Those numbers rose starkly for suburban workers, with 70.0% preferring the lack of commute and money saved by working from home.
Perhaps most tellingly, before COVID-19, only 37.0% of employees reported wanting flexible work benefits. Now, that number has risen to 56.0%.
“People are asking themselves, why do I go into the office every day? Why do I structure my time this way?” says Cairns. “You can’t throw away the shared human experience of going into the office, and people don’t want to work remotely all of the time. But more flexibility is needed.”
In a world of “hub-and-spoke 2.0,” the physical office becomes a critical component of a hybrid workplace, acting as the central nervous system for a more widely distributed network of employees.
Employees can spend days that require more head-down work at home, adding to their sense of work-life balance and removing unnecessary distractions.
Still, a network that is simply a single central office and employees own homes won’t necessarily be enough.
“To me, flexible space providers will be the partner in a new vision of the hub-and-spoke model,” says Cairns.
He isn’t alone in this thinking.
In May, IWG PLC, the U.K.-based company behind flexible space brands Regus and Spaces, announced plans to raise a $390 million stock offering, in order to increase its already sizeable office space footprint.
“The office is not going away. It is changing,” IWG CEO Mark Dixon said in a recent interview with Fortune Magazine. “The workplace [will become a] hybrid. People can work from home, and people have been doing that. They will work from offices near where they live, and then they go to the headquarters to do important stuff: meet, collaborate, new ideas, business review, the stuff you need to do face-to-face.”
Those “offices near where they live” could very well be flexible space offerings, either from big players like IWG or smaller boutique offerings.
“I can see a future where we have street front level, neighbourhood-centric flexible space, bookable by the minute,” says Cairns. “This is space where people can have meetings, collaborate, and just get out of the house and into an office environment. It’s for people like me who don’t want to go all the way down to a downtown office most of the time.”
He adds that local spaces will give employees opportunities to meet customers and clients where they are, which can be difficult in a centralized downtown office.
“Right now, companies haven’t been able to lease space in a way that best fits their needs,” says Cairns. “So in the coming months and years, we’re going to see these flexible space offerings catch up with what companies actually want.”
Stephanie Garant considers real estate to be a critical component of economic growth and social development. After several years in marketing and sales, she joined CBRE Montreal’s capital markets team in 2018.
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