Companies don’t want to waste money on office space when everyone’s working from home—but they do want to make space available when workers need to come in. Enter the hub-and-spoke model.
Many offices remain closed, and employees have settled in for an extended and indefinite stint of working from home. And though some companies are only just realizing how much of their work can be done remotely, many workers are eager to get back in the office, at least some of the time. A recent survey by the JLL company Big Red Rooster found that 94% of employees want the option to return to a physical office, and that remote work should augment but not replace the traditional office.
So companies are facing the quandary of how not to waste money on office space when people are working from home most of the time, but also how office space can be available when workers want or need to come in. Enter the hub-and-spoke model.
“Many corporate occupiers are saying let’s have a downtown hub, and suburban west, east and north spokes, so that people can have their office close to their home if and when they want to go to the office,” says Sheila Botting, president for the Americas at the commercial real estate company Avison Young. A smaller central office may still stay in the downtown core, but it will be augmented by several smaller offices or a coworking space near where their employees live. Instead of leasing a big office building, or a whole floor, companies may start renting out smaller chunks of real estate that are spread across a broader geography.
Botting, who’s based in Toronto, says she’s seen companies such as Deloitte, KPMG, and the Bank of Montreal exploring their own hub-and-spoke approach. They’re not alone.
“What I’m hearing about hub and spoke is bigger companies offering drive-to destinations for office opportunities for people to gather without having to get on mass transit,” says Byron Carlock, real estate leader at PricewaterhouseCoopers. “We were already beginning to see an uptick in suburban leasing, mostly for cost reasons, but now we’re also seeing it for access reasons.”
That’s led to more companies thinking about where their workers want and need to be, according to Adam Segal, cofounder of Cove, which uses software to help companies such as Booz Allen manage their office space by scheduling the use of facilities such as conference rooms and shared desks. He says companies are increasingly looking for ways to reduce their unused office space while maintaining a physical presence when they need it.
One of the companies Cove works with is Search for Common Ground, a global nonprofit focused on global conflict, with a main hub office in Washington, D.C. By analyzing office use, Segal and Cove helped the company shift to a hub-and-spoke model years ago that drastically cut the number of desks needed. “We reduced their space by about 75%,” Segal says.
More of the companies Cove works with have started using this technology to reduce the size of their main office, Segal says. They’re using the scheduling technology to coordinate who needs to come in when. “We are working with them in tandem to say are there certain days when certain teams come together. So a hub day for marketing as an example, that’s on Wednesday, and that’s your dedicated time for marketing,” he says. If others want or need to come in, they can simply reserve one of the remaining seats in the hub, or book a time at a coworking spoke facility. By analyzing employee addresses, Segal says companies can locate coworking hubs in areas that are more convenient to where their workers live.
Cove is also working with MotoRefi, an auto loan refinancer, which is transitioning to a hub-and-spoke system. A main office will remain in Washington, D.C., where about 50 people will work, and new spokes are set to open in Denver and Austin early next year. “Our real estate footprint needs are changing and expanding very rapidly,” says MotoRefi CEO Kevin Bennett, in a statement. “We were just discussing remote and I think we’ll be flexible where needed, but won’t be having a lot of remote-first options, generally speaking. We won’t require five days per week, but we like for as many people as possible to be able to get to the office.”
Whether its employers or employees who want to make sure the office experience is part of the job, spokes in other locations can make it easier and cheaper for companies to provide office space. Compact spaces for fewer workers are less expensive than leasing a large space in a downtown—something Segal says few companies are likely to want to do at this point. “For a company to sign a lease right now, that’s a tough decision to make because there’s so much uncertainty,” he says. “Every company we’re talking to, and this is not anecdotal, we’re getting to 30, 40, 50 companies that are saying we want to reduce our size, what does that look like, and how can we be smart about the office.”
Being smart about the office, Segal says, may mean shrinking it down to a core hub and using spokes when and where they’re needed.