The Office Experience Strategy You Need

What is the history behind the Hub & Spoke Model?

The airport industry pioneered this model in the '80s to fly toward higher profits. It works because airline carriers operate most of their fleet from one central airport, i.e., JetBlue at New York's John F. Kennedy Airport and United Airlines at Chicago's O'Hare. The model makes it possible for an airline to service a variety of routes and visit hundreds of cities around the globe each day. Still, their base of operations and the bulk of their physical assets live at a single location. The hub creates a foundation that helps streamline the business and create profitable efficiencies.

Spokes are smaller destinations. Instead of sending underbooked flights from and to 'spoke' areas, flights are routed to a central 'hub' destination between the two airports to maximize efficiency. Travelers can still get to where they need to go, but the airline can minimize waste across the board: 

• Employees of these airlines can easily transfer from flight to flight for more efficient shifts
• Less gas waste from sending undersold flights across the country and back 
• Maintenance teams and materials can be more centralized for quicker turnarounds

Therefore, airlines are more profitable without sacrificing the number of destinations travelers can reach. Isn't that what we all want? To give the customer what they want in a way that makes everyone more money? Sign us up! 

How can you apply the Hub & Spoke Model to your company?

Imagine your company is a bicycle wheel. The center of the wheel is your headquarters or HQ, which everything revolves around. You need a strong hub to gain traction on the road and move quickly. Without that, you simply have a bunch of parts that go nowhere. Sprouting out from HQ are your spokes, each playing a role in how your business covers more ground as you speed toward your goals. The stronger your spokes, the faster you can go, but one weak link…well, now you've got a flat tire.

Hub: 
The hub is the nucleus of a company's assets and culture, setting the stage for employees to realize company values and goals each day.

• The core of your operations and team
• Houses the majority of physical assets 
• Center of company culture

Spoke:
The spokes are anywhere an employee can be productive. Traditionally, those were more formal work settings, but with the emergence of hybrid, that is now anywhere someone can work. 

• Regional offices and warehouses
• Client sites and field sites 
• Flexible and remote working areas: Home offices, coffee shops, co-work spaces, etc.  

"Any company that has a flexible work policy to work-from-home regularly has a hub-and-spoke model," says Bryan Robinson, author of Chained to the Desk in a Hybrid World, in a recent article for Forbes. "By definition, the hub is "the effective center of an activity, region or network. This is a far more exciting and dynamic way to describe the office of the future—we no longer go to the office to work but instead are learning how to leverage it as a hub for engagement and activity."

Now, for those benefits.

Slash Rent Costs

A wise person once said, "The rent is too damn high," and we know they're alone in that thought. According to Build Remote, 77% of Fortune 100 companies are hybrid, making it crucial for companies to maximize their real estate footprint.

The evolution of the Hub and Spoke Model allows workplaces to centralize core operations in a single location while providing regional coverage without as much risk, especially in a hybrid environment. The concentration of your operations cuts unnecessary spending on office space and focuses on creating the best possible setup and culture at your core worksite. 

A recent Gallup report states that a strong culture can yield an 85% increase in net provides over five years. Flexible working options are part of the culture equation, but companies must also create hub spaces that create casual moments for employees to connect and collaborate. No company wants to invest millions in an office that sits vacant. Yet, for employees, the commute must be socially and financially worth it.

Top workplaces are taking cues from the hospitality industry to create highly amenitized offices for their hybrid workforce. During the pandemic, employees flocked to local coffee shops as a "third space" to fuel community, creativity and productivity. The issue with this is that it's not sustainable, with the average latte costing $4 or more.  Investing in a smaller but better office experience meets employee demand while offsetting some of those costs. In 2023, office pantry solutions remained the top return-to-office drivers, with the average office location spending $13,956/mo. on food and beverage programs. 

While centralizing primary operations in the hub, companies can establish strategic satellite offices in lower-cost markets, taking advantage of more affordable rent and lower living costs. As shown in the following benefits, these investments tap into the talent in the area while providing targeted regional coverage for retention and growth for a lower cost. The hub still provides the foundation of employee connectivity and operations, but the spokes funnel insights on the ground for better visibility without a high-risk real estate investment.

Hire From A Much (Much) Larger Talent Pool

The spoke locations in a Hub and Spoke Model allow you to tap into regional talent pools concentrated in specific areas, such as the Bay Area techies or the LA PR pros. Tapping into these talent opportunities can expand your reach and give you access to a broader range of candidates with unique expertise.

The model can also be adapted to leverage remote work opportunities. You can attract talent from anywhere in the world by establishing a central hub while allowing employees to work remotely from the spoke locations. Removing geographical barriers enables you to hire from a vast global talent pool, regardless of their proximity to the central hub. 

But, as you know, hiring isn't just about you. Today's job candidates want to know that you can cater to their preferences and needs. Some individuals may prefer working in the central hub, while others may prefer working from spoke locations or remotely. By offering different options, you can accommodate all preferences and create a more inclusive and flexible work environment.

Finally, the Hub and Spoke Model fosters a collaborative spirit, with team members turning their attention to the ideas and opportunities at the hub location, whether they work there or not. This encourages cross-pollination of ideas, expertise and best practices. By enabling a collaborative office experience, you can continue to attract top talent who value learning opportunities and the chance to work with a global network of colleagues.

Expand Your Global Presence

The Hub and Spoke Model provides a flexible structure to scale your company up or down as needed. Most businesses aim to make an impact beyond their core markets, whether in the next city or halfway across the world. Spokes can accelerate geographic expansion or open up new markets. Similarly, if certain spokes become less viable, they can be consolidated or closed without disrupting the entire system.

By situating it in a major international city or a region with strong market potential, you can create a strong foothold for expanding your global presence. Think of construction companies establishing a hub in Chicago or a telecommunications company entering the scene in Dallas. The location of your hub can impact your ability to connect and work with local vendors and partners as well as service key clients. 

Once you've established your presence, the model makes it easier to access more markets efficiently. The central hub becomes a connectivity hub, enabling easier communication, coordination and logistics between the hub and spoke locations. This accessibility to different markets can facilitate the distribution of goods or services and customer support, allowing you to solidify your global presence.

Increase Employee Productivity

The Hub and Spoke Model allows you to rethink dividing labor across your offices. The hub can focus on core functions such as HR, marketing and strategic planning. Meanwhile, design the spokes to serve specific and smaller operations such as sales, customer service or IT.  By bringing together necessary resources, expertise and infrastructure in dedicated locations, employees can access what they need more quickly and easily and create closer bonds with their immediate teams. 

"The Hub and Spoke Model can boost collaboration and knowledge sharing among employees in different locations," says Crafty CEO Nathan Rosenstock. "This flexibility can boost productivity by allowing employees to work in environments where they feel most comfortable. Strategic placement of the office can also reduce commuting time and enables employees to manage their work-life balance better, increasing job satisfaction, employee engagement and productivity." 

The hub makes logistics and product management more efficient if you work with physical goods. The hub can act as a consolidation point for items, allowing for optimized routing, reduced transportation costs and improved delivery times. Strategically locate spokes to ensure better coverage and accessibility to customers or suppliers.

Conclusion

The Hub and Spoke Model offers various benefits, including operational efficiency, improved logistics, scalability, risk mitigation, specialization and competitive advantage. As workplaces evolve, hubs are becoming more amentized to fostering collaboration and fueling employee culture. On the flip side, spokes are becoming more flexible as employees find new destinations for peak productivity. 

This isn't the Hub & Spoke Model of airlines past; this is a modern organizational strategy to maximize your real estate footprint and coverage while staying profitable now and in the future. Learn more about the future of the workplace in Crafty's trends report, "The Future of the Workplace: Usher in a New Era of Hybrid Hospitality."