The Office Experience Strategy You Need [2023]
How the Hub and Spoke Model Can Help You Win the Office Wars
If you've spent more than five minutes on social media lately, you know that the debate between remote and in-office work rages on. From property owners to working parents, there are strong feelings on all sides about how location preferences impact employee engagement and productivity, culture, and the local economy. But maybe the keyboard warriors are overthinking things. There is a way to meet everyone in the middle. Cue the hub and spoke business model.
Inspired by the aviation industry and a close relative of the hybrid workplace model, hub and spoke has quickly gained popularity. The model revolves around one central office hub and smaller spokes—or satellite offices. Unlike the traditional headquarters model, which relied on a business operating from a single, larger city center office, 'hub and spoke' offices let employees work from their local hub or a dedicated, strategic spoke location. Spokes often include more regional worksites and can be traditional offices, coffee shops, coworking spaces, or even private homes.
"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."
But the hub and spoke isn’t just one of those fleeting future of work trends. Below we explore the trend and 4 key benefits.
A Brief History of the Hub and Spoke Model
The term hub and spoke originally derives from the airport industry, where it was pioneered in the ‘80s. Airline carriers operate most of their fleet out of 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, but their base of operations and the bulk of their physical assets live at a single location. The hub creates a foundation that helps the rest of the business move toward profitability.
Spokes are smaller destinations. Instead of sending underbooked flights from and to ‘spoke’, flights route to a central ‘hub’ destination between the two airports to maximize efficiency. The hub airport then becomes the connecting location.
Now, for those benefits.
Slash Rent Costs
A wise man once said, "The rent is too damn high," post-pandemic, that feels truer than ever as fewer employees opt to come into the office, and inflation makes commercial real estate more costly. The hub and spoke model allows you to centralize core operations in a single location. This concentration of operations helps to cut unnecessary spending on office space and focus on creating the best possible setup at your core worksite. You may even be able to negotiate more favorable lease terms due to the economies of scale associated with a larger space.
While the primary operations are centralized in the hub, support functions or smaller satellite offices can be established in spoke locations. Because a ‘spoke' office can be any place in which employees are productive, you can also think more strategically about where you set up shop. Spoke locations are often chosen for their lower costs, including cheaper rent. The economics allows you to tap into regional cost disparities, taking advantage of more affordable rent and lower costs of living in those areas while still benefiting from the connectivity and centralized operations provided by the hub.
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 that might be concentrated in specific areas like the techies in the Bay Area or the PR pros in LA. This expands your reach and gives you access to a broader range of candidates with unique expertise.
The model can also be adapted to leverage remote work opportunities. By establishing a central hub while allowing employees to work remotely from the spoke locations, you can attract talent from anywhere in the world. This removes geographical barriers and 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.
“For companies thinking about their office footprint, the hub and spoke model unlocks the best of both worlds,” says Nate Rosenstock, CEO, Crafty. “By decentralizing the traditional HQ, companies expand their hireable talent market, while simultaneously enabling their ability to engage those distributed employee base with in-person experiences. They can hire talent from across the country without sacrificing their ability to build an in-office culture.”
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 fostering 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 that can be scaled 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 how you divide labor across your offices. The hub can focus on core functions such as HR, marketing, and strategic planning. Meanwhile, the spokes can be designed 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 is a productivity engine, fueled by flexibility,” shares Rosenstock. “By offering employees the benefits of the small ‘spoke’ environment and select at-home working days, we're not just accommodating their preferences, we're actively enhancing their capacity to produce quality work. The 'spokes' provide the peace and focus often required for deep work and strategic thinking, whereas the 'hub' is better equipped to foster collaborative ways of working.”
Hub and spoke can also boost collaboration and knowledge sharing among employees in different locations,” adds Rosenstock. “By creating specialized teams or departments at designated offices, you can streamline workflows, increase efficiency, and improve productivity by leveraging each team's unique skills and knowledge. This flexibility can boost productivity by allowing employees to work in environments where they feel most comfortable and productive. 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 model also 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. The spokes can be strategically located to ensure better coverage and accessibility to customers or suppliers.
Conclusion
Overall, the hub and spoke business model offers various benefits, including operational efficiency, improved logistics, scalability, risk mitigation, specialization, and competitive advantage. However, it is essential to note that the model's effectiveness depends on factors such as the nature of the business, industry dynamics, and specific market conditions.
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