Posted by Tasnim Ahmed
June 7, 2021 | 4-minute read (658 words)
COVID-19 has disrupted many aspects of people’s lives and permanently changed the way modern life is conducted. From changing the way people act in public to the way they consume essentials, their way of living and how they socialize, the pandemic has reshaped nearly every aspect of ways of life we once took for granted.
Not far behind is the way people work. With many offices shutting down during the pandemic, employers had to come up with new ways of keeping the business afloat, yet still engage employees and simultaneously comply with all the new guidelines put in place by authorities.
Countless firms opted to require their employees work from home as a stop-gap measure while the pandemic raged in the outside world. While working from home had always existed before on the fringe, few companies wholeheartedly subscribed to this model in the past.
Remote work was once mostly seen as a temporary measure, but as work from home was implemented across industries, it became clear that many companies can succeed with a remote workforce.
And it quickly became evident that many people would prefer to work from home, or at least near home. Not surprisingly, an accompanying trend has emerged in which real estate and the workplace intersect as offices migrate away from city centers to suburbs.
The hub-and-spoke organization
Eyeing new recommendations from the Centers for Disease Control and Prevention on workplace openings, many companies are searching for options away from cities and instead in suburbs, a model that is dubbed the hub and spoke. The central office acts as the hub, and the spoke are smaller offices spread out across geographies, manned by remote staff in offices that serve as satellite workspaces.
The benefits of the hub-and-spoke business setup are manifold. While the main office still functions as the hub with an onsite staff, it needs fewer people which in turns means fewer resources are used and translates to lower overhead costs. Meanwhile, the satellite offices act like traditional offices where people can come in and work if a need for such arises or when a more structured environment is required.
Many companies are now planning a hybrid approach in which they tell some employees to work from home or from any of the satellite offices to reduce their commute, lower their carbon footprint and boost productivity.
Less commute time, potential cost savings
As many employees observe, it is not that working out of an office is difficult, it is the commute that is the ongoing challenge. The hub and spoke system reduces this commute time for many workers and eases the effect of steep real estate prices for offices located in city centers as less space is needed.
Some in the real estate business now subscribe to the notion that real estate is going the route of retail five years ago as it began to decentralize. About 9 out of 10 of the largest office markets in the U.S. recorded an increase in the vacancy rate during the first quarter, according to real estate services firm CBRE, as businesses look for suburban locations and shorter lease periods.
The lead of big tech companies
Twitter is among a number of companies to communicate that its employees may never return to the old model of working out of a central office and that it will permanently shift to remote work. Google and Facebook have previously announced plans to have staff work remotely until year’s end. Businesses’ land grab in city centers is not necessarily the norm anymore.
Rather, open suburban places where social distancing can be followed appears to be the new norm for at least some companies. In the end, it works out well for many members of the workforce. Additionally, participating companies also do their part for environmental, social, corporate and governance initiatives by virtue of a lesser carbon footprint and diminished resource consumption.