Hub and Spoke Model Looks to Confront Changing Workplace Dynamics

SAN FRANCISCO—The Hub and Spoke office model has been thrust back into the limelight in response to COVID-19. It is a simple concept yet infrequently executed on a global scale: a primary hub office is used to house key functions, teams, meetings and events with spokes leading to convenient local offices where employees can check in and work, according to a report by Cushman & Wakefield.

In the Bay Area, this model has an especially successful history. In 2007, Google opened its first San Francisco office to tap regional talent beyond its Mountain View headquarters. Many Silicon Valley employers have since followed this trend, taking up residence in San Francisco, allowing workers the added flexibility of walking, biking or using mass transit for a shorter commute within the urban core. And today, the popular tech bus is still a mainstay across the region (pre COVID-19, of course), transporting valuable talent across the Bay to Silicon Valley, often at far distances. This latitude of working beyond the traditional hub office can be a pleasant alternative to the vast amount of time that disappears each day into the Bay Area commute.

The war for talent is still on, and Bay Area employers are regularly working to develop competitive benefits and engaging workplaces to attract qualified candidates, the report indicates. While COVID-19 accelerated the process, tech employers were already at the forefront in supporting a distributed workforce culture, aided in part to advances in technology that allow for greater mobility and continued competition for sourcing the best talent regardless of geographic constraints.

Elisa Konik, managing director who leads the Cushman & Wakefield emerging tech advisory group for the Americas, says for the past decade tech employers have been asking how and where do firms recruit the best talent to meet goals? How can firms retain employees in a sector that is no stranger to churn and build a culture that promotes collaboration, excellence and loyalty?

“Tech employers play an incredible role shaping our future, not just through the lens of digital transformation and innovation, but in how our economies and communities will evolve over time,” Konik tells GlobeSt.com. “Unsurprisingly, some of the most prominent Silicon Valley tech employers were among the first to beta test this concept as talent demands have grown and regional talent has grown more dispersed. We believe that in certain urban metros, a Hub and Spoke model is one tactic that can truly act as a strategic differentiator. While distributed working is here to stay, many employers still see incredible long-term value in bringing colleagues together in person. Employers that can strike a careful balance, appreciating the evolving needs of their workforce and meeting the moment, will find themselves as the top employers of choice.”

Prior to COVID-19, local commuters (64% who travel alone in personal vehicles) spent an average of 32 minutes getting to work. Even more disheartening are those 100,000 super commuters (mainly from Contra Costa and Alameda counties) that spent more than 90 minutes getting to the office, often across an array of methods.

Public transit riders face other own challenges, with overall usage drastically falling as of late and likely to continue through 2021, given lingering concerns about social distancing and safety of such platforms.

With the pandemic stubbornly maintaining its grasp on the global economy, the Hub and Spoke model provides a potential solution for employers balancing challenges around public transit, while also seeking to provide a collaborative workplace for employees to meet and a mechanism for attracting talent across a broader geographic region.

San Francisco and San Jose boast the largest number of tech-employed residents in the Bay Area, so it is no surprise that the commercial office sector has flourished there. That said, over time, regional migration into and throughout the region has grown, along with traffic congestion. Today, cities such as Oakland, Fremont and Hayward have the largest number of tech commuters who leave cities of residence to go to work each day, with 40% of Oakland tech workers and 24% of Fremont tech workers traveling outside of city boundaries for employment. These trends illustrate an opportunity for a successful spoke closer to home, especially where the population density of such cities has the ability to support moderate scale, and thus sustain local corporate culture and collaboration, says the report.

Furthermore, a lower cost of living outside established urban hubs will continue to attract inbound migration, notably so in the East Bay where average apartment rents have fallen to slightly more than $2,200 per month as opposed to nearly $3,100 per month in San Francisco. Affordability, quality of life and housing inventory will have a significant impact on how regional demographics shift during the next five to 10 years. The geographic footprint of workplaces has an opportunity to strategically evolve alongside such change, Cushman & Wakefield points out.

When considering Hub and Spoke scenarios, the question remains as to what truly happens post-COVID? What solutions were effective for triage but lost allure three years down the line? At what point does the scale of a spoke harm the cultural capital residing within the hub?

Experimentation may be key, which is fortuitous as many tech employers are known for being both nimble and innovative. An ongoing dialogue with employees will be essential in the years to follow, the report points out.

In the end, a Hub and Spoke model is just one short-term tactic being explored by global tech employers seeking to adapt with new and innovative ways to confront changing workplace dynamics. The future is never certain, but as long as quality talent remains in high demand for the tech sector, employers will seek new opportunities for differentiation and team support, says Cushman & Wakefield.