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After COVID, a hub-and-spoke office style could become the norm



Perhaps the most constant reminder of the ongoing effects of COVID-19 is our daily work routine. For most of us who are either banned or unwilling to return to the office, every day is an effort to work productively in our home environment while ignoring the inevitable distractions of the house. Technology has helped us adapt to our new reality, and many surveys have shown that employees believe they are just as productive, if not more, working from home, and actually prefer the WFH model.

Your employers may not agree. Anecdotes and quantitative studies show that such a model ultimately has to evolve, although many large companies have currently embraced the WFH change (see: Twitter, Google, Facebook, Salesforce, Microsoft). Even the most ambitious remote working advocates recognize that in-person interaction with coworkers is healthy for morale and corporate culture, and enables a higher level of collaborative innovation not possible with Zoom or Teams. According to technology leaders, this is a major catalyst for growth.

In the ultra-transient knowledge workforce, concerned bosses fear that an employee with too much unsupervised freedom poses a greater risk to competitor poaching. Talent acquisition in the tech world is an expensive and competitive game.

Besides, we are all mostly social beings. Justin Bedecarre, who advises tech companies on office strategy, notes, “Working from home is not for everyone. Lots of people miss each other and the energy to have everyone together. “

Reed Hastings, founder of Netflix, was even more straightforward, describing sustainable work from home as “purely negative,”

; although he recognized that a one-day-a-week WFH schedule might strike the right balance.

Back to an office, maybe not THE office

One thing is clear: the days of a monolithic HQ-centered model are numbered for economic reasons. Even under financial pressure, executives at C-level see the property position in their operating budget and see a cost-saving silver lining in the pandemic cloud. A recent survey by KPMG shows that nearly 70% of CEOs of large companies plan to reduce their office space. This is especially true in expensive tech hubs like the Bay Area, Seattle, and New York, where the office of one employee can cost up to $ 15,000 or more per year (and with new distancing protocols in the office the cost per square foot for each employee increases also). A New York City Partnership survey of CEOs of NYC-based companies found that 25% intend to reduce their footprint in the city by 20% or more, while 16% plan to move out of the city entirely.

Biting the bullet now and stepping out of long-term leases has become part of this trend. Pinterest recently turned down plans to expand its San Francisco office by $ 9 million.

The pandemic has compounded what many tech companies already knew: a dispersed workforce can effectively find and retain talent. Businesses are now seeing the opportunity to take even greater advantage of this and give workers more freedom of choice in where to do their work. Downsizing space in urban centers while looking for secondary cities with lower rents and lower wage standards is now becoming even more attractive. This makes economic sense for management, shareholders and employees alike – it lowers operating costs and makes employees happier.

A hybrid hub-and-spoke model is redefining the workforce

Most experts agree that a hybrid WFH / office model will be the new norm for companies that keep moving. And this will change the real estate footprint for many. We saw Amazon announce that it is investing $ 1.4 billion in remote workspaces in places like Denver and Detroit. Facebook has stated that it is happy to have its employees work from anywhere, but plans to open satellite offices where they can cluster and check in on a regular basis. This is a significant change for a company that has paid new hires with a $ 15,000 bonus if they agree to live within 10 years of miles from HQ. It is believed that up to 50% of employees could be away from headquarters in a few years. Other companies are following this example with a strategy to break away from the old command and control structure.

Brain Armstrong, CEO of Coinbase, paints the picture in his blog post, which many emulate: “… the vision is to have one floor of office space in 10 cities instead of 10 floors of office space in one city.”

Such a hub-and-spoke model is even more of a solid strategy in the current environment, and cities and regions across the country are rolling out the welcome mat to attract businesses and workers alike. The modern workspace, offered in flexible configurations and terms of use, is available in a variety of citations.

If you build it will they come?

Long before we knew what a coronavirus was, people were looking for more geographic options for starting and running tech companies. AOL founder Steve Case started a venture fund called Rise of the Rest a few years ago that was looking for ways to look for opportunities in inter-coast transit cities.

Looking at the aftermath of the COVID-19 situation, Case noted that the pandemic will only accelerate that thought: “… The COVID-19 pandemic will encourage people – entrepreneurs, investors and employees – to explore opportunities outside of the technology centers Coast to consider. People who have been considering moving to take advantage of the industry expertise that exists in many parts of the country, or to change their lifestyle or to be around family and friends, may choose this moment to move, a talent boomerang to accelerate and help emerging startup cities rise. “

Tech companies should see the wisdom in how they build for the future. The pandemic provides an opportunity to rethink our dealings with modern workforce and the benefits of geographic diversity.

Ernest Andrade is the founder and director of the Charleston Digital Corridor and also founded Andrade Economics. Both companies focus on positioning communities for sustainable economic prosperity. He has played a key role in the city of Charleston for nearly 20 years, shaping the city’s comprehensive approach to developing its high-income, low-impact, and diversified economy.


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