27 July 2020
Businesses are now finally able to return to some sense of normality in our post-COVID society. There has been plenty of news about companies like Twitter, Google and Facebook extending their work-from-home policies “forever” (or until 2021). But the reality is that a lot of businesses would not be able to function working remotely permanently. The other, more hard-hitting reality is that employees who err on the side of caution are reluctant to return to their offices in the first place, as this involves public transport and avoidable long commutes to busy cities.
Amidst embracing the “new normal” and looking for ways to innovate, the idea of satellite offices in regional hotspots for employees has increased in popularity. The meaning of satellite offices refers to the connectivity of businesses operating from multiple regional offices while potentially keeping their headquarters (HQ) in a city centre. In turn, businesses are able to reduce their city centre HQ costs as employees are locally-based throughout the country (or globally) in a decentralised work model.
This guide covers the definition of satellite offices and how they differ from other workspace models like hub and spoke offices, regional offices and office campuses. We will also cover the satellite office concept and its function in a post-pandemic world.
The meaning: satellite offices are branches of a company that is physically separate from the businesses’ main office. While decentralised and physically apart, they are known for their interconnectivity. Satellite office capacities can range anywhere from holding one to hundreds of employees. They can also be geographically dispersed throughout one country or globally, depending on the business requirements.
Satellite offices are a relatively new phenomenon and have increased in popularity during the coronavirus pandemic as businesses look for ways to get their employees safely back in an office.
There are many different terms used interchangeably to describe satellite offices and its similar models. However, they do have notable differences that we will cover below.
You might have heard of a decentralised office called one of the below terms:
‘Hub and spoke’ offices are flexible workspaces where a business allows employees to work from either their city hub or a dedicated, strategic ‘spoke’ location of one or several regional workspaces.
Satellite offices act as the ‘spokes’ in the hub and spoke model, while a smaller HQ in a city centre or key region for the business is the ‘hub’. The hubs are then typically used for fundamental business activities such as pitches, wider meetings and networking mixers. The term ‘hub and spoke’ originates from the airport industry, where flights swap over at a central ‘hub’ airport between the departure and arrival location, to reduce the amount of half-empty flights.
Similar to satellite offices, regional offices can be thought of as the ‘spokes’ in the hub and spoke office model. However, there are some key differences between regional and satellite offices to point out here:
The term ‘office campus’ is unlikely to be used in the UK, but you might hear people talking about it if you take a trip over the Atlantic. In America, an office campus is a collection of company buildings within a particular region, similar to a university campus. These buildings can form either the ‘hub’ or the ‘spoke’ of the hub and spoke model, meaning that an office campus could be an organisation’s main HQ or one of its smaller satellite offices in a strategic location. Google’s main office complex in California, the Googleplex, is an example of an office campus that acts as a headquarters.
Whilst the satellite office concept is becoming increasingly popular now, the phrase has been used in America to describe smaller offices that are geographically separated from their main HQ since the late ‘80s. In 1989, the Los Angeles Times printed a story on NBC News decentralising its network to create ‘what NBC described as a “satellite” office in Houston’ (with the use of quotation marks highlighting just how recent and unfamiliar the concept was at the time).
Since then, satellite offices have sprung up in major cities around the world, including in the UK. The satellite office concept has come a long way too - evolving from a tactic designed to achieve coverage in an area into a more strategic move, with benefits for a company’s recruitment and partnering strategies (more on this below). When businesses build satellite office networks now, it’s often connected with top-level objectives such as tapping into an important market.
The COVID-19 pandemic has also played a part in the evolution of the satellite office concept, with chief executives at FTSE 100 firms like Barclays and WPP looking to decentralise their offices and facilitate more flexible working. The last world event to bring about a change in the way we think about office networks was the global financial crisis of 2007-2008, which saw many businesses move towards satellite offices and smaller coworking spaces to make cost-savings.
New functions and benefits of satellite offices have emerged as the concept has matured. We’ll explore each of these in detail over the course of this section.
Introducing workspaces in regions away from the main hub increases the reach of a business whilst maintaining the benefits of its existing HQ: having employees on the ground in an area helps to create connections between the company and local customer bases. A satellite office also provides an ideal meeting point for clients and employees within a particular location.
Satellite offices can serve as a base camp for expanding operations within a region. Whether you’re looking to draw on specific talent pools within an area or develop strategic business partnerships, positioning one of your locations there will help your business to integrate into the local network. For example, it’s common to see London-based firms establish regional offices in cities such as Manchester, Leeds, or Birmingham as part of a domestic expansion strategy.
You can also generate cost-savings by adopting the hub and spoke model and choosing out-of-town offices near to cities of strategic importance for your business. Not only will this ensure that rent on your ‘spoke’ offices is kept down, but it will also give you the option of downsizing or repositioning your city ‘hub’ to reduce overheads as employees are dispersed throughout your satellite or regional offices.
The final yet arguably most important function of satellite offices is to provide employee benefits including more flexible working and shorter commute times. If your staff travel long distances into your city centre-based HQ each day, you’ll save them time and money by dispersing your office premises throughout the UK, making it easier to recruit and retain the top talent. There are also health benefits to opening out-of-town regional offices such as reduced exposure to air pollution (we explore this in our post on the environment and employee health in a post-pandemic context).
To learn more about how you could benefit from satellite offices, take a look at our blog on how the hub and spoke model can help larger businesses.
If you’re interested in the logistics of converting to a regional workspace model but aren't sure where to start, get in touch or drop us your questions on Twitter.
Office headquarters in a prime city-centre location used to be a badge of honour for many businesses. But it’s time to embrace the new world that the coronavirus pandemic and lockdown has catalysed. The reality is that many businesses will be paying extortionate overheads for a central office location in a busy city that is barely half-full because their employees do not want to commute on public transport.
Elitism in a city centre address is a thing of the past. In the wake of the pandemic, businesses are now being assessed on their agility and ability to pivot in an ever-changing climate. If cash flow has been difficult since the pandemic and your biggest overhead is a city centre office that your employees do not feel comfortable travelling to, then it might be time to start looking at opening regional satellite offices.