Satellite offices and hubs

Leon Gettler

There has been some coverage over the last two years about COVID-19 leading to the demise of offices. But in reality the office is coming back, albeit in different forms.

Some banks are looking at a hybrid model where employees spend only a few days at head office and the rest of the week working from home. Others are rethinking their real estate and setting up satellite offices which can be created by focusing on where the employees are living, or their skills, saving them the commute and the bank real estate.

In an interview with the Financial Times, the chief executive officer of Citi’s Institutional Clients Group which generates two-thirds of Citi’s profits, Paco Ybarra said that while there was “definitely still a need for the office”, Citi would consider having some staff work from retail branches and satellite offices rather than its main offices in London and New York.

He also predicted more flexible arrangements which might see staff working two days from the office and three days remotely. “It will be trial and error,” Ybarra said. “This is like an experiment that no one signed up for but we all go through.”

Barclays is also planning a decentralised office. CEO Jes Staley has told Reuters the bank will adopt a hybrid working model and will reduce its real estate footprint but maintain its main offices in London and New York.

Staley told The Guardian that the bank would look at a more de-centralised approach to staff working. This, he said, would include local branches becoming satellite offices for more employees.

“I think the notion of putting 7000 people in a building may be a thing of the past, and we will find ways to operate with more distancing over a much longer period of time,” he said.

“You’re going to find we use much more significantly our branches as alternative sites for investment bankers and call centre workers and people in the corporate bank.”
Staley said there were practical issues to consider in planning these offices. It needed to figure out how many people would be allowed in an office on any given day. For example, physical distancing measures may mean only two people can use a lift at any one time.
HSBC has adopted a new hybrid working model, with a 10% reduction in its global real estate footprint since the start of 2020. HSBC is reducing its office space in Sydney by 30% before the end of 2022.

Certainly the growth of satellite offices helps employees as well as business. By spreading the real estate footprint wider, the bank’s employees can continue to live in affordable locations while saving their company rent money. It also gives the business the space to grow a presence in the local community and, potentially, rationalise real estate.

Certainly the satellite office is now a real option for Australian businesses.
Hassell, an international design practice, has surveyed 1600 Australian office workers and interviewed a number of business leaders and workplace experts in the country. 
Hassell found businesses were using certain office models in post-COVID environment including the hub and spoke where employees work from smaller satellite offices in the suburbs and neighbourhoods closer to where they live, saving them the commute to a central office while still providing the benefits of face-to-face interaction with colleagues. 

Other models included the clubhouse or the hybrid model where employees visit the office when they need to collaborate and return home to do their focused work, turning the office into a social hub where people go to meet, socialise, and work together. 

There’s the fully virtual office where employees work from home, or anywhere else they like, allowing companies to ditch expensive leases and build on what they started during the pandemic. Another one is activity-based working where employees come into the office but don’t have an assigned desk. Instead, they spend their day moving between a variety of meeting rooms, phone booths, hot desks, and lounges. This allows the company to cut down on the number of desks. Before the pandemic, it was eight desks for every 10 people. Now it’s to five for 10, with many employees being out of the office, working from home a couple of days per week.

National Australia Bank last year adopted what it said was a hybrid working model for its new Sydney $2 billion office comprised of two connected spaces: the heritage listed Shell House building and the Carrington Street tower; with the main entrance on Carrington Street and 395 Bourke Street in Melbourne CBD. These are designed to provide employees with modern facilities designed for the future of collaborative working.

Commonwealth Bank of Australia recently held a “Navigating the new landscape’” webinar where industry experts discussed how the shift to remote working would force building redesign. This would also have a positive impact on company expenditure and carbon footprints.

Jennifer Saiz, Executive General Manager, Group Property and Security at CommBank says the Commonwealth Bank of Australia is examining how to set up satellite offices as part of its examination of all options which also include using co-working facilities, to cater for employees who post COVID can’t work effectively at home.

She said the primary workplace of the future “looks like a collaborative work environment that’s dynamic and vibrant, that represents the purpose and the values of the organisation.”

“You walk in and you get a sense of the energy: things are happening here, it’s a place where you want to be,” Saiz said.

The collaborative workplace of the future will be designed with a focus on amenities to attract employees. These would include on-site cafes, retreat spaces, health hubs, shower and bike facilities and comfortable collaboration spaces with designated quiet areas for phone calls. 
Commonwealth Bank is citing its newest property in South Eveleigh near Redfern Station in Sydney, with its higher percentage of social spaces to workstation spaces compared to the traditional office.

NAB has ruled out satellite offices.

“The adoption of NAB satellite offices is not an option being carefully considered at this time,” an NAB spokesman said. “NAB currently leases commercial office space in Melbourne, Sydney, Brisbane, Adelaide and Perth”.

ANZ says it is still committed to its head office but is carefully exploring options.
“ANZ believes connecting to colleagues in person and in the office environment plays an essential role in sustaining our culture. It creates unique opportunities for people to problem solve, collaborate, learn, and build deep relationships.” an ANZ spokesman said.

“We are focused on helping our people find the right rhythm to their working week as they transition from predominantly working remotely, to a blended model where they work some of the week in the office and some remotely.”

Westpac refused to comment.

The satellite office model sounds logical. However, that would involve dividing a workforce not by project or job function but by geographic location. Returning to the office with people going back to their 9 to five routine might work for some but will only be effective if most people return. Remote working means fewer people are in the office, raising questions about office budgets.

The reality is banks, financial services firms and other businesses are unlikely to choose a single workplace model. They are more likely to go in different directions and experiment with different models until they find one that suits their business needs and employees. In the future historians will examine the pre-pandemic office and explore the concept of how there was once a time when most businesses chose a one-size-fits-all office.