Businesses are finally able to return to a sense of normalcy in our post-COVID society. There has been a lot of news about companies like Twitter, Google, and Facebook extending their work-from-home policies “forever” (or until 2021). But the reality is that many businesses won’t be able to operate remotely forever. The other, more difficult reality is that cautious employees won’t want to return to their offices in the first place, since it involves public transportation and avoidable long commutes to busy cities.
In the context of innovation, the idea of satellite office Regional hotspots for employees are becoming increasingly popular. The term satellite office refers to the interconnection of businesses operating from multiple regional offices while potentially keeping their headquarters (HQ) in a city center. In turn, businesses can reduce their downtown headquarters costs by having employees work locally across the country (or globally) in a decentralized work model.
This guide covers the definition of satellite offices and how they differ from other workspace models such as hub and spoke offices, regional offices and office campuses. We will also address the concept of satellite offices and their function in a post-pandemic world.
What is the definition of satellite office?
Meaning: A satellite office is a branch of a company that is physically separate from the main office of the business. Although they are decentralized and physically separate, they are known for their interconnectivity. The capacity of a satellite office can range from one employee to hundreds of employees. They can also be geographically dispersed across a country or the globe, depending on the business requirements.
The working model is similar to the office.satellite
Satellite offices are a relatively new phenomenon that have become increasingly popular during the coronavirus pandemic as businesses look for ways to safely bring their employees back to the office.
There are many different terms used interchangeably to describe satellite offices and their similar models. However, they have notable differences which we will discuss below.
You may have heard of a decentralized office being referred to by one of the following terms:
Hub and spoke office
A “hub and spoke” office is a flexible workspace where businesses allow employees to work from their city center or from a strategic, dedicated “spoke” location of one or several regional workspaces.
Satellite offices act as “spokes” in the hub-and-spoke model, while a smaller headquarters in a city center or key business area serves as the “hub.” These hubs are then often used for basic business operations such as sales pitches, broader meetings, and networking activities. The term “hub and spoke” originated in the airport industry, where flights are swapped at a central “hub” airport between departure and arrival locations, cutting the number of empty flights in half.
Regional Office
Similar to satellite offices, regional offices can be considered as “spokes” in the hub and spoke model. However, there are some key differences between regional offices and satellite offices that should be pointed out here:
Regional offices tend to be located in the same country as the “central” office, while satellite offices are sometimes spread across the globe to ensure that the business achieves wider coverage.
Unlike satellite offices, which are typically smaller than the central office, regional offices are also different in that they are not necessarily smaller than the HQ office. They can be equally large or small, as their purpose is not to create “spokes” originating from one city, but rather to have each office stand in a different strategic position.
Office Campus
The term “Office Campus” is something you might hear people talking about if you take a trip across the Atlantic. In the United States, an Office Campus is a collection of corporate buildings in a specific area, similar to a college campus. These buildings can form the “hub” or “spokes” of the hub-and-spoke model, meaning that the office campus can be the organization’s main headquarters or one of several smaller satellite offices in a strategic location. Google’s main office complex in California, the Googleplex, is an example of an office campus that doubles as a headquarters.
Satellite office concept
While the concept of a satellite office is becoming increasingly popular today, the phrase has been used in the United States to describe smaller, geographically separate offices from the main headquarters since the late 1980s. In 1989, the Los Angeles Times ran a story on NBC News about its decentralization of its network to create 'what NBC described as a “satellite” office in Houston (with the use of quotation marks highlighting 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 concept of the satellite office has also come a long way – evolving from a tactic designed to gain coverage in an area to a more strategic move that benefits a company’s recruitment and collaboration strategy (see more on this below). Today, when businesses build a satellite office network, it is often linked to top-level goals such as tapping into a key market.
The COVID-19 pandemic has also contributed to the rise of the satellite office concept, as executives at FTSE 100 companies such as Barclays and WPP look to decentralise their offices and create more flexible working arrangements. The last global event to bring about a change in the way we think about office networks was the global financial crisis of 2007-08, which saw many businesses turn to satellite offices and smaller co-working spaces to save costs.
Satellite office function
New functions and benefits of satellite offices have emerged as the concept has matured. We will explore each of these in detail throughout this section.
Increase your reach
Introducing workspaces in areas away from the main hub increases the reach of the business while maintaining the benefits of an existing headquarters: having employees working in one area helps create a connection between the company and its local customer base. Satellite offices also provide an ideal meeting point for customers and employees in a specific location.
The strategic role of satellite offices
Satellite offices can serve as a base for expanding operations within a region. Whether you are looking to attract specific talent pools in a region or develop strategic business partnerships, locating one of your locations there will help your business integrate into the local network. For example, it is common to see companies headquartered in Ho Chi Minh City establish regional offices in cities such as Da Nang, Can Tho or Hanoi as part of a domestic expansion strategy.
Cost savings
You can also save costs by adopting a hub-and-spoke model and choosing out-of-town offices that are close to cities that are strategically important to your business. This not only ensures that your “spoke” office rent is kept low, but also gives you the option to shrink or relocate your city “hub” to reduce overhead costs as staff are dispersed across your satellite or regional offices.
Provide employee benefits
The final but arguably most important function of satellite offices is the benefits they provide to employees, including more flexible working hours and shorter commutes. If your employees have to commute long distances to your city-centre headquarters every day, you’ll save them time and money by spreading your office locations across Vietnam, making it easier to recruit and retain top talent. There are also health benefits to opening regional offices outside the city, such as reduced exposure to air pollution (we explore this in our post on employee health and wellbeing in the post-pandemic world).
To learn more about how you can benefit from satellite offices, check out our blog on how the hub and spoke model can help larger businesses.
If you are interested in the logistics of transitioning to a regional workspace model but are unsure where to start, please contact us or send us your questions.
A prime downtown office location used to be a badge of honor for many businesses. But it’s time to embrace the new world that the coronavirus pandemic and lockdowns have ushered in. The reality is that many businesses will be paying too much for a central office location in a busy city that is only half full because their employees don’t want to commute by public transport.
The elitism of a downtown address is a thing of the past. Post-pandemic, businesses are now being judged on their flexibility and ability to pivot in an ever-changing climate. If cash flow has been tight since the pandemic and your biggest expense is a downtown office that your employees don’t feel comfortable commuting to, it may be time to start looking at opening satellite offices in the area.
=====================================================
Are you looking for a flexible office solution, suitable for satellite offices in Ho Chi Minh City? G Office is the perfect choice for you! With Office rental services With our flexible service, you will have a comfortable and professional working space without having to worry about fixed costs. Contact G Office now to experience the service and receive attractive offers. G Office - the starting point for your business success!