Co-located Company
A co-located company is a business model where most employees work together in a shared physical space, like an office or corporate campus. This contrasts with remote-first companies or distributed teams, where employees work from various locations or entirely online.
In co-located settings, face-to-face communication and on-site collaboration shape daily work. Shared resources also play a key role. While hybrid models are gaining popularity, especially after the pandemic, many industries still prefer co-located teams. This model supports physical presence, consistent supervision, and direct client interaction.
What is the Co-Located Workplace Model?
A co-located company has a central workplace. Employees work from a specific office during standard hours. Co-located teams share office amenities and meet face-to-face for discussions. They follow regular workplace norms, such as scheduled meetings, hierarchical reporting, and consistent hours.
Hybrid work arrangements may allow for some remote work, but a company is still co-located if it mainly operates from the office.
This model is often preferred by industries that need on-site supervision and real-time communication. Examples include finance, legal services, healthcare, and manufacturing. In these fields, physical presence helps maintain operations and meet regulations.
Comparison: Co-located vs. Remote and Distributed Models
The co-located structure is very different from modern options like remote work and distributed company models.
In a remote-first company, employees mainly work from home or other places outside the office. They use digital tools to manage communication and productivity. These companies believe that being physically present is not necessary for key business tasks.
A distributed company takes this idea further by not having a main headquarters. Employees work from various cities, countries, or continents. These companies use asynchronous communication methods and cloud-based platforms to ensure connection and teamwork.
Co-located companies differ in several critical areas:
Communication and Collaboration
Co-located teams enjoy benefits from face-to-face chats, desk visits, and hallway talks. These interactions help with quick decision-making, build strong relationships, and resolve issues faster.
In contrast, remote teams use tools like Slack, Microsoft Teams, Zoom, and project management systems like Asana or Trello to stay connected. While these tools support real-time and delayed communication, they need careful documentation and discipline to prevent miscommunication and silos.
Talent Access and Geographic Flexibility
Co-located companies often recruit talent from a small area. This can limit access to specialized skills and diverse backgrounds. As a result, innovation may suffer, and the company’s growth could be restricted.
On the other hand, remote companies can tap into global talent pools. This allows them to hire the best candidates, no matter where they live. This flexibility supports inclusive hiring, multilingual teams, and coverage across time zones, which is vital for 24/7 operations.
What are the Advantages of the Co-located Company Model?
While remote and distributed work offer flexibility, co-located models have lasting benefits that many companies value:
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Stronger Team Cohesion: In-person interactions build relationships, enhance cultural fit, and boost employee engagement.
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Simplified Supervision and Training: On-site managers can directly oversee staff, coach new hires, and conduct performance reviews with real-time feedback.
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Operational Control: Having employees together supports centralized control over workplace policies, security measures, and emergency procedures, making compliance simpler.
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Faster Onboarding: New employees in a shared office benefit from hands-on training, quick access to tools and colleagues, and a better understanding of company culture.
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Improved Security: Companies in regulated sectors like banking, defence, or healthcare need strict control over data and access. A centralized environment helps enforce these protocols.
Limitations of Co-located Structures
The co-located model has its benefits, but it also has limitations in today’s flexible work world.
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Reduced Talent Access: A limited hiring radius can hurt efforts to attract top talent in crowded or costly job markets.
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Lack of Flexibility: Employees may want a better work-life balance or prefer hybrid models. These options cut down commuting time and boost autonomy.
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Office Overhead: Keeping physical workspaces means high fixed costs. Expenses like rent, utilities, and facilities management can take funds away from growth efforts.
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Limited Global Reach: Co-located companies may find it hard to serve global markets well. They face issues like time zone differences and language barriers.
Hybrid Variants and Evolving Definitions
Many co-located companies are now using hybrid models. This change meets evolving employee expectations and embraces new technology. These models let some employees work remotely for part of the week. While companies still have a main office, they also use cloud systems, HR tech tools, and virtual meeting platforms.
This blended approach combines the social benefits of being together with the flexibility of remote work. HR teams need to create policies that support both ways of working. They must balance fairness, accountability, and teamwork.
Cultural and Managerial Considerations
Culture plays a big role in co-located settings. When employees work side-by-side, they share organizational culture through their behaviour, the physical space, routines, and visible leadership. Managers often use informal feedback, casual recognition, and observation to assess morale and productivity.
However, this visibility can lead to digital presenteeism. It can create an overemphasis on “face time” as a sign of commitment. This issue is less common in remote work, where deliverables and outputs are clearer.
From a leadership view, managing a co-located team needs consistency in expectations. It also requires support for professional development and awareness of burnout or overwork, especially in high-pressure industries.
Compliance and HR Policy Implications
Co-located companies enjoy simpler compliance rules, especially in one state or area. HR teams can standardize payroll cycles, employment agreements, and benefits administration easily. They avoid the complexities of multi-state or international labor law.
In contrast, companies with satellite offices need to keep policies consistent across all locations. Centralized HR document management, regular internal audits, and workplace training programs are key. These steps help maintain legal and cultural unity.
Conclusion
A co-located company follows the traditional business model. Here, employees work together in the same physical space. Although remote work and distributed teams offer more flexibility and digital collaboration, the co-located setup is still important. It suits businesses that need in-person communication, close supervision, and central control.
In the end, deciding to stay co-located or shift to a hybrid or distributed model should match the organization’s mission, workforce makeup, operational needs, and long-term goals.
For definitions of key HR and employment terms, visit the Rivermate Glossary.