After months of working from home during the COVID-19 pandemic, Patrick Nee welcomed a return to the normal rhythms of a company office.
His Boston-based financial advisory firm expanded in April into space leased from CIC Providence LLC in the Wexford Science & Technology building at 225 Dyer St. in Providence. On a recent day, Nee’s workplace had an air of normalcy to it.
He conducted business without the distractions of his home life, which includes raising three young children, and he even held a consultation with a client from Narragansett inside his office.
“Our average client is 65 years old,” said Nee, a co-owner of Boston Retirement Group. “They like to sit down across the table. The 30-year-olds are fine doing things digitally, but our 70-year-old clients? They want to look you in the eye and feel comfortable.”
While the end of the American office building has been forecast by some, Nee’s situation could be an early indicator of the shape many offices may take after the pandemic has passed. His firm is part of an influx of new clients renting co-working space at CIC Providence in order to take advantage of smaller spaces with more-flexible terms.
Indeed, many employers say they expect they will keep their offices long after the crisis is over, but they will most likely use them differently. After all, surveys have shown that most office workers want to retain some element of remote work permanently, and some want to work remotely full time.
Such sentiments leave management to figure out the extent to which they can accommodate employees while preserving company culture and somehow still foster an environment that promotes formal collaboration and serendipitous encounters.
Roger Achille, a professor of management at Johnson & Wales University, said many businesses are struggling to determine how the office will operate in the post-pandemic era.
“There was a point in time when just because of technology, we needed to go to a workplace in order to produce and in order to communicate,” Achille said. “But what that also did was it compelled employees to be their most productive during the time period that the employer set aside for office hours.”
Now the office may never go back to the way it was.
‘NOT SPONTANEOUS’
A year after Rhode Island office employees largely decamped to their homes to work remotely during the pandemic, managers and executives have started to ease them back slowly.
That process may gain speed after May 28, when Rhode Island will start allowing businesses to staff offices at 100% capacity, provided there is 3 feet of spacing between workers.
For some employees, returning to the office is not a hard sell. They’re tired of the distractions that happen at home or they miss their office acquaintances and having a set time and place for work. For many, unchecked remote work has led to an uncomfortable blurring of the line between work and life.
Providence law firm Cameron & Mittleman LLP has followed state guidance on bringing back workers, which had allowed companies to return up to half of their office-based employees at a time.
John Wolfe, the firm’s managing partner, said the loss of office culture was clear when most employees were working remotely.
“There is an exchange of ideas,” he said of when the office is fully staffed. “You happen to run into someone in the kitchen and you say, ‘Hey, there is this problem I’m working on,’ and they have some good ideas. ‘Have you talked to so-and-so, or have you thought about this?’ ”
The firm, which has 21 attorneys, maintained its productivity even when associates were far-flung, but collaborations over videoconferencing have limits, according to Wolfe.
“It’s not spontaneous, and it’s not the same,” he said.
Peter Marino, CEO and president of Neighborhood Health Plan of Rhode Island, said there was a “family vibe” among the insurer’s 600 employees in Smithfield before the pandemic arrived.
Today, about 20 people are working in the building, and Marino said he hopes to get everybody back in the office eventually, even if on staggered schedules with some working from home on certain days. The trick will be instituting that flexibility in a way that maintains workplace connections.
“You need that fluid collaboration, that effortless interaction that people have when they pop their head into someone’s office,” he said.
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ALTERED VIBE: Peter Marino, left, CEO and president of Neighborhood Health Plan of Rhode Island, talks with Rob Magnan, facilities and mail room coordinator at the insurer’s headquarters in Smithfield. Marino says only about 20 of Neighborhood’s 600 employees are working in the building now, but he hopes to get everybody back in the office eventually to restore the “fluid collaboration” and “family vibe” that existed before the pandemic. At right is security officer Jennifer Castellanos. / PBN PHOTO/ELIZABETH GRAHAM[/caption]
SHIFTING LANDSCAPE
How many companies have refilled their offices?
In Providence, the return of the office workforce has picked up steadily since January, according to Laurie White, president of the Greater Providence Chamber of Commerce, who polled several building managers.
“We’ve seen a steady increase in people going into offices, we think it’s up by about 20% from the first of the year,” she said. “It’s obviously tied to the [increased distribution of COVID-19] vaccine.”
CBRE New England recently reported that most downtown office buildings had few people working inside them, about 8% to 12% of the usual workforce. Commercial real estate and business professionals estimate that of the offices that have reopened, about one-third of the workers are back on any given day.
In Rhode Island, many larger companies have been cautious about reopening.
Woonsocket-based CVS Health Corp., for example, says it plans to begin returning employees to its corporate offices in September “in a gradual, carefully staggered way.”
The company employs about 6,000 people at its Woonsocket campus.
“Our new approach to work will include a combination of in-person and virtual work,” CVS said in a statement. “We fully expect our approach will evolve over time as we learn what is working well and where we need to adjust.”
Others, such as Citizens Financial Group Inc., have placed a high priority on face-to-face interaction. Citizens plans to ask its workers to return to its Providence headquarters and its 123-acre Johnston campus in June, starting with one day a week.
Citizens said it is developing plans that will balance health concerns with its culture of collaboration driving creativity. “Over time, we anticipate that more of the workforce will phase into working from the office,” said spokesman Rory Sheehan.
Meanwhile, Fidelity Investments Inc., which employs 3,300 people at its Smithfield campus, has been fully remote since the pandemic started. It plans a long-term return to the office that will allow for scheduling flexibility for employees while meeting the needs of the company.
“The pandemic has shown us that while many of us can work remotely, time ‘on-site’ together is vital for our culture, business process, learning and development, networking and ultimately robust career growth,” said spokeswoman Kimberly Reingold.
In April, the Providence Foundation surveyed businesses in the city about their return to the workplace and attitudes about flexibility for workers.
A total of 37 companies responded. Of them, 73% had a downtown office.
The findings: respondents expected to bring 50% of employees back to the office by June 30, 78% of employees by Sept. 30 and 95% of employees by year’s end.
A majority of the companies – 62% – expected to enact a hybrid work format, where employees would work from home on some days.
Some respondents are considering relocating or reducing office space. But 41% aren’t considering any physical changes to the workplace.
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SPECIFIC NEEDS: Leeds Mitchell, executive vice president MG Commercial Real Estate Services Inc., says he’s fielding calls from businesses looking for available offices in suburban markets, such as this space in Warwick. The previous tenant had just relocated to an office in the same building. / PBN PHOTO/ELIZABETH GRAHAM[/caption]
In terms of office leases, occupancy has remained fairly stable, according to commercial real estate professionals. Unlike residential leases, commercial leases generally are longer term and more difficult to break. Unlike Boston and New York, Providence has not seen a significant increase in listings by locked-in tenants to sublease office space.
Leeds Mitchell, executive vice president of MG Commercial Real Estate Services Inc., said he is fielding inquires about available office space in suburban markets such as Warwick. Many of the calls are from local businesses seeking small offices. As clients near the end of their lease, they want more-flexible terms. Brokers expect that more clients may decide to opt for smaller footprints and shift to more remote working.
Others are steering away from traditional office buildings and turning to shared workspaces. CIC Providence, which opened in 2019, has leased about half of its space, according to Rebecca Webber, general manager. Not all of these clients have returned; the number of people inside the building – now called Point 225 – is about half what it was prior to the pandemic, she said.
But CIC Providence has more tenants and higher revenue per tenant than it did before the crisis, which may reflect increased demand for more-flexible terms. Most of the inquiries are about small office needs for short terms, Webber said.
“We are fielding interest from people who realize they don’t want to be at home full time, or they don’t want to be in the office full time,” she said.
What do these changing preferences mean to state economic development officials who struck tax deals with numerous companies that have relocated or expanded in Rhode Island in recent years?
The state is focused on creating the conditions under which offices can fully reopen safely, according to Commerce Secretary Stefan Pryor.
If a company that accepted a tax incentive in exchange for creating jobs in Rhode Island now has an empty office, it doesn’t mean the state is getting no return on that investment, Pryor said.
He pointed to the Qualified Jobs Tax Credit, which is only granted after employees work a full year and pay state income taxes.
“Whether a person is contributing to the Rhode Island economy is a broader question,” Pryor said. “There are many workers who don’t sit at a desk at all in the course of their job, pandemic or no. It’s a bigger question than if someone is in an office.”
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COZY SURROUNDINGS: Attorney Marc Lewin is one of the tenants who has recently moved into the co-working space at CIC Providence to take advantage of the facility’s flexibility. / PBN PHOTO/MICHAEL SALERNO[/caption]
MAKING IT WORK
Many employers have found that worker productivity hasn’t declined in the absence of an office.
Why? Some would say because people are working extra hours at home, but others say benefits such as flextime have added to job satisfaction and have motivated workers to perform better.
Blue Cross & Blue Shield of Rhode Island, which had about 600 people working in its 13-story headquarters in downtown Providence before COVID-19 struck, examined job descriptions after sending people home to work last year, according to its executives. The idea is that maybe they don’t need to all be back in the office.
The call center, which used to be based downtown, has gone 100% remote, according to Michele Lederberg, executive vice president, chief legal officer and chief administrative officer.
“[We] found that that is as effective and more accommodating, and we’ve found we have substantially less turnover,” she said.
Aimee Phelps, teaching professor of management and human resources at the University of Rhode Island, said the pandemic has tested long-held notions that work is best performed in a traditional workplace and that face-to-face interactions are crucial to culture and productivity.
“From what I know, engagement of employees is the key to successful organizations,” Phelps said. “If employees are engaged, they’re going to do what is necessary to collaborate, to reconnect, to be in touch with other employees when they need to be.”
Alan Litwin, managing director of Providence-based Kahn, Litwin, Renza & Co. Ltd., said remote work has worked surprisingly well over the last year – so well, in fact, the 250-person accounting firm is already planning to incorporate flexibility into its employment policies, allowing workers to request when and where they work.
The decision followed a poll of employees that showed about 70% said they wanted to work at least part of the week at home, he said.
“It doesn’t mean that what they want is necessarily going to work,” Litwin said. “We want to accommodate them but within the context of the business. This is how we’re going to operate in the future. This is it.”
A more-flexible workplace ultimately will help him recruit talent, he said. “We want to be the employer of choice in our markets,” he said. “We think the flexibility gives us that opportunity.”
Litwin does acknowledge one snag: KLR hired about 20 recent college graduates in 2020, and they have yet to work alongside more-experienced colleagues.
“I don’t think they can learn what it’s like, in a professional environment, if they’re sitting in a basement and not seeing people,” Litwin said.
Another tricky part of the situation: Figuring out when to start bringing back employees to the firm’s offices in Providence, Newport, Massachusetts and Switzerland. As of mid-April, only 20 employees were working in a KLR office.
“None of us has ever been through this. Things are changing rapidly, whether it’s business needs, the vaccines, the [Johnson & Johnson] delay, the increase in cases,” Litwin said. “Every day there seems to be a new factor that goes into the calculus.”
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.