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How coronavirus will change the way we return to work

Businesses are rethinking their office space needs

Jun 22, 2020 at 8:00 am
    Collins Aerospace is the largest employer in Cedar Rapids. But more than half of its employees are working remotely during the coronavirus pandemic. Those who must report to the campus, primarily for manufacturing, are required to wear masks and Collins Aerospace reconfigured workspaces to maintain 6 feet of distance between workers. (Liz Martin/The Gazette)

    For Janet Godwin, chief executive officer of Iowa City-based ACT, the move to working remotely in mid-March “feels like a decade ago.”

    “It’s been an interesting experience — a learning experience — for everyone,” Godwin said.

    That learning experience now could become the norm for some companies. The quick transition to working from home during the coronavirus pandemic has shown many companies that the technology is there to keep it that way.

    “We’re going to see companies that are allowing people to work from home, so they’re going to need less office space,” said Scott Olson, a longtime commercial real estate broker in Cedar Rapids and a City Council member. “As their leases expire, they’re not going to renew with as much space.”

    Godwin said ACT is “having those conversations now” about work-from-home continuing after the pandemic.

    “We just have a lot of factors to consider,” Godwin said. “We’re taking our time working through that.”

    Locally, major employers have been hesitant to permanently commit to allowing employees to work from home. But it’s been successful enough for many to seriously consider its long-term feasibility.

    “Productivity hasn’t really been impacted,” Godwin said. “Some people have actually liked it better.”

    A spokesman for Toyota Financial said the increase in work-from-home technology has given the company more flexibility when deciding when or if to return to the office.

    ‘Truly exceptional’ results

    Transamerica Chief Operating Officer Jay Orlandi said through a spokesman that the “truly exceptional” results from working from home “gives Transamerica the flexibility to consider alternate arrangements.”

    Godwin said ACT doesn’t have a firm date of when ACT employees will file back into its Northern Iowa City headquarters along Highway 1. But she’s been hearing concerns about health and the need for child care — especially with summer camps canceled — from employees.

    “We’re not rushing into bringing people back to campus,” Godwin said.

    Aside from a few employees handling “critical in-office functions,” Orlandi does not expect employees to return before Labor Day.

    When that return — with a “carefully planned, phased and staged approach” finally does happen, it’ll be gradual, with less than 25 percent of employees in the office during the first phase, Orlandi said.

    Working from home indefinitely

    Toyota Financial, Geico and Tata Consultancy Services are among employers to have employees working from home indefinitely.

    “The safety of our associates and potential new associates is our focus right now,” Geico spokeswoman LeAnna Kruckeberg said in an email. “We will keep our associates and those that we are hiring working remote until further notice.”

    That leads to some practices that would’ve seemed unconventional before the pandemic. Geico, for instance, continues hiring in its customer service and sales departments — so there are some employees now with Geico who have never worked out if its North Liberty office.

    Collins Aerospace

    Collins Aerospace is one of the few major employers in the area to have a significant in-office presence. Slightly more than half of its employees are working from home. Company spokeswoman Pam Tverdy-Cleary said employees not working from home are “primarily manufacturing.”

    Those employees are required to wear a mask, and Collins Aerospace reconfigured workspaces to maintain 6 feet of distance between workers.

    Olson, the commercial real estate broker in Cedar Rapids, sees the impact of many employers considering downscaling office space or completely moving out will be more evident in late 2020, when many leases expire.

    “People are going to be making decisions,” Olson said. “How much office space do they really need?”

    Many companies that own the building they are in, such as Alliant Energy, Olson said, already have been increasingly leasing out space to others.

    Standard amounts of office space per employee across the country have decreased from 200 to 250 square feet per person when Olson started in the industry to 150 now. He’s heard of one insurance company using fewer than 100 square feet per person.

    Two possible paths

    He envisions two possible paths for companies after the pandemic. Some will downsize since they don’t need the space. Others will keep a sizable physical footprint to allow employees to socially distance from each other.

    Before the pandemic, Olson was marketing more than a million square feet of vacant office space. That included an 80,000-plus square foot building Honeywell occupied. The Charlotte, N.C.-based company moved out of Cedar Rapids in late 2019.

    Now he’s expecting the amount of inventory to rise, with different types of buildings selling well.

    “Within the next year, our market is going to be totally different,” Olson said.

    He’s remarketing many of the older spaces with more wall separations and less open space as a social distance-friendly space during the pandemic.

    “You can socially distance in your office,” Olson said.

    Many of those older buildings are being converted into apartments. Cedar Rapids has 1,200 to 1,500 people living downtown, Olson said, a fraction of comparable cities like Des Moines. That leaves plenty of room for future residential developments.

    “All the housing projects that have been built are normally leased by the day they’re done,” Olson said.

    Comments: (319) 398-8394; john.steppe@thegazette.com

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