Portland employers expect remote working to ultimately supplement, not supplant, office jobs

Advertising agency Wieden+Kennedy asked the more than 450 employees at its Pearl District headquarters to start working from home on March 13 as the severity of the coronavirus pandemic came into focus.

Five months later, those employees are still working remotely, and the company doesn’t expect to welcome most of them back to the office until sometime in 2021. While the remote working setup has been surprisingly effective, Jess Monsey, managing director at Wieden+Kennedy Portland, said that it has become clear as the pandemic has dragged on that employees miss the collaboration and personal connection that comes with sharing an office.

“In the first couple of weeks, everybody was like, ‘Wow, this is pretty interesting,’” Monsey said. “There was a novelty to it, and everybody was really happy and proud to see that we were able to still continue to do great work being separated from each other. But as time has gone on, I think everybody is feeling a desire to be able to be together again.”

Thousands of Oregonians have been working remotely since late March when Gov. Kate Brown began requiring office workers to work from home to the maximum extent possible. Those guidelines remain in effect in Multnomah County, which has yet to enter Phase 2 of Brown’s reopening plan. About 35% of the U.S. workforce nationwide has switched to telecommuting due to the pandemic, according to a survey by the National Bureau of Economic Research.

For many businesses, the transition to remote work was easier than expected, which has raised questions about whether some employees could continue working remotely indefinitely.

But while many office workers in Portland will work from home until at least the end of the year, real estate firms and market indicators suggest that most jobs will return to traditional offices after the pandemic ends.

“If you looked into the workforce that is dependent on offices typically, I would say that about 5% of workforces were working from home on a regular, if not full-time basis (before the pandemic),” said Julie Whelan, the head of occupier research at commercial real estate firm CBRE. “I think that this is going to accelerate that trend, but I don’t think it’s going to accelerate it to a point where offices become obsolete.”

EMPTY OFFICE BUILDINGS

When Multnomah County finally enters Phase 2 of Brown’s reopening plan, Portland businesses will be given the opportunity to slowly reintegrate workers back into their offices.

But remote work may remain the norm, even at that point.

Last month, Google announced that it would allow employees to continue working remotely until July 2021, becoming the first major U.S. corporation to announce such an extended timetable for reintegrating workers back into the office.

Other companies are still finalizing their long-term plans, but aren’t expecting employees to return to the office anytime soon.

Spokesmen for Amazon and Autodesk, both of which have large footprints in Portland, said employees that can work effectively remotely would continue to do so until 2021.

Laura Nichols, director of global workforce at tech company Puppet, said that most employees wouldn’t return to the company’s headquarters in downtown Portland until at least November, and possibly not until next year.

Bob Speltz, a spokesman for insurance company The Standard, said that the overwhelming majority of the company’s workforce would not return to its Portland office this year both due to the coronavirus crisis and what the company views as disruptions and unsafe conditions around its downtown office.

Speltz said the company has put together a committee to evaluate plans for returning to the office and to consider long-term work arrangements. Other companies are taking similar steps.

“Longer term, we are exploring more permanent remote and alternative work arrangements, and don’t know yet how many workers will return to downtown next year and thereafter,” Speltz said. “Our more than 2,100 Oregon employees have proven remarkably resilient and productive since we began work from home in mid-March.”

The move to remote work has contributed to a significant decrease in foot traffic in downtown Portland. That foot traffic is unlikely to return to normal until office workers come back en masse.

TriMet says trips downtown are down more than 75% this summer compared to last year. Parking meter transactions are down a similar amount, and traffic into downtown across the Morrison Bridge has fallen 43% compared to last year, according to the Portland Bureau of Transportation.

THE FUTURE OF WORK

But while the pandemic has prompted some companies to rethink the future of work, there doesn’t appear to be data pointing toward a mass exodus from downtown Portland office buildings in the long-term.

A decrease in demand coupled with increased supply drove vacancy rates at Portland office buildings up to 12.8% in the second quarter, according to real estate firm JLL. But the vacancy rate hasn’t come close to matching the level it reached during the 2008 financial crisis.

Rental prices for Portland office spaces remained stable, landlord collections remained over 90% and sublease availability increased only minimally in the first half of 2020 as well, according to research from CBRE.

In another report, CBRE surveyed 126 senior-level global real estate executives. Of those surveyed, 70% indicated that some portion of their workforce would be allowed to work remotely full-time after the pandemic. But 41% said the importance of the physical office would decrease only slightly after the pandemic and 38% said the office would remain as important or become even more important.

“The office isn’t going away, but the role the office plays for people is going to change,” Whelan said. “I think the big change that we’re seeing coming out of this is what I would describe as more trust between employers and employees where an employee can now be a little bit more autonomous in terms of what they’re doing and where they’re working.”

Nichols echoed those sentiments. While nearly 28% of Puppet’s employees worked remotely prior to the pandemic, Nichols said the company still values having an office environment where employees can collaborate.

She said that the role that offices will play for Puppet employees long-term may differ by location. In Portland, Puppet is considering implementing a more flexible model where employees can schedule time to work in the office as needed.

But even if the company goes that route, Nichols said she doesn’t see it downsizing to a smaller office. In fact, she said having a large office space could be critical for Puppet as it slowly and safely brings employees back into an office setting.

“We don’t see the office going away for Puppet completely, like some companies have announced, but we are using this as an opportunity,” Nichols said. “How do we evolve with this? How do we use the office differently? How is the remote office one set of tools and the office (building) another set of tools, depending on how you’re looking to work?”

— Jamie Goldberg | [email protected] | @jamiebgoldberg

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