Businesses Ponder Permanent Work-From-Home Arrangements

SACRAMENTO (CBS13) - The 200 Nationwide Insurance employees working in Sacramento likely needed a moment to catch their breath when corporate officials announced at the end of April they were closing the Sacramento office. But then came part two of the announcement– everyone would keep their jobs and continue working from home even after the coronavirus lockdown is lifted.

Nationwide Insurance will hold onto its Ohio headquarters and three other campuses in Iowa, Arizona and Texas. But 9,000 employees representing 30 percent of the total workforce will work from home permanently, a company spokesman told CBS13. CEO Kirt Walker said in a statement the company has been investing in technology for a number of years to allow work-from-home arrangements, which helped with the sudden transition resulting from the pandemic.

Industry analyst Forrester Research says one of the major changes driven by COVID-19 is companies getting out of the real estate business and the high cost of commercial leases.

"While some employers have been reluctant to offer telecommuting beyond one day per week, work from home is now the only way many employers can keep going," the company wrote in a paper examining the insurance industry published the week before the announcement by Nationwide Insurance.

It appears to be a trend catching on with other industries.

READ: How To Work From Home Without Losing Your Sanity

"The interesting thing is technology really allows you to work from remote locations," says Mike Wyatt, regional president of K. Hovnanian Homes, the nation's tenth-largest homebuilder.

Wyatt says residential real estate sales suffered a mild setback the first week of the pandemic lockdown, but have soared in recent weeks.

"It's just been phenomenal," Wyatt said. "We had higher gross sales last weekend than we've had in the last five years."

Wyatt said much of the interest in the company's new home communities in the valley comes from buyers living near the coast, who now realize they're able to work from home– and a home they can afford. Wyatt said buyers are increasingly asking that the fourth bedroom be converted to a den for their new home office.

K. Hovnanian Homes says many buyers want the fourth bedroom converted into a den for their home office

"In the last four or five weeks, it really has been all Bay Area," he said.

Other industries that perhaps had never considered the possibility of employees working from home have been forced to take a fresh look. CBS13, for example, has much of its staff working from remote locations, including video editors. The intensive bandwidth requirements of high definition video would have made editing from home unthinkable just a few years ago.

The shift could spell trouble for an already-saturated commercial real estate market and the small businesses that rely on nearby office workers. But the tradeoff could be lighter traffic and cleaner air.

K. Hovnanian Homes, which has been so busy building homes for telecommuters, says it's taking a look at its own office needs. Wyatt says the pandemic has taught his employees how to work remotely and he expects at least some of them will be allowed to continue working from home when the virus crisis has passed.

"Does everybody need to be in the office working right on top of one another?" he asks. "Or can we allow some functions to work remotely? I think everybody's trying to understand what that's going to look like in the future."