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Pandemic reshapes Sonoma County business, shifting office work into homes

The hybrid office, blending work from home and on business premises, is seen as a way forward as the pandemic recedes|

Insight: Life After The Pandemic

This story is part of a new quarterly special section at The Press Democrat focusing on stories and issues of community-wide importance. This debut edition, publishing in print on March 28, is focused on stories examining how our lives will be different after the pandemic abates. Look for the next Insight section in late June.

Read all the stories here.

Workplace shutdown orders during the coronavirus pandemic have spawned a global business trend that some of Sonoma County’s largest and smallest employers have adopted: mixing work from home with time at the office or forgoing the office entirely.

Sonoma County government, the area’s largest employer, has had more than half of its 4,400 employees working partially or fully from home during the pandemic and plans to continue that option into the post-pandemic era.

In early February, 2,380 county employees — about 54% of the workforce — logged telework hours, about the same number as in early May 2020.

“The county anticipates telework will be a new way of work into the future, and is working on a more permanent telework policy,” human resources director Christina Cramer said in an email.

Going forward, the county may reap some cost savings from the continued operation of what’s known as a “hybrid office” — accommodating work from home and at company sites — but the extent of fiscal gain remains unknown, she said. Departments will be left to figure out the right balance of remote work and “full service delivery post COVID,” Cramer said.

Keeping workers at home

Hybrid offices have established themselves as a new feature of the post-pandemic business world, according to a BBC report on a May survey that showed 55% of U.S. workers want a mixture of home and office working.

Hybrid offices are catching on in Sonoma County, while educators and health care providers plan to extend online strategies borne of necessity during the pandemic.

More than three-fourths of Santa Rosa’s nearly 1,500 city employees have duties that cannot be performed remotely, but City Manager Sean McGlynn said he is considering the possibility of work-from-home or hybrid options.

“There likely won’t be a significant cost savings,” he said, because so much of the workforce must operate on-site or in the field.

But any remote work option “would be in alignment with the city’s climate action goals” and could benefit employees’ “work-life balance and overall morale,” McGlynn said.

The Climate Center, a Santa Rosa-based environmental nonprofit with 18 employees, had already decided to give up its office and work entirely from home, with in-person staff and board meetings twice a year. One officer lives in the Lake Tahoe region.

“We have found that video conferencing has been a very effective means of communicating with one another, with policymakers and with donors and potential donors,” said Ellie Cohen, the CEO.

One “silver lining” to the pandemic, according to climate observers: working from home curbed greenhouse gas emissions from vehicle tailpipes.

Daniel Kammen, a professor of energy at UC Berkeley, said ground transportation emissions decreased by 40% worldwide mainly because of working from home.

Rebooting the office

At the other end of the spectrum, Keysight Technologies, the county’s second largest private employer, plans to bring most of its 1,500 employees back to their sprawling Fountaingrove site.

“Our culture has a special DNA of sharing, collaboration, high performance, passion and innovation that thrives when we work together in person,” Hamish Gray, senior vice president of corporate services, said in an email, quoting company chairman and CEO Ron Nersesian.

Keysight was the first local company to close operations in early March 2020, when an employee who sailed on a coronavirus-stricken cruise ship from Mexico to San Francisco was the first local person to test positive for COVID-19.

The company reopened four days later after a thorough cleaning, and on March 17 the county ordered residents to stay home and limited all but essential business and government operations. A year later, after nearly 30,000 corornavirus cases and more than 300 deaths, the county embraced its clearest advancement in reopening, though most office-based operations remain limited.

Scientists and public health officials have said COVID-19 will fade with the progress of mass vaccination, but “no one seems to know when that will be,” said Sheba-Person Whitley, executive director of the Sonoma County Economic Development Board.

Businesses are yearning for “some sense of normalcy,” she said, noting that “so much of our local economy depends on gatherings,” underscoring the importance of restaurants, wineries, breweries, hotels and shopping that make up the backbone of the hospitality industry.

Person-Whitley said she has heard from some businesses considering hybrid work sites to reduce their office footprint, lowering rent and utility expenses.

For employers, to commit to such changes beyond the pandemic, the move has to pencil out now or in the near-term, said Robert Eyler, a Sonoma State University economist. Mixing work from home and the office “has to reduce costs, raise revenues or both for the employer to continue to do it.”

Eyler predicts it will take four years — through the end of 2023 — for the county to recover from its peak pandemic job losses, which hit nearly 35,000 a year ago, equating to more than 14% local unemployment.

As the economy regains health in 2024, businesses will face higher costs, worker shortages in some industries and an uncertain level of consumer spending, he said.

“There should be a real revival of the economy,” Eyler said. “The magnitude of that revival is a large question.”

The post-pandemic future looks brightest for construction, manufacturing, health care and professional services, he said, while brick-and-mortar retail, restaurants, hotels, hair and nail salons and fitness centers have a “deeper hole to climb out of,” he said.

“But the bottom line is clear: Working from home will be very much a part of our post-COVID economy,” said a report by the Stanford Institute for Economic Policy Research.

New headquarters, home offices

Steve Falk, CEO of Sonoma Media Investments and publisher of The Press Democrat, said the newspaper’s downtown Santa Rosa office was essentially vacated in March as about 150 people in the news, advertising and accounting offices converted to working from where they live.

“We know we can do it all from home,” he said.

When the office reopens, possibly by midyear, the newspaper will assess the prospects for a hybrid operation, and the accounting staff has already opted to continue working from home, Falk said.

With the lease on the Mendocino Avenue building expiring in late 2022, Falk said the newspaper is planning to downsize from 29,000 square feet to 12,000 to 15,000 square feet in a different building.

He expects about 30% of employees will work from home, another 30% opting for hybrid work and the rest returning to the office.

“I worry a little bit about the culture of the company (with limited interaction), but we’ll work it out,” Falk said.

Dave Peterson, a partner with Keegan and Coppin, a Santa Rosa real estate brokerage and management firm, dismissed the prospect of an “office market bloodbath” with “millions upon millions” of vacant square footage for offices spreading across the Bay Area, including Sonoma County.

The future will “look different” as companies adjust to hybrid operations, but “I do not believe for one second that the office is dead and won’t be returning,” Peterson said in his March market overview.

The office vacancy rate in Santa Rosa and in the entire county rose about 2% between the fourth quarter of 2019 and the fourth quarter of 2020.

Businesses are now “starting to see the light at the end of this very dark tunnel and are in a position where they must now make decisions,” Peterson said.

Change for many sectors, not for all

Hybrid offices may shift from a wide-open floor plan to small rooms with two desks, one occupied by a worker three days a week, the other by another person two days a week, said Keith Woods, CEO of the 1,100-member North Coast Builders Exchange.

“People on the (construction) job site will continue slinging hammers,” he said.

Sonoma County’s leisure and hospitality sector — which includes restaurants, bars and lodging — took big hit from the pandemic, shedding nearly 7,000 jobs in the year following December, 2019, a 27% drop.

“I don’t think we’ll ever go back to pre-COVID normal. It’s going to be a new normal,” said Joe Bartolomei, co-owner of the upscale 25-room Farmhouse Inn and Michelin-starred restaurant.

“We’ll be more careful about washing hands, keeping some sort of distance between us and other people,” he said. “I don’t know that we’ll be hugging each other.”

Bartolomei currently has 40 employees, half of his pre-pandemic staff, and plans “to run lean until I know what the future holds,” he said. “We can’t have people working remotely.”

“My hope is by midsummer we’ll be mostly out of this,” he said. “I feel like we’re headed in the right direction.”

Wineries are longing to reopen their tasting rooms, which are essential to the industry and “at the core of Sonoma County tourism,” said Michael Haney, executive director of Sonoma County Vintners, a trade group for more than 250 wineries.

“Wine is about people, wine is about experience,” he said. Online wine sales expanded during the pandemic but “by no means made up” for losses because of shuttered tasting rooms. Outdoor wine tasting has been permitted since July.

“We need to get back inside,” Haney said.

Medical care adapting to new norm

The pandemic prompted a radical makeover a year ago at Santa Rosa Community Health, which provides care for about 42,000 mostly low-income patients at eight facilities.

Office visits were immediately suspended and replaced within weeks by virtual care via telephone and online video.

“We had to do it differently,” said Gaby Leroi, the chief operating officer, limiting patient visits to serious cases, including people with COVID-19 symptoms or in need of testing.

Last year, the community health system recorded 122,047 patient visits via phone and video, accounting for almost half of all visits. In 2019, the telehealth tally was 36 visits.

“It is such a joy to see patients in person,” said Dr. Marie Mulligan, chief medical officer overseeing a staff of nearly 500 providers, expressing the organization’s preference for hands-on health care.

But telehealth improved patient access to care, relieving low-income people from the obligations to get time off from work, arrange child care and in some cases the choice of paying for gasoline versus buying food for the family.

It also paid off for providers.

“You would be surprised to see how much can be achieved with a video visit and see what someone’s house is like,” Mulligan said. “I had somebody open the refrigerator so I could see what was in there.”

Until the system’s clinics can safely reopen, about half of patient visits will continue via telehealth, said Annemarie Brown, the organization's communications and grants development director.

Eventually, the staff will assess its experience with telemedicine “to strategically reshape how we deliver care,” she said.

Tyler Hedden, CEO at Providence Santa Rosa Memorial Hospital, found it “tough to say” how work there will change as the viral threat recedes.

“There’s still going to be a presence of the disease in our community,” he said.

There will be a gradual relaxing of requirements for personal protective equipment and the screening process at Memorial’s entrances, Hedden said.

Memorial, with a staff of about 2,000 employees, has handled 643 hospitalized COVID-19 patients and another 548 cases in the Emergency Department.

There were fewer than five cases in the hospital recently, but Hedden said, “We have to make sure we don’t let our guard down.”

Evolution for educators

Educators from kindergarten to community college also had to reinvent their profession last year when coronavirus orders closed schools and forced a wholesale conversion to distance learning.

Santa Rosa Junior College’s curriculum of more than 2,000 classes lurched from just 12% online last spring to 93% this spring and the upcoming summer session will also be primarily remote instruction.

In the fall, President Frank Chong said he hopes to restore as many in-person classes “as we can safely take care of.”

But, he said, “I don’t think post-COVID normal will be the same. It’s never going to be the way it was before.”

That’s not all bad, Chong said, because students who live miles away on the coast, disabled students and working students appreciate the convenience of online learning, which will continue.

“The lesson learned is one size does not fit all,” he said.

The 15,500-student Santa Rosa City Schools also learned from its abrupt transition to learning from home, a move that was wildly unpopular with parents here and across the nation.

Some teachers and students, including those who would have been doing independent study, “thrived on distance learning,” Superintendent Diann Kitamura said.

But, she said, there is no substitute for conventional schooling: “You can’t replace a human with a computer.”

The city schools have devised a hybrid model for reopening schools in April, mixing online learning at home with in-person instruction at school, with mandatory masks and 6-foot social distancing.

“We think it’s better for students but it won’t look or feel normal to anybody,” said Will Lyon, the Santa Rosa Teachers Association president.

But restoring the human connection — “the high five or handshake on the way into the classroom” — is essential to education, he said.

Speaking perhaps for employers and employees, health care providers and patients as well as students and teachers, Lyon said: “I think it will be full-blown jubilation when this is behind us.”

You can reach Staff Writer Guy Kovner at 707-521-5457 or guy.kovner@pressdemocrat.com. On Twitter @guykovner.

Insight: Life After The Pandemic

This story is part of a new quarterly special section at The Press Democrat focusing on stories and issues of community-wide importance. This debut edition, publishing in print on March 28, is focused on stories examining how our lives will be different after the pandemic abates. Look for the next Insight section in late June.

Read all the stories here.

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