Poll: Remote work is largely 'sticking' at service firms in the NY area

Service businesses in the metropolitan area, including attorneys, accountants and stock brokerages, project their employees will work from home next year almost as much as they do now, according to a new poll.

Several Long Island executives agreed but told Newsday that they are encouraging staff to be in the office most of the workweek. They said face-to-face interactions foster collaboration and a productive work culture.

"We have a hybrid schedule for a lot of our professionals with a strong push to have them in the office as much as possible because we have clients to serve and we need the collaboration, the training and mentoring of new employees," said Jeff Agranoff, chief human resources officer at Grassi Advisors & Accountants. The firm, with 430 employees, has offices in Jericho, Ronkonkoma and Manhattan, among others.

He projected that 20% of Grassi's work would be done remotely next year, down from 25% this year and 50% in late 2020.

The Federal Reserve Bank of New York, based on the results of its poll, estimated metro-area service firms would have 18% of their work done outside the office in 2023. That’s down three percentage points from this year but more than double the pre-pandemic level. 

Service-firm employees work at home 3.3 days per week, on average. A majority are home on Fridays; the largest numbers are in the office on Wednesdays and Thursdays, according to the bank.

Still, the extent of remote work in the service industry varies widely. It averages more than 50% for office-based businesses but less than 10% for retailers, bars, restaurants and hotels.

“Some of the increase in remote work that began early in the pandemic is sticking,” said New York Fed economists Jaison R. Abel, Jason Bram and Richard Deitz in an analysis of the poll, which was conducted Aug. 2-9 of about 200 service firms in the metro area.

The poll responses suggested that worker productivity has fallen in some instances. “Thirty percent of service firms said that productivity had declined, while 21% said it had risen,” the economists said. 

In Uniondale, less than 15% of the work of the Farrell Fritz law firm is being done remotely, according to managing partner Robert C. Creighton.

"We expect remote work to continue to be part of the equation but we greatly value the in-person experience of our team members," he said, referring to the law firm's 160 employees, 140 of whom are based locally. "The majority of our attorneys are back in the office."

Farrell Fritz also has no plans to reduce the amount of office space that it rents, though fewer people are present at one time compared with before the coronavirus struck in early 2020.

 "We need the space we have to facilitate future growth," Creighton said.

The New York Fed found that just 16% of service firms have reduced their office space.

Real estate brokers reported that it's large corporations, not service firms, that are seeking to shrink their offices by subleasing space to others.

Dan Wiener, a principal in the Melville office of Avison Young, said service firms are extending their office leases for shorter periods of time so they can  "figure out whether or not they're going to need the space that they're in."

Still, he and others predicted only a small number of service businesses would jettison their offices in favor of 100% remote work.

Seeing 'whites of people's eyes'

"The majority of business owners that I talk with want their employees back in the office, they want to return to some sort of normalcy," said Wiener, who also is president of the trade group Commercial and Industrial Brokers Society of Long Island. "Business owners feel they need to see the whites of people's eyes to hold them accountable."

A notable exception is MSC Industrial Direct Co., which has moved to remote work permanently.

The distributor of industrial supplies shrank its Melville headquarters by 85%, selling a 170,000-square-foot office and warehouse at 75 Maxess Rd. and renting 26,000 square feet at 515 Broad Hollow Rd., also in Melville. The public company has about 400 employees locally.

MSC opened the smaller office in March. When staff members need to come in, they use a mobile app to reserve a desk under a system called "hotel seating." They also can reserve a meeting room.

"Our associates have told us they value having the flexibility of working remotely and the work-life balance that it provides them." MSC spokesman Paul Mason said last week. "They’ve also shared that they appreciate having the opportunity to use our new office to meet with their peers, customers and suppliers and have enjoyed reconnecting in person with each other."

He added that the company plans to hold a cookout at the Broad Hollow Road office in the next few weeks so employees have "a chance to see each other in person in a fun, relaxed setting." 

Small employers reopened their offices soon after New York State lifted its 2020 lockdown to slow the virus' spread, while large employers moved far more slowly.

On Tuesday, Capital One bank plans to fully reopen its facilities nationwide for the first time in 2½ years. About 430 people are assigned to the bank's office at 1307 Walt Whitman Rd. in Melville, according to a spokeswoman.

The bank has adopted a "fully hybrid model," where personnel are to be in the office on Tuesdays, Wednesdays and Thursdays, and work from home on Mondays and Fridays. Employees must be vaccinated against COVID-19 or tested regularly to work in  the office.

"This initial approach provides associates with meaningful time working from home and scales virtual work across the company in an efficient way," Capital One CEO Richard Fairbank wrote in a staff memo provided to Newsday. The hybrid model "also concentrates the time when we are in the office in order to maximize the collaboration and human connections that we know are an important part of Capital One's culture."

At the Grassi accounting firm, officials said employees have generally embraced returning to the office.

"Our competitors say that working from home keeps people," said Agranoff, the human resources officer. "But we found that having people come to the office keeps people. We've had one of the highest [employee] retention rates in our industry over the last 18 months."

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.