Why some Minnesota companies are ditching the office and going remote, forever

As weeks turned to months for office workers staying home during the pandemic, the leaders of Qumu Corp., a Minneapolis company that sells video­conferencing services, took stock and then made a leap.

In December, they gave employees the go-ahead to work from anywhere from now on, saying they were shutting down the headquarters and two of the company's other three offices around the world.

"We'll be one of many, many going down this road," said Jason Karp, Qumu's chief commercial officer and chief counsel. "There are so many benefits that flow through it."

Many business leaders and workers are eager to return to the office. But a growing number of companies have decided to shift permanently to remote work, decisions that will ripple through lifestyles, real estate and the shape of communities.

The trend is most visible at technology companies, which tended to have more amenities and choices for employees. It's also being seen with workers who are on the road anyway.

And there's a countertrend: For workers who need a place away from home, employers are becoming customers of co-working space providers that rose up in the past decade. Qumu's new corporate address is a co-working space in downtown Minneapolis.

The pandemic has undeniably affected office space in the Twin Cities. Companies pushed out long-term decisions and opted for shorter leases if they could get them, according to a new report from Cushman & Wakefield. Overall, new leases dropped nearly 42% in the second half of 2020 compared with a year earlier.

Some well-known attempts at promoting remote work have failed in the recent past.

Best Buy Co. in 2005 launched what it called the Results Only Work Environment, to give employees at its Richfield headquarters the freedom to work however they chose as long as they got their work done. The retailer ended the program in 2013, however, as a new executive decided the hard work of restructuring the company would be easier if people were around one another to collaborate.

Around the same time, one of Silicon Valley's vanguard employers, Yahoo Inc., ended its telecommuting policy for similar reasons.

But advances in technology and the widespread experience of remote work since last spring changed the calculus.

Among the nation's large companies, Twitter and Facebook were among the first to announce permanent work-from-home plans last year, with Zillow, Square and Slack among those following suit. Outdoor retailer REI also reconsidered its real estate and in September sold off its new and unused 8-acre headquarters complex in Washington state to Facebook.

Executives choosing the remote-only path say they no longer need to be hemmed in by geography when recruiting talent. And their workforce gains flexibility and freedom from the hassles of a commute.

There can be substantial cost savings from pulling out of commercial office space.

In place of leases that cost about $1 million annually, Qumu plans to spend approximately $300,000 a year in stipends to help its 100 employees pay for technology and office upgrades.

"It's really about trying to create a healthy, balanced and productive environment for our employees," Karp said. "It provides great benefits to the company in terms of productivity, reduced carbon footprint and environmental impacts with employees that can work from anywhere."

In his daily checks of Linked­In feeds and messages, job recruiter Paul DeBettignies sees more Minnesota tech workers saying they want a remote-only role going forward.

"We've got good tech companies here but we don't have Google," said DeBettignies, whose company, Minnesota Headhunter, specializes in tech jobs. "But if Google is now willing to hire people in other parts of the country? It's really appealing."

Technology startups see broader acceptance of a work-from-anywhere strategy as a way to level the playing field. The market for talent is wide open, and venture capitalists may be more accommodating.

"Two years ago it was a milestone to have an office to show you are growing," said Cihan Behlivan, founder of digital sign company Corqueboard and an entrepreneur-in-residence with Beta.MN, which supports tech startups. "That discussion is not there any more."

Martin Hartshorne, chief executive of Minneapolis software company When I Work, doesn't plan to tear up the lease to the downtown office, but he'll probably blow up the existing floor plan when it's safe to return.

The 110-strong Minnesota staff became a permanent work-from-anywhere operation last fall. Since then, When I Work has hired nearly two dozen people across North America with no expectation that they'll ever move to Minnesota.

The remote-first mindset requires new processes, work rules and company values to erase traditional lines between those who work in the office and those who don't.

"Historically, if you really wanted to move up, if you wanted to get into leadership, you had to be at headquarters … closer to the top brass," Hart­shorne said. "My thought on building this company: That's gone. You don't have special status of being an office employee. Everyone has the same shot."

Getting the most out of a remote workforce means a massive culture shift, particularly at tech firms where the lure of office life might include sleek workspaces, free snacks, beer kegs and video games.

"So we're starting to figure out: What is the culture then?" Hartshorne said. "It's the way people care about each other. It's the way they talk about people in the company and the work they're doing and the passion they have. Those things live without the Ping Pong table and the cool office and the rest of it."

Then there's the challenge of managing and motivating an all-remote workforce, Qumu's Karp acknowledged.

The company contracted with co-working space Fueled Collective in Minneapolis and similar spaces in England and India to give employees access to meeting rooms or private offices if their home life makes it difficult to concentrate.

Qumu's orientation for new hires is a yearlong process, including job shadowing and virtual lunches with leaders. A mentor gets assigned before their official first day.

"That in-person, traditional interaction does have value," Karp said. "You have to find new ways to recreate new experiences that work in this environment."

Jackie Crosby • 612-673-7335

Twitter: @JackieCrosby