Is Hybrid Work the New Normal? Insights from Duluth's Downtown Companies

DULUTH — The freedom and flexibility of remote positions have provided employees with a better work-life balance and refuge during the pandemic, but the decrease in foot traffic has visibly impacted the downtown landscape. The city is now facing more vacant corporate buildings, and small businesses are often struggling to stay afloat.

While some local companies had considered offering remote or hybrid positions before COVID-19, working from home was typically a privilege of IT professionals and a few others.

“Having some flexibility isn’t really a perk anymore,” said Duluth Area Chamber of Commerce Vice President Daniel Fanning. “It’s really more of the expectation and norm for many of the types of positions that are able to be performed remotely.” Many workers have grown accustomed to remote work, prompting several of the city’s largest employers in retail, health care, and energy to adopt a hybrid approach.

Pre-pandemic practices

Companies like Allete, Essentia Health, and Maurices had already implemented flexible work arrangements for some employees before the pandemic. For instance, COVID-19 compelled Allete to shift 50% of its downtown workforce to remote work, while the other half remained on-site to ensure electricity for its customers.

As restrictions lifted, a hybrid model was adopted to balance flexibility with in-person communication for relationship building. “At least 50% are here every day,” Allete Director of Human Resources Laura Krollman shared. “The rest really just have that flexibility to work that hybrid model.”

The hybrid model has gained popularity among most Chamber of Commerce members, according to Fanning. Maurices also implemented a structured hybrid work model aimed at enhancing productivity and maintaining consistency.

Companies strike balance

The hybrid model appears to be beneficial for both employers and employees, contributing positively to the overall economic health of the downtown area. “There is clearly a benefit to the local economy and local businesses when employees do come into the office, at least occasionally,” Fanning noted. Spending money in the community, whether for lunch downtown or after-work drinks, makes a difference.

Additionally, offering remote or hybrid positions broadens the talent pool for companies facing regional workforce shortages. “Casting a wider net allows bigger employers like Essentia to access specialized skills from a larger geographic area,” Higgins remarked.

Hybrid challenges

However, maintaining a strong culture among team members in a hybrid environment poses challenges. Krollman noted the importance of ensuring that both existing and new employees feel engaged. “If everybody works in their own silo, in their own vacuum, it can lead to some communication breakdowns, some culture breakdowns,” Higgins cautioned.

Offset loss of activity downtown

Despite the shift to remote or hybrid work, Duluth-based companies are investing in the downtown area to support the local economy. Allete has renovated public spaces, while Essentia is committed to housing and community projects. “We really chose the center of downtown. We chose to build where our roots are,” Higgins stated about their new medical center.

Downtown slowly gains activity

“It’s been encouraging to slowly but surely see increased activity,” Fanning remarked. As annual physicals and preventative care resume, health care systems are reporting an increase in patients. Ross expressed optimism about future developments in restaurants, housing, and businesses as Duluth adapts to its new normal. “My sense is that some form of hybrid is here to stay,” she concluded, while noting potential reductions in remote opportunities across industries due to the loneliness and challenges of purely remote work.