FedPoint adapts to needs of hybrid workforce

Melissa McLaughlin is chief human resources officer at FedPoint, and among her duties is overseeing the reimagined workspace for the hybrid workforce at its Pease International Tradeport offices. (Photo by Paul Briand)

Employers everywhere are dealing with a new normal when it comes to the post-COVID expectations for their workers. One of them is Melissa McLaughlin.

She is the newly named chief human resources officer at FedPoint.

Rebranded from Long Term Care Partners, FedPoint administers two large contracts for the federal government: the Federal Long Term Care Insurance Program and BENEFEDS, both under the oversight of the U.S. Office of Personnel Management (OPM). FedPoint is a trade name of the legal entity Long Term Care Partners, LLC.

FedPoint employs about 420 people, most of whom for two years during the COVID pandemic worked from home. With COVID in hindsight, employers such as FedPoint have had to come to terms with how to transition their employees back to the office.

Some companies have mandated that their employees return to the office on a full-time basis. Not FedPoint.

It has a policy requiring employees to come in person to work at their offices on the Pease International Tradeport at least two times a week. In doing so, the company has renegotiated its lease for less space, and it is retrofitting that space to meet the needs of the new work environment, making it an attractive, accommodating space that employees want to come to.

“The reason to come to the office is connections and collaboration,” said McLaughlin. “So that was the main thought process when we designed it. Don’t just have cubicle, cubicle, cubicle. Have breakout spaces, comfortable furniture, have good technology that connects you with your remote colleagues.”

FedPoint’s experience is instructive, as it is an experience of large-scale office employers everywhere. A hybrid office requires less space, and companies like FedPoint are getting new leases or renegotiating old leases to reduce their square footage. That, in turn, has created an increasing amount of vacant office space, here in New Hampshire included.

NH’s vacancy rates

The commercial office building vacancy rate in the Granite State for 2023 averaged out at 13.6%, a four-year high, according to a recent report from Colliers International, which has offices in Manchester and Portsmouth.

“The vacancy rate in New Hampshire has experienced a significant increase over the past four years. In the beginning of 2020, the New Hampshire vacancy rate was 7.5%,” said Colliers analyst Kristie Russell in the prologue to her report. “By the end of 2023, the rate reached 13.6%, jumping by 6.1%. Although this rate remained relatively steady compared to the last quarter, it climbed by 3.6% year-over-year, which was the largest yearly increase in the past four years.”

And that’s not expected to change much during 2024.

“The office sector will encounter further distress from continuing downsized space requirements and rising vacancies,” a separate Colliers International report predicted in its 2024 Commercial Real Estate Outlook.

“As tenants still consider workforce policies and real estate needs, leasing will reflect this, with most leases comprising less square footage. Under 10,000-square-foot spaces should dominate leasing in most markets,” it cited as among the trends to watch.

“Office assets need differentiation, and creating a boutique experience similar to that in hotels is a way to draw employees back. As the return-to-office momentum stalls, landlords need to earn the commute,” it added.

FedPoint goes hybrid

COVID forced a change in how a previously office-based enterprise conducted its business. Most everyone had to stay home. Those effects still linger.

“As a result of COVID, honestly, the expectations are different from our workforce and from leadership. It’s much more of a holistic look at a person,” said McLaughlin.

Some companies — once the cautions of COVID were listed — had the expectations that 100% of their employees would return to their office 100% of the time.

There was never that expectation at FedPoint. They asked their employees how they felt about returning to the office, and how they felt about coming back for a certain number of days each week.

Some people were truly scarred, and scared, by COVID. They had gotten ill, or they knew someone that had gotten seriously ill. FedPoint heard from employees that they liked the convenience of working from home, the ability to take a minute to do a load of laundry, get to their kid’s ballgame early in the afternoon, save some gas money in not having to commute to and from the office, all while meeting their company’s performance metrics.

“When we did bring people back, and that was April of 2022, we embraced the hybrid, where we said, ‘Two to three days a week we want you in the office,’” said McLaughlin. “We were pretty flexible.”

As the new normal in the office progressed, management realized it had space that wasn’t being used. FedPoint had seats for up to 520 people, far more than the needs of the hybrid model now in effect.

With the help of David Choate and Abigail Bachman of Colliers’ Portsmouth office, FedPoint renegotiated its lease with landlord Farley White at 100 Arboretum Drive on the Newington side of the Pease International Tradeport. FedPoint had shopped around at different locations, but chose to stay at Pease with the smaller space.

“This has been a great location within Pease Tradeport from which to operate. Since we opened our doors in 2002, we have grown from a fledgling backroom to a major contractor serving the benefit administration needs of millions of federal government employees and military personnel. We look forward to working here to expand our business in the coming years,” Paul Forte, FedPoint CEO, said in a statement.

FedPoint reduced its footprint from about 75,000 square feet to 44,000 square feet. It has left the first floor almost entirely (save a couple of conference rooms and fitness center) at 100 Arboretum Drive, now occupying the second floor and a part of the third floor for about 280 seats.

With a new seven-year lease in hand, FedPoint then decided it needed to reimagine the space for the new normal hybrid workforce. It sent everyone back home (except for a handful of office essential personnel) while the renovation work is being done, with an expected completion by April 1.

“We’re redesigning and kind of reimagining the space,” said McLaughlin. “It’s not going to be used the way it was before.”

Most workers don’t have their own cubicles and desks anymore. FedPoint is using a software called Tango Reserve as a desk-assigning tool. Employees use the software to say when they are coming to work, and they’re assigned a desk. Employees will be provided lockers where they can store their personal belongings and files.

A tour of the work being done at 100 Arboretum showed an abundance of open space, lounge areas, privacy booths and conference rooms. The point, according to McLaughlin, is to make the space attractive and functional enough that workers want to come back to the office, finding the equilibrium between the needs of the employees and the needs of the employer.

“There is a balance, and I think hybrid is that balance,” said McLaughlin.

McLaughlin, a certified senior professional in human resources, has been with FedPoint since its beginnings in 2002. In December 2023, she was promoted from director of human resources to a newly created chief human resources officer (CHRO). Those duties include overseeing facilities for FedPoint, which is a wholly owned subsidiary of John Hancock Life & Health Insurance Company.

“Melissa’s deep understanding and breadth of experience in areas that impact a person’s employment journey have long sustained our company’s ability to manage key services and functions, to respond to emerging workplace needs, and to compete effectively in the dynamic benefits administration marketplace,” said Forte.