Page 12 - BusinessWest December 9, 2024

EDITORIAL >>
Challenging Times for Economic Pillars
‘Eds and meds.’
You hear that phrase repeatedly in reference to the
local economy. It refers to education and healthcare, two of the largest sources of jobs in Western Mass.
And by education, we mean a broad spectrum, but especially higher education; this region is blessed with more than two dozen colleges and universities in communities ranging from Springfield to Amherst; Chicopee to Westfield.
On the ‘meds’ side, there are, likewise, a wide range of players, but the sector is dominated by its many fine hospitals, including all those within Baystate Health system as well as Mercy Medical Center, Holyoke Medical Center, Cooley Dickinson Hospital, and Berkshire Medical Center.
Both of these sectors remain strong, and they continue to be pillars of the local economy. But they are both being severely challenged, as evidenced by recent headlines and news items in BusinessWest.
Recently, Baystate Health, faced with $300 million in operat- ing losses over the past few years, announced the first step in what it is calling a ‘transformation,’ the difficult decision to reduce 134 leadership positions across the Baystate system. That’s less than 1% of the workforce, but a significant workforce reduction nonetheless.
And it symbolizes the many challenges facing all hospitals today as they continue to recover from COVID-related setbacks that include higher costs, inadequate reimbursements, stern workforce challenges, and the ongoing need to invest in new tech- nology and equipment.
Baystate has been in the headlines, but all area hospitals are struggling, and they are all making adjustments and hard decisions.
EDITORIAL >>
It is the same with many education institutions, a reality punc- tuated by a new organizational business plan announced at Amer- ican International College (AIC). Dubbed ‘Pathway to Progress,’ it details an expansion of degree options, but also a comprehensive re-enrollment program to engage and recruit former students to return to AIC and complete their degrees, as well as cuts within the athletic program, including the return of the men’s hockey program to Division II and the discontinuation of two women’s programs.
“In an era of unprecedented disruption across the higher- education industry, it is more important than ever that we do
all we can to ensure AIC can adapt and evolve to best serve our students — those we serve today, and in the future,” interim Presi- dent Nicolle Cestero said of the new business plan.
Her comments, and that plan, help drive home the fact that this disruption — marked by demographic changes, the nation- wide conversation about the value of a college education, free community college, and other issues — is not an AIC problem. It’s a problem for the entire sector. Indeed, noted institutions such as Brandeis University in Waltham, Lesley University in Cambridge, and countless others have embarked on their own cost-cutting programs and revisions to their business plans.
Most colleges and universities in this region remain on very solid ground and, like the region’s hospitals, remain sources of pride — and good-paying jobs.
But these recent headlines reflect the fact that these are, indeed, very challenging times, during which we hope these insti- tutions can and will make the hard decisions and the needed adjustments to remain vital cogs in the region’s economy for decades to come. BW
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Is Tide Turning on Remote Work?
It was an announcement that reverberated through workplaces across the country — and in cities large and small as well.
In September, Amazon President and CEO Andy Jassy
informed tens of thousands of workers that they will be back in the office five days a week come January.
In the ongoing discussion about remote work and the future of work, this is a huge development. Indeed, it is seen by many as an important milestone in this debate, a moment in time when the pendulum started shifting back to the way things were before everyone packed up to go home in March 2020.
But while Amazon’s move will be closely watched and undoubtedly emulated by other employers, we’re not sure if busi- nesses large and small will ever be able to get the toothpaste back in the tube and get everyone back in the office. Remote work has in many ways become a perk, a recruiting tool, a way to keep employees, especially the younger generations, content.
So much so, in fact, that employees that follow Amazon’s lead may be putting themselves at risk when it comes to attracting and retaining talent.
Getting back to Amazon’s statement decision, this is the one that office-building owners, mayors, and economic-development leaders had been waiting for. Those in the real-estate sector have been saying for years now that companies large and small would eventually decide that the improved collaboration and commu- nication, as well as the learning opportunities that come when everyone is together as opposed to on Zoom, would outweigh any benefits that might come from remote work and hybrid schedules. Amazon’s move gives some credence to those arguments and the
hope that the struggling office market will improve.
Meanwhile, municipal leaders who had been decrying the loss
of foot traffic during the week due to remote work saw the Ama- zon decision as progress in their mostly unsuccessful efforts to get people back in downtown office buildings.
And Amazon’s decision comes amid mounting evidence of a changing mood when it comes to remote work. A recent survey by the consulting firm KPMG revealed that 79% of U.S. chief executives plan to resume largely in-office work within the next three years, up from 62% a year ago.
That statistic comes amid growing sentiment that the balance of power is shifting in the workplace from employees — who had firm control during the prolonged workforce crisis that gripped every sector of the economy — to employers, many of whom have been eager to bring employees back to the office.
Despite this shift, and Amazon’s landmark decision, we believe that it will remain challenging for employers to bring their work- ers back five days a week. Remote work has become a fixture,
if you will, at many local businesses, from banks to law firms to health-insurance companies.
If there is a shift, it will likely be toward more days in the office — from two to three or even four. This will help build foot traffic in cities while also keeping businesses from shrinking their over- all office footprints.
Overall, the tide is probably turning, but until it turns more — and companies bringing people back to the office are not left at a competitive disadvantage — we see many businesses maintaining the status quo. BW
12 DECEMBER 9, 2024
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