Suburban bubble to urban bustle
McDonald’s employees report moving headquarters from Oak Brook to Fulton Market served up faster company, increase in applications
McDonald’s employees say HQ move to Fulton Market made the company faster and younger.
When Nubia Murray moved to Chicago from Manhattan three years ago to take a corporate job at McDonald’s in Oak Brook, she didn’t realize what a culture shock it would be to go “from subway fights to Pleasantville.”
The sprawling corporate campus, lush with fountains and greenery, was lovely but felt “stuck in time,” said the 35-year-old global marketing manager. Spread out over four buildings in an 88-acre suburban idyll, employees would often drive or take a shuttle to meet with colleagues from other business units.
The energy shift has been palpable since the fast-food giant moved its global headquarters to Chicago’s booming Fulton Market neighborhood in June 2018, putting it in the heart of the city’s restaurant scene and a stone’s throw from Google and other envelope-pushing companies, Murray said.
With all 2,000 employees under one roof, decisions happen faster, collaborating is easier, and, McDonald’s reports, a lot more people seem to want to work at the world’s largest burger chain.
Applications for corporate jobs have increased 20% since the move, totaling 250,000, and tech hires have doubled as the company invests in self-service kiosks, voice-ordering technology and mobile apps. The company has beefed up its campus recruiting and last year launched a two-year program to prepare recent college grads for technology roles; this summer it will debut its first formal technology internship.
“We have aged ourselves backwards,” Murray, who lives in the South Loop, said as she sat with several colleagues referred by the company to discuss life at the new headquarters. “We have been transformed into such a younger and faster-moving organization.”
McDonald’s is among a parade of suburban companies that over the past decade have moved their headquarters downtown or opened satellite city offices, mainly to attract and retain talent but also to freshen their brand image and keep closer tabs on what consumers want.
Employees have had to adjust to new commutes and dramatic changes in office space design — no cubicle walls, lots of social and meeting spaces, quiet rooms designated for focused work and, in the case of McDonald’s, no assigned desks.
But companies from McDonald’s to Beam Suntory to Conagra to Ferrara
Candy say, enthusiastically, that the investments have been worth it.
“It’s been so good for our culture and people,” said Paula Erickson, chief human resources officer at spirits maker Beam Suntory, which moved to the Merchandise Mart from Deerfield three years ago. “It breathes new life into our company.”
‘Right decision’
Corporate suburb-to-city moves slowed significantly last year, not because the city has become less popular but because many of the companies that would move have already done so, said Paul Reaumond, a vice chairman at real estate brokerage CBRE who specializes in directing corporate relocations
around Chicago.
The trend shows no sign of reversing, even as the millennials who inspired companies to move downtown now move to the suburbs to raise families, Reaumond said. Millennials still prefer to work in the city for the amenities, and ride-share companies have made it easier to commute, he said.
The expensive decision to move downtown always starts with a discussion about labor, as large employers compete with the likes of Google and Facebook not only for tech talent but also finance and marketing candidates, Reaumond said. While downtown rents can be double those in the suburbs, the cost is offset by hiring the right people and reducing turnover, he said.
About 8.5 million square feet of office space has been relocated from the Chicago suburbs to the city since 2007, including full headquarters and satellite offices. Reaumond expects most future city moves will be for satellite offices, which companies often use to target Chicago’s rich pool of marketing talent.
Over half of relocations went to River North and the West Loop, which is attractive because of its proximity to Metra stations used by suburban employees, he said. The West Loop’s Fulton Market district is emerging as the choice destination as developers churn out office buildings in the former meatpacking hub.
Companies that move to the city risk losing suburban employees inconvenienced by the commute, and have to assess whether “the gain is worth the pain,” said Steve Patscot, who leads the human resources practice for executive search firm Spencer Stuart. It takes a decade to see whether a move brings the benefits a company hopes to achieve, he said.
Conagra lost 10% of its 250 suburban employees when it closed its Naperville office as part of its headquarters move to Chicago from Omaha, Neb., and just a third of those in Nebraska who were offered to move did so, said Chief Human Resources Officer Charisse Brock. But the company, which has 550 employees on a single floor in the Merchandise Mart plus some 1,200 employees in Omaha, was able to fill 90% of its jobs in six months and has a more “vibrant” energy now. Colleagues connect more easily, decisions come faster, and it has been able to hire people with more diverse points of view, Brock said.
Oreo-maker Mondelez International, which in April plans to move its headquarters and 400 employees from Deerfield to Fulton Market, is offering a one-time relocation bonus to senior-level employees and will roll out a commuter benefits program to defray train and parking expenses, said spokesman Tom Armitage.
Ferrara Candy, which in November was one of the first tenants to move into the freshly renovated Old Post Office, was warned that it could lose up to a quarter of its workforce when it left Oakbrook Terrace, said Chief Human Resources Officer Mike Goldwasser. But few of its nearly 400 corporate employees jumped ship, and 2019 ended up having the lowest attrition since Goldwasser joined the company four years ago.
Ferrara offered several new benefits to help people adjust to the changes, including a commuter stipend, a cellphone stipend now that no one has a landline, and permission to work from home one day a week.
There have been jarring moments as some suburbanites jet out early to catch a train, and managers have had to trust that people are working even when they are hunkered out of sight in one of the building’s many loungelike nooks.
But “we intuitively know that this was the right decision for us,” Goldwasser said. “We think it is going to pay significant dividends in the years to come.”
The Old Post Office’s grand marble lobby and urban-industrial aesthetic offer a different vibe than the four floors the Lemonheads and Trolli maker had occupied in a traditional Oakbrook Terrace office tower since 2012. The building’s amenities include a 28,000-square-foot gym, which prominently features a boxing ring, and a chic bar with a bocce ball court, which Ferrara will share with incoming tenants including Deerfieldbased Walgreens, which is opening a satellite office there for 1,800 employees.
Ferrara’s office, which will exceed 110,000 square feet on a single floor once it’s fully developed, exudes contemporary sophistication rather than Candyland cheer. Collaborative spaces abound, including a bustling cafe with a Nespresso machine and free beer, wine, kombucha and cold brew on tap, where the hope is that spontaneous encounters between coworkers can stimulate new ideas.
Already, the quality and quantity of applicants has increased, Goldwasser said. It’s taking a week less to make hires now than it did when the company was in the suburbs, he said.
While the city location was important for appealing to job candidates who might not be willing to commute to the western suburbs — especially young city dwellers without cars — just as critical was designing an impressive space to reflect the candy-maker’s ambitions, Goldwasser said.
“We are one of the fastest-growing confections companies in the U.S., and we think we can challenge the biggest confection companies that are out there,” said Goldwasser, who hired 250 new corporate employees last year and expects to hire another 100 to 125 this year. “This shows our employees that we believe that we can. There’s a sense of self-confidence, a sense of optimism about the future that the space has helped to create.”
Changing office culture
McDonald’s move to Fulton Market, spearheaded by former CEO Steve Easterbrook, came as the chain set out to modernize its restaurants and embrace technology as it fights for convenience-hungry customers who have more plentiful dining options and a growing preference for fresher, healthier food. Easterbrook was fired in December for having a consensual relationship with an employee in violation of company policy and was succeeded by Chris Kempczinski, who had been president of McDonald’s USA.
McDonald’s 500,000square-foot complex, a $250 million project on the former site of Oprah Winfrey’s Harpo Studios, spans nine floors, including a top-floor gym and bar featuring Thursday night happy hours. A rooftop garden, with three beehives, produces teas and honey offered in the office cafes. There are four outdoor spaces, outfitted with WiFi, for working or socializing.
Two levels of parking below the building are open to anyone, but they’re barely used. McDonald’s operates a shuttle, conspicuously branded, from the Metra stations.
“We were very concerned about parking if a lot of suburban employees would want to drive, but we learned that people definitely prefer public transportation,” said Sheri Malec, senior director of workplace solutions for McDonald’s.
Though the company expected some attrition with the move, it said it did not see a spike in turnover that year.
The building, which McDonald’s rents from developer Sterling Bay, features various nods to the history of the 65-year-old company. An original neon
Speedee sign from an early restaurant greets people heading to the bar, and an old menu board advertising 10-cent fries decorates the two-story Work Cafe. A wall of hundreds of Happy Meal toys through the years is curated by McDonald’s archivist Mike Bullington, whose office full of memorabilia is also in the building so employees can drop by if they need to tap his vast knowledge of the brand.
But the company’s focus is toward the future, which it wanted reflected in the cutting-edge design of its office. Glass conference rooms can be reserved with digital control panels on the doors, and every room is video conference-enabled so remote workers can participate. Speakers pump out white noise to deaden the voices of loud phone talkers. The ceiling also contains noise-reducing materials made of recycled Coke bottles.
There are no assigned desks, aside from some exceptions for health reasons plus seven offices for executives — and that has drastically cut printing and paper usage because there’s nowhere to put it. Murray, the marketing manager, says the change has forced her to work faster, responding to requests in real time and producing concise bullet points rather than wordy documents.
“We have been on a journey to change our culture for the past five years to be more collaborative, nimble, agile, technology-focused, and certainly the move here has helped accelerate that, just by the physical workspace that people are in,” said Jez Langhorn, vice president of Global People at McDonald’s. “It supports being collaborative.”
The move also came with the introduction of flexible working hours, which emerged as an employee priority during focus groups.
The policy requires employees to be in the office during core hours of 9:30 a.m. to 3:30 p.m., but they can decide when to work the rest of their 7.5-hour workday to accommodate personal responsibilities like school pickups. Managers are also now required to let employees work from home one day a week.
At Beam Suntory, perks helped ease the transition. The spirits company relaxed its dress code and instituted a one-day-a-week remote work policy. It allows employees to expense Ubers and cabs if they worry about safety on public transportation or need to speed home for a sick child or other emergency.
Beam, which moved in part to be closer to the bars where mixology trends were taking shape, also gave Chicago employees an extra $250 in annual “ambassador dollars” to spend on its brands at bars and restaurants, on top of the $500 U.S. employees receive.
“We wanted employees to proactively be going out to bars in the city, to understand what consumers are ordering, understand what the trends are so we can be better at what we’re doing from a business perspective,” Erickson said.
Beam Suntory’s offices, which house 500 employees in 110,000 square feet on a single floor, have a “buzz” about them now, she said. The company lost just five employees as a result of the move, and has seen a 25% increase in applications, she said. That bigger applicant pool has helped reduce the time it takes to fill a position to 65 days from 85. The number of multicultural hires has tripled.
While talent was part of the motivation for the move, Beam said being downtown also has improved business. Since 2017, Beam Suntory’s bar and restaurant business has grown 40% faster in Chicago than its U.S. average, in part because of sponsorships of the Chicago Cubs and Bears and other community events in the city that feature its products, the company said. Sales teams also can better foster relationships with customers and get more menu placements, Erickson said.
For Tim Litterio, corporate finance manager at McDonald’s, escaping the company’s “suburban bubble” has given the company better insight into how and what people are eating. On Randolph Street, which is littered with restaurants, “you can see how fast-paced the consumer is” as people grab a pre-ordered lunch from a pick-up shelf and leave, he said.
“We didn’t see that in Oak Brook because we were hidden behind this great landscape of trees,” said Litterio, 27, who commutes on the train from Lisle.
A greater sense of community has spurred a renaissance for employee groups, which report increased participation and engagement. In August, they collaborated for their first joint volunteer day, sending employees to charity projects at 10 sites throughout the city.
Litterio, who heads the Young Professional Network at the company, said participation has doubled since the move, in part because of the new hires.
Litterio makes it a point to ask new hires if they would have applied for the job if it were in Oak Brook.
“It’s always the same answer,” he said. “No.”