BLOOMINGTON — With an eye toward attracting the best up-and-coming workers and creating environments to help them excel, State Farm has spent more than $33 million since 2015 on updating its corporate campuses along Veterans Parkway.
Four recently remodeled floors at State Farm's corporate headquarters represent the insurer's vision of a contemporary workplace. Open, airy floor plans offer work spaces with tables, individual pods and seating areas with couches and chairs intended to let employees collaborate in ways that work best for them.
"It's not just about creating an engaging work environment for employees that are here; it's about attracting and retaining employees as well," said David Gwarda, assistant vice president of administrative services, who gave The Pantagraph a tour of some of the revamped areas at corporate headquarters, also known as Corporate North, at 1 State Farm Plaza.
"We want to be able to get the best talent into the future, so having spaces like this certainly adds to that," he said.
State Farm has taken out $31 million in building permits in the past three years for Corporate North and $2.5 million worth over two years for Corporate South.
Improvements, both completed and ongoing, at Corporate North include upgrading the lighting for its 1-acre atrium, upgrading the 45-year-old building's cafeteria, restrooms, wiring, heating and air conditioning systems and replacing roofs and parking lots.
The company also plans renovations on 12 more floors throughout the 1.77 million-square-foot building's four wings, and similar work is underway at the 2.67 million-square-foot Corporate South building.
The remodeled work environments are intended to mirror those already in place at the company's regional hubs in Atlanta, Dallas and Phoenix, which the company began building in 2013, said Mary Schmidt, State Farm executive vice president and chief administrative officer.
"We have seen benefits of bringing our employees together in these more open environments," she said. "We've seen benefits of housing large groups of employees together in the hubs, especially leveraging a large scale of employees doing like tasks."
For example, the model enabled the company to quickly gear up to handle the large volume of claims calls related to hurricanes last year in Florida and Texas.
"When you've got 500 people sitting on one floor you can say, '250, you're going to take calls for Irma; 250, you're going to take calls for Harvey,'" said Schmidt.
The remodeling comes as the company pursues a companywide restructuring that includes consolidating its information technology departments. The company has not provided details on the number of IT jobs being eliminated.
"In today's competitive landscape State Farm is making significant changes to better serve our customers and to ensure our future for another 100 years," said Schmidt.
Management also was trimmed. The company has implemented a "top executive structure, and there have been about 15 retirements," said Schmidt. "That's all I'm going to say about that, but the executive structure will be flatter."
State Farm also is adjusting its "real estate footprint" across the country, including pulling out of the downtown Bloomington building that once served as the company's headquarters.
"Some of our buildings have unused capacity and, frankly every unused (space) has a cost," said Schmidt. "That's why you see these 11 offices that are going to be closed (in locations outside of Illinois over the next four years).
"We don't need those offices," she said. "We're going to be much efficient (due) to technology and the things that we've done."
Combined, there are 23,000 people employed at the hubs in Atlanta, Dallas and Phoenix, and that will grow to around 30,000 when the construction of the Park Center hub in Atlanta is completed in 2021 or 2022. State Farm says it will maintain its current Bloomington-Normal workforce of about 15,000.
State Farm has nearly 70,000 employees across the U.S.
"The concept that we're going to have in these hub locations we call a live-work-play environment," she said.
For example, The CityLine complex in Dallas has 26 restaurants, a medical facility, gyms, a grocery store, nail and hair salons, apartments and condominiums — "essentially everything a community needs to live, work and play," said Schmidt.
But State Farm does not own the hub properties.
Since last summer, State Farm has sold all three hub complexes to Transwestern Investment Group (TIG) as part of State Farm's earlier plan to sell and then lease back the spaces.
TIG acquired the five-building Phoenix regional hub, totaling 2 million square feet, in December for $928 million; the 500,000-square-foot first phase of the Atlanta campus in July for $275.4 million; and the 2.2 million-square-foot Dallas campus last fall for $825 million.
The Dallas and Phoenix sales set records in their regions, according to media reports.
"It gives us flexibility because the lease terms for all these buildings are ... staggered," said Schmidt. "It gives us flexibility because, honestly, who knows in 50 years what the world is going to look like."
The company does own its buildings in Bloomington, including the corporate campuses, the Illinois Operations Center on Ireland Grove Road, the Oakland Avenue building and the downtown building.
"More State Farm employees work here in Bloomington than any other location that we have in the United States, and we don't expect that to change," said Schmidt.
Investment and other income of $4.4 billion for the year — an increase of $400 million over the previous year — helped offset the underwriting loss to reduce the operating loss.
The State Farm group ended the year with a combined net worth of $87.6 billion — up from $82.7 billion at the end of 2015.