The Past, Present and Future of Labor Shortages
By Dave Francis
Not many landscape contractors have been spared from the inconveniences that labor shortages cause. Finding reliable employees is tough, and this year is no exception, especially with the global pandemic. It’s a trying year for businesses in many industries, but there is light at the end of all this.
What early 2020 looked like
The first big hurdle 2020 presented was legislation passed by Congress to limit the number of H-2B visas. H-2B visas allow employers to hire foreign workers for a temporary amount of time. The cap is now 66,000 H-2B visa workers allowed into the country per calendar year, which is nearly half the number allowed previously. Larger contractors experienced major labor shortages since they relied on adding employees in order to get through their busy season. It’s easy to see how those companies were greatly affected.
Smaller contractors, on the other hand, started losing workers to other entry-level skilled labor jobs. It’s tough to compete with positions that pay just as much but are year-round or less physically demanding. Most small businesses can’t afford to pay a high hourly wage, leaving them scrambling for help.
These challenges show that 2020 was difficult prior to COVID-19, and, because of the pandemic, there are newfound hurdles. When the government began shutting down cities, many landscape contractors were also shut down. In some states, they were deemed “non-essential businesses” and, therefore, forced to put their scheduled work on hold. With no semblance of how long the shutdowns would last, they were simply left waiting for restrictions to lift.
The current situation
There is a new trend during this year’s busy season: some homeowners have been paring back on outsourced landscaping services. People are working to save money and cut expenses, which sometimes trickles down to their lawn and landscape needs. Mowing and edging is something they can do themselves, even if it’s not their strong suit. For certain landscaping companies with a largely residential portfolio, this trend has hit home.
Fortunately, there’s a positive trend emerging that may offset the negative. A subset of homeowners is actually looking to spend more rather than less. These are people whose jobs haven’t changed; either they’re still going into work, or they’re working from home. Spending an increased amount of time at home is leading many people to invest more time on home projects, both inside and out. Patio, deck and large landscaping projects are great opportunities, and may also drive the need for even more maintenance services in the long run.
How to move forward strategically
As you work to solve labor shortages, there are three strategies contractors have been very successful with. One may fit your business more than others. These ideas are a starting point from which you can begin building a great plan for your business.
1. Focus on current clients
The first strategy is to maintain the customers you have, and focus on them. Whether that means educating loyal customers on your entire service portfolio or initiating a conversation by proposing your vision for their home, be proactive with current clients instead of seeking out new partnerships. With the upward trend in home improvement, they may be apt to do more. Even if they say “no,” putting in the effort will only further build loyalty, trust and continued business with that particular client.
2. Assess your equipment
Make this a strategic move. Assess your current equipment, and consider investing in new equipment that improves speed and efficiency. If you’re not sure where to start, talk to your employees. They’re on the jobsite daily and they know the equipment in and out. It’s guaranteed they’ll be able to tell you what works well and what doesn’t. You probably have at least one mower that isn’t up to par with the others, or one brand of trimmer that outperforms the others. Even switching up one machine can make a difference.
3. Utilize new technology
It’s essential to adopt technology that provides information on managing your business better and driving additional profit. It can show you exactly where there are inefficiencies in your workflow and give you the tools to improve them. It also frees up business owners by automatically serving up data that help make informed decisions. With the right business management software, they can be more involved in the day-to-day management and building customer relationships, instead of spending time on invoicing.
Business management software can also help you understand the direct and indirect costs involved in a job. Finding and fixing inefficiencies in your pricing structure might even allow you to increase employee pay and attract labor from less efficient contractors since you can now offer employees more. Data really does drive productivity. When you know more, you can do more. Productive contractors can accomplish the same amount of work in less time and use less labor than nonproductive contractors.
Labor shortages will never diminish entirely, but the way you respond to them can change. It’s crucial to think proactively and look toward the future. Eventually, labor shortage will become less of a problem, but, in the meantime, you need to focus on bridging the gap. Try putting one or more of these strategies into practice — focusing on current clients, assessing your equipment, or utilizing new technology. They’ll help you increase efficiencies with the workers you already have and build a more positive company atmosphere.
Dave Francis is senior marketing manager at Toro.
Horizon360 is Toro’s business management software and an example of what you can gain from new technology. It uses GPS in conjunction with machine telematics to gain insight into the day-to-day business activities. It comes with tracking devices that are smaller than a wallet, battery-powered, can be installed on any piece of equipment, and allow you to see how much time your crew spends using one piece of equipment versus another and how much time they spend working while on a site.
