2017 State of the Industry Report: Labor pains

State of the Industry Report - 2017 SOI

Finding and keeping labor continues to be a problem, but that fact hasn’t stopped some contractors from searching for the best workers.

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October 10, 2017
Lauren Rathmell
© Matt Collins

Mark Leahy and his brother, Brad, had to come to terms with the fact that they just weren’t good at hiring people. Their company, Blades of Green, didn’t use H-2B and they couldn’t seem to get anyone in the door who would stick around. After looking at the numbers and realizing their retention rate was 35 percent, the Leahy’s decided it was time to act.

So, they visited other companies that weren’t having those labor issues, and they hired people to improve an area where they were weak. In the Leahy’s case, it was forming a human resources staff, who possessed the skills to help bring in workers. Blades of Green needed employees who were willing to work with a growing business, as the company was experiencing annual growth rates of 25 percent.

The HR staff at Blades of Green is comprised of human resources manager, Angela Heironimus, and a part-time assistant. Together they developed a strategic protocol for potential employees.

Mark, president of the Edgewater, Maryland, business compares it to the way a company handles its sales program. They test their help wanted ads on job boards like Craigslist to find out what time of day will get the most results. They’ve set up an online application that helps them narrow down candidates before an interview and focus their job ads on company culture.

When Heironimus joined the company in 2015, the retention rate had already improved from 35 percent to 50 percent. But it continued to rise with her involvement, and in September of this year, the retention rate for employees was at 80 percent – hitting the Leahy’s long-term goal.

“When you’re running around trying to run your business, it’s hard to find the time for hiring,” Heironimus says.

The unique approach to hiring at Blades of Green begins with the job ad. If someone is searching a job site, a Blades of Green ad will say something like “Do you want a career?”

The ad then leads to a pre-screening questionnaire that will auto-reject an applicant based on the answers. Once the applicant fills out the entire form, the information will either be sent to Blades of Green, or essentially kick the person off the questionnaire site. Approximately 25 percent of the applicants are auto-rejected, and Heironimus looks at that as having saved 25 percent more time.

Blades of Green is now nearly fully-staffed with 67 employees, and 26 of them were hired just this year. The company credits that increase in part to widening its search from beyond the industry. For instance, someone with an HVAC background may be a good fit for pest control.

Heironimus says the company has also partnered with a program that helps veterans find jobs.

“Hiring vets is something we really try to do,” she says. “Right now, about 20 percent of our staff is made up of military veterans.”

H-2B woes.

Dave Peabody, president of Peabody Landscape in Columbus, Ohio, had to rely on a temporary staffing company to reach his full workforce of 150 employees.

“We applied for 50 H-2B workers before the cap increase,” he says. “When the cap was reached to meet the 65,000 visa maximum, we were completely shut out of the H-2B program in the spring.” In July, the U.S. Department of Homeland Security increased the number of H-2B worker visas allowed for the year.

The staffing company was not completely reliable, and workers weren’t staying on long. Peabody found it hard to find workers with valid driver’s licenses and solid background checks.

He expects the company to do $10 million in revenue this year, despite the labor issues.

With labor shortages, he says it’s been harder to compete with companies offering more money and companies that use informal ways to acquire their work force.

“This business is a profession,” he says. “And I don’t think a lot of people think that way. You have to run it like a business to get good results.”

Peabody Landscapes ended up getting 21 H-2B workers to finish out the season.

Different state, different problems.

Paul Wagner, president of FitTurf, which has two locations in near Denver and two near Detroit, noticed that different locations come with different problems when it comes to his work force.

The company, which specializes in turf fertilization, has about 60 employees. Wagner says the stability of his employees is better in the Michigan compared to his Denver locations.

“The economy is a little bit more robust (in Denver),” he says. “So, it’s hard to attract those workers.”

According to the latest numbers released in April, Denver’s unemployment rate is around 2.1 percent compared to Detroit’s 8.4 percent rate.

He says FitTurf is constantly hiring, but its core office staff remains stable. To keep a good retention rate, Wagner says that benefits are key. High competition for labor in the Michigan area prompted Wagner to extend incentives to his employees, like perfect attendance rewards.

“We try to pay more and offer more for our employees,” he says. “However, we know we can realistically only pay so much.”

Raising wages.

In order to compete with other businesses in the labor market, some companies have had to explore raising wages, which often means raising their prices.

Wagner says he has built relationships with his customers, so he knows how much he can raise prices without getting cancellations. “You get what you pay for,” he says. “My customers know the type of service they get and they are willing to pay for that.”

Wagner also pays slightly above the average wage for the area and includes a sales commission.

Drewe Schoenholtz, president of The Green Scene in New Jersey, says his newest employee started with the landscape design/build firm eight years ago.

The company doesn’t do maintenance, so his workers are skilled in areas like hardscaping and landscape installation.

Schoenholtz has been in the industry for 43 years, and credits the longevity of his employees to offering good incentives and benefits, like full health insurance.

“Because we don’t do mowing and trimming and all that, I need good skilled workers,” he says. He’s always paid his workers above the industry average, too.

The team recently celebrated a 30-year anniversary for one of its workers. “We’re kind of a big family,” he says.