Burdens to bear

Companies are contending with long-lasting issues like labor, plus new concerns and an uncertain economic future.

Illustration by Michael Crampton

Brian Paige

president, Paige Landscape Company, Walpole, Mass.

Brian Paige

This year has been a rebuilding year of sorts for Paige Landscape Company. As a commercial landscape and maintenance business, the company did not see the COVID-era boom in design/build work like others did. But now it looks like the company is back to its 2019 numbers and it’s still growing.

“2021 was a good bounce back year from 2020,” Paige says. “Like a lot of people, we took a big hit in 2020. We don’t do any residential work where people were working on their homes and doing outdoor projects. Most of our commercial clients kept the basics going on their maintenance contracts but weren’t spending a ton of money on extras.

“We were back to where we were in 2019 and now are expanding the business a little bit further,” he adds. “In 2022, we’re projected to grow slightly. Our top line number is growing; however, our margins are a lot tighter with all of the inflation costs.”

Paige says one of the biggest challenges he’s facing right now is more competition in an already tight market.

“There are a lot more companies in the area that used to be strictly residential and are now getting into the commercial market, which obviously gives more competition to us,” he says.

Though Paige adds he isn’t too worried about the competition as he feels the talent of his employees sets the company apart from the crowd. This year, the company has about 27 landscape employees and 56 snow employees on staff.

“To me, it comes down to our employees,” he says. “We all have the same trucks, trailers and mowers for the most part. So really it comes down to who are the people we’re bringing out to these properties to do the work?”

Recently, Paige says he’s been prioritizing training for all levels. This emphasis on learning includes a full training program for new hires plus weekly training events where various topics are reviewed.

And not only is Paige focused on training employees but retaining them, too. That’s why the company started an incentive program utilizing poker chips that employees can earn and cash in for a little bonus money.

“These chips have a denomination to them, mostly $5, and if a crew comes in on or below budget and there’s no issues then everyone on the crew earns a poker chip for the project,” he explains.

Higher-value chips worth $100-200 are also given out for employee referrals.

“If people get compliments from a customer, they can earn one that way, too,” Paige says. “Through training and plant identification practices, they can get poker chips as well.

“That program has made it fun for the guys and helps with retention,” he adds.

John Lane

owner, Castle Rock Sprinkler Service, Denver, Colo.

John Lane

John Lane feels like masking and social distancing have all gone by the wayside, but the fallout from COVID-19 is still lingering on the workforce.

“If I could have three or four more people who want to be technicians, I could’ve kept them all busy,” says Lane, who runs Castle Rock Sprinkler Service in Colorado. “But I just can’t find them.”

Lane believes COVID led to a workforce that’s not interested in working outside all day long. At one point, his company, which does mostly irrigation but some lawn maintenance, offered a $30-per-hour pay and a signing bonus but still couldn’t get his phone to ring. Others who do call will schedule an interview but refuse to show up.

“It’s unbelievable how people look at work,” Lane says, adding that even still, his company has nine employees and earns $1 million. “That’s going to be the lasting legacy of COVID is how it changed our society.”

Worst of all, he’s had people say they’re experienced who don’t have any experience at all. Lane says he’s combated this by offering $250 in cash to have them ride with him to a jobsite, which helps him feel good about an employee (or weed out those who won’t work out) quickly.

He took one employee out in the field with him who claimed to have lots of experience. Lane says he and the employee were manually opening valves and going through zones when all of the sudden, Lane heard swearing. The employee prospect had stepped inside a valve box and crushed something inside. At the end of the day – and after repairs to the system – the employee told Lane he didn’t want to accept the $250.

“I cost you more than I was worth,” Lane recalls the employee saying. But he told the man that he saw things he did like, too. He still paid him, even though he never heard from that prospect again.

“I’m not a guy to pile on,” Lane says. “Isn’t there enough piling on already? We’re building a business with respectful values.”

At this point, he also acknowledges that he can’t just find someone with a bunch of irrigation experience right out of the gate. He’s prepared to do some training. He’s just looking for people with mechanical ability and starting them out as helpers to travel with experienced technicians. Over the season, they could start earning more responsibility.

“At this point, the thought of finding an experienced technician — they’re just not out there,” Lane says. “Nobody in Denver woke up this morning and said they want to be a sprinkler guy.”

Ryan Jantz

general manager, Sorona Sprinkler, Surprise, Ariz.

While 2021 was a banner year for Sorona Sprinkler and the company made more money than ever before, Jantz says he would categorize 2022 as sporadic. The company reached $1.4 million in 2021 and only expects to do about $1.5 million this year.

“We’ve raised our rates 40% since COVID hit,” Jantz says. “We’ll put out four bids in a day and two people say they absolutely won’t do the job for the price we quoted but the other two people won’t even blink and say ‘put us on the schedule.’ It’s been kind of tough to find where the market is at. That’s been a challenge.”

Last year Jantz says people wouldn’t bat an eyelash at pricing but since earlier this year, they’ve had to be more strategic.

“The sky was the limit on pricing,” he says. “The work kept coming in and looks like you could price a job at $5,500 or $7,500 and it didn’t really matter. The close rate was right up there. And that rolled all the way into February 2022. Somewhere after that we peaked out and gently started falling. We haven’t fallen a lot, but it has definitely plateaued.”

Nowadays, Jantz says it’s the little added things he can do for a prospective client that makes them say yes.

“People are still willing to spend money, but you’ve got to bring more to the plate,” he adds. “You have to demonstrate more value or throw in more things for free just to get them over that close threshold.”

Jantz says to try and grow this year he’s made quite a few changes, one of the biggest ones being moving his technicians to commission-based pay.

“It’s been going really well. I put them on a 30% commission,” he notes, adding Sorona has a team of 12 employees. “Now when we get into our slow times, the technicians are thinking on their feet and coming to me with ideas like ‘Why don’t we put a coupon on our website?’ It’s really pushed them to where they have a desire to upsell. Before with upselling or things they could add-on at a project, there was very little motivation.”

Jantz has also begun investing more in online advertising.

“In 2022 we’ve had to rely heavily on Google Ads,” he says. “In 2021 we needed very little online marketing, but now to keep the men busy and calls coming in on a steady basis, I have to be pushing Google and Microsoft ads every week.”

Jantz even hired a third-party company to run his ad campaigns, so he can ensure he gets the most bang for his buck.

“Before I’d set a budget of $150 or however much a day and you’d get all this data at the end. I’m not a computer programmer to decipher who clicked on what and where the leads came from. But now it might cost me more per month, but they’ve been able to distill down to me where the traffic is coming from,” Jantz says. “They’ve been able to help me more understand what the data means and guide the campaign in the right direction. That’s been huge for us.”

2022 has been smooth sailing for Nature’s Link, and Anders says he feels like bright days are still ahead. At least for now.

Lester Anders

president & owner, Nature’s Link, Inc., Bloomington, Ind.

Lester Anders

“2021 was very good. We had about 35% growth,” he says. “This year I expect to beat that by another 20% or so. The last two years have been very good, but that being said, we are always cautiously optimistic.”

Anders says the best part of the last few years has been an increase in high-value work for the company.

“The sheer size of our commercial projects going on has been a highlight for us,” he says. “An average project five to 10 years ago was a lot smaller and around $30,000-$50,000. And now over the past couple of years, the projects are closer to $200,000-$300,000… and we had one recently for $1.2 million.”

While he hopes this trend will continue, Anders says he is concerned about rising interest rates.

“I’m afraid that once the rates go up that (it’s) going to start going in the other direction,” he says.

Anders recalls during the last housing crunch, professors in the college town he services were moving out of the city and there was a halt on major projects.

“When banks stopped loaning money, there was almost no new construction at all,” he says. “All commercial work was impacted. We had to change gears pretty quickly and do a whole lot of little projects. That was pretty rough, and that’s where my head goes as far as 2023.”

In the meantime, Anders says his biggest challenge, like most everyone’s, is labor.

“Most of my guys have been here 15, 18 or 20 years,” he says. “We treat them very well. We offer retirement, insurance, we keep drinks and snacks there for them. So, we’re lucky our core group has been here a long, long time. But trying to find those younger ones to come in and work is kind of a difficult thing.”

And with labor rates up substantially, Anders says it only makes it more difficult.

To compensate for having less staff, Anders says he’s been trying to have crews work smarter and not harder.

“We try to run as much equipment as we possibly can,” he says. “Machinery has been replacing a third guy on crews. Since my guys are also getting older and older, I’m trying to make things less physical for them.

“If the labor isn’t going to come here, you’ve got to be able to work more efficiently,” Anders adds.

Benjamin Bodnar

owner, Integrity Landscape Management; Stockbridge, Ga.

Benjamin Bodnar

Benjamin Bodnar believes the barrier of entry in the landscaping industry is incredibly high due to restrictive government policies on home-based businesses.

Several years ago, Bodnar – who is now doing all of his work as a one-man shop – had to terminate all of his employees. His municipality cited him for operating a business out of his home, urging that only employees who lived in the home could stay onboard at the company.

Now, he’s talked with several local businessowners at community events and his church. It’s become a situation where Bodnar – and he believes others – are stuck.

“If I’m going to take on more work, I need more employees to do that to get a commercial space,” he says. “It’s like Catch-22. You can’t get a commercial space unless you have the revenue to support it.”

Bodnar says in his research, he’s found that almost all businesses start as home-based companies. He doesn’t believe anyone can grow except companies that already have existing commercial spaces, making starting a business next to impossible.

He adds that he’s argued with policymakers on the subject and has attended city council meetings, but he says they’ve told him that they don’t want parked cars lining residential streets. Bodnar says he’s argued that his employees would go straight to the jobsite, but they’ve created a no-excuses mentality.

“There’s only so much one person can do,” Bodnar says, adding that he’s saving up to possibly leave the industry as a result of this. He had to cut 75% of his clients at the time. “Even if you have the tightest route with maintenance, supposedly a year with perfect weather, there’s only so much you can do with one person.”

Bodnar still operates with roughly 45 maintenance clients. He wakes up at 6 a.m. and basically works 12 hours. Then it’s lather, rinse, repeat the next day. And sure, there are other issues plaguing the industry, he says. He points out problems like pesticide shortages, specifically glyphosate, where he loses money on rising costs despite having locked-in client contracts.

But this issue with home-based businesses is huge, Bodnar believes. He says he had COVID last January, the silver lining of which is that they weren’t in season. But had he been sick in April as a one-man operation?

“It would’ve knocked me out,” Bodnar says, “and I would’ve been out of business.”

Kathy Wheaton

owner, Kathy’s Corner, Vashon Island, Wa.

Kathy Wheaton

Labor has become a total “monster” for Kathy Wheaton, who believes the cost of living has priced possible employees off her island.

Usually, Wheaton says she’s able to comfortably hire employees across the team’s three departments. Over half the work they do is landscape maintenance and design/build, but they’re also a retail garden center and grower. A lack of affordable housing has made it so they’ve struggled to just get three teams (her 14 employees and landscaping supervisor) out in the field.

“(Vashon Island) has become a rich man’s paradise, and that’s great, but at the same time, lots and lots of jobs and work are stymied because there’s nowhere for people to live,” Wheaton says.

Wheaton says people sold off some of their houses or turned their second houses into a summer home or Airbnb, which eliminated rental possibilities for low-income earners. Wheaton says rentals went from an average cost of $800 per month to somewhere between $2,500 and $3,000.

And for those not living on the island, commuting became a logistical nightmare. Those employees have to arrive by ferry boat – Wheaton says she’s always paid ferry fees for five of her employees. But those boats started eliminating departure times during COVID as they dealt with their own staffing shortages.

“I lost one guy who had been here for 15 years,” she says. “Those kind of things are painful because not only are you losing labor, but you’re losing skilled labor.”

Wheaton says she built a house with her husband and had seven children, plus hosted their mother in part of it. It’s set up for people to live in there, and four employees have for years, but “that’s just a drop in the bucket,” Wheaton says. Because not only is labor scarce, but business is booming. Her employees are all working seven days a week.

Wheaton herself says she’s only missed two days in the last three years, and both of those were for doctors appointments. Her field workers have one day off every fifth week and often work 12-hour shifts.

“You know how crazy our industry has been,” Wheaton says. “We’re doing a 300% increase in business with 50% of the staff we used to have.

“Everybody has stepped up and has given me 150%,” Wheaton adds. “Everybody knows that they’ve just got to do more with less time, and they have.”

Wheaton says her company’s been in business since 1971 and has seen hundreds of changes over the years, but this particular labor crisis is one she can’t figure out how to solve.

“We’re looking forward to December and January, so that we can work five days instead of seven for maybe a month. We don’t know what to do. It’s really a serious, serious problem,” Wheaton says. “I think, as an industry, our most serious problem is in fact labor. If we can’t find a way to solve the (labor) situation, I think we’re all in trouble.”

October 2022
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