Labor report: No silver bullet

January 6, 2016 -  By

For most landscape companies, hiring and retaining workers is their top growth challenge.

What one word would you use to describe your company’s No. 1 obstacle to growth in 2016?” People. Manpower. Help. Employees. Personnel. Workers.

No matter how respondents worded it, some form of the word “labor” was the top answer given to our open-ended Industry Pulse question about challenges heading into next year. More than 40 percent of respondents gave some variation of this answer. No other response came close.

It’s no surprise, with the federal unemployment rate at 5 percent in October. It’s the lowest level since April 2008 and half the peak of 10 percent during the Great Recession.

“As the economy improves, our labor force gets tougher to find,” says Tom Hougnon, president and CEO of Reliable Property Services. The company, which is based in Minnesota and has operations in Iowa and Wisconsin, competes for workers with the rebounding construction industry, the booming oil fields of North Dakota and new warehouses.

“All of the sudden the Amazon warehouses are popping up, and that’s 1,500 people making $12-$18 per hour,” he says. “Those are (similar to) our people, and they’re able to work inside 12 months of the year.”

Reliable, which does about $32 million in annual revenue, plans for 12-15 percent growth per year. At that level, it has to add six crews per year for the landscape side of its business.

“Where are we going to find those six crews?” he says. “As the labor gets tighter, we may look at subcontracting some work to alleviate the pressure of finding more people.”

Other contractors also wonder where workers will come from and are seeking new strategies.

“It’s a challenge, and it’s never going to change,” says Chris Joyce, president of Joyce Landscaping in Marstons Mills, Mass. The state has an unemployment rate just below the national level.

Joyce Landscaping’s plan of attack is trying to get people from other industries. The result is a longer, costlier training process, but it’s worth it, Joyce says. The company has had some success recruiting from the hospitality industry, which often has undesirable hours for people with families. His toughest positions to fill are production managers and skilled design/build workers.

“My average mason is 55 years old, and it’s scary,” he says. “I’d rather get someone who has no experience with a good attitude and willingness to learn then someone who’s been in the industry for a long time and is bringing a bad attitude.”

In some regions, contractors find the labor situation is less competitive.

For Steve Biernacki at WaterQuest Landscaping in New Mexico, which has a 6.8 percent unemployment rate, the overall economy and demand for labor aren’t as strong as other parts of the country. He says his region is slower to get into and out of recessions.

wage report_ hourly

Graphic: Landscape Management

“We don’t have too much of a problem with the labor market,” he says, adding he benefits from operating in a year-round market. “It’s a pretty steady base for us, and we keep our employees a little longer than other companies do. We’re a family company, and we portray that to the employees.”

Pat Morstad, who operates in a second-home market in Minnesota’s lakes region, calls his region “fairly recession-proof.” Add to that his controlled, debt-free approach to growth, and he’s not sweating the labor issue.

“A lot of the guys I talk to in the industry have problems getting employees,” he says. “I feel blessed that we don’t have that issue.”

His company is about 95 percent residential design/build and has a primarily Hispanic team. As the company has grown from one crew to three over the last year, he’s incentivized his employees to recruit others with a $100 initial bonus and another $300 if the hire makes it through the season.

Additionally, he says promoting from within has been a good strategy: “Our three foremen have all been people we’ve moved up, and we’ve just been extremely fortunate.”

H-2B update

Biernacki and Morstad are lucky not to worry about labor woes like many of their peers do. The landscape companies stressing the most, perhaps, are those who participated in the federal government’s ever-unstable H-2B guest-worker program this spring. Many workers came late or not at all in 2015, due to untimely agency and judicial actions.

The landscaping and groundskeeping industries are the largest users of the program.

wage report_ salary

Graphic: Landscape Management

“It’s really important to the industry,” says Andrew Ziehler, president of Ziehler Lawn & Tree Care near Dayton, Ohio. His company does not use the program, although it did at one time. “When all the big maintenance companies don’t get their H-2B workers, they’re pulling workers who could work for you. So just because you don’t use it, you have to make sure you’re advocating for positive changes to the program because it’s going to affect you in a roundabout way.”

With little prospect for a comprehensive immigration reform bill passing anytime soon, both the Senate and the House are considering H-2B fixes.

The SEASON Act, introduced in the House in November, provides expedited processing of H-2B applications and puts the program entirely in the hands of the Department of Homeland Security. The Department of Labor has no role in the H-2B program under the bill. It also exempts returning workers from counting against the 66,000 visa cap.

A similar bill, the Save Our Small and Seasonal Businesses Act of 2015, was introduced in the Senate in October.

The bills are slightly different, but both bills would take care of H-2B employers’ top concerns, said Tom Delaney, director of government affairs for the National Association of Landscape Professionals (NALP), in a legislative alert last month.

“Both bills would exempt returning workers from the 66,000 annual cap, streamline the H-2B process, provide for a fair wage formula, allow for the use of private wage surveys and address the problems stemming from the new H-2B regulations,” he says. The NALP encourages members and H-2B users to appeal to their senators and representatives to support the bills.

Whether your company uses H-2B or not, Ziehler notes the labor issue is going to be the determining factor in any company’s ability to grow. “We have to put the same effort into recruitment and hiring and employee engagement that we put into trying to sell a new customer,” he says. “I don’t think there’s going to be a silver bullet.”

photo: ©istock.com/pepo123

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About the Author:

Marisa Palmieri is an experienced Green Industry editor who's won numerous awards for her coverage of the landscape and golf course markets from the Turf & Ornamental Communicators Association (TOCA), the Press Club of Cleveland and the American Society of Business Publication Editors (ASBPE). In 2007, ASBPE named her a Young Leader. She graduated with a Bachelor of Science in Journalism, cum laude, from Ohio University’s Scripps School of Journalism.

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