When the Labor Shortage MIGHT (Briefly!) End for Landscape Industry

Hey, everyone, it's Mike Andes and you're listening to the Business Bootcamp podcast. Today I'm going to be talking about when the labor shortage might end. If you're in the landscaping and lawn care industry, you know how hard it has been to find good people, let alone anybody, to do the work right now. So I'm going to talk about when that might potentially end and what you need to do in order to get ready for that time and what you should be doing in the meantime. Before we get into the show, though, a big thank you to today's sponsor, which is Gusto. If you haven't Already, go to gusto.combootcamp and you can get a free 90 day trial of their software for all of your employees. They can clock in and out, run payroll from there for any state. It does all the back end quarterly reports and where your taxes need to go and all the rest of it. Check it out today. It's going to be simple, easy, great customer service. Gusto.com Boot Camp. All right, so I want to talk about contextually, some of the things that are happening in our economy that are going to affect what's happening with our businesses. I said at the very beginning of the year, I said this at the, our conference in January. I said this will be the worst year to be in the landscaping industry when it comes to hiring people. Absolutely the hardest year. And for 95% of us, that has been the case. So I have, I've not been surprised by it, but I've definitely been amazed by just how bad it has been to find and hire good people. Right now, the unemployment rate Is, is at 6.1%. It spiked last April in 2020 at like 15.1%, I believe. So we've, we've dramatically come back in terms of how much unemployed people are. Are, you know, how there are unemployed people. And that has been said, okay, our economy is coming back, et cetera, et cetera, et cetera. But last week we had our jobs report come out and I think this is extremely important. There was expected to be a million jobs added in the past month of April, and There was only 266,000 jobs added in the month of April. Now, for some people, what there, there's two different trains of thought here. One is, oh, well, there's not enough jobs being created. We need to keep the funding rolling. We need to provide for the people who are unemployment. We need to improve the pua, the Pandemic Unemployment Assistance Program, and give them more than $300,300 extra per week. That's one train of thought. The other train of thought I seem to kind of follow along a little bit more with, and that is we are creating such an incentive for people to stay at home that they are not going out and finding jobs. Because the thought right now that there are no jobs being created is ludicrous. You go to any service provider right now, any restaurant, like I just saw the other day where McDonald's was offering signing bonuses. At McDonald's, they. They are struggling to find people, the service industry, lawn care landscaper, we're struggling to find good people. There is such a demand for labor right now because as our economy takes off due to the fact that there's so much money in the system and people are wanting to spend it at retail, trying to improve their lawn, their landscaping, et cetera, and yet there's just no laborers that want to come work because we've created a perverse incent by saying, hey, if you stay home, you're going to get extra $300 per week on top of your state unemployment. And so those are the kind of the two trains of thought, in my opinion. My opinion there is been such a massive amount of money given to people who stay at home. Why would I go work for someone and make, say, seven or $800 a week if I can stay at home, make five or $600 per week staying at home, doing nothing while I go and work in the blazing heat, why would I even show up at all? And honestly, from an economical standpoint, they're right. Like, sometimes it makes more sense, especially in lower cost of living states, it makes more sense to stay at home than it is to drive, go to work, etc. And so this is the question that so many landscapers have, is like, when is going to end? What should I be doing in the meantime? So that's all I want to answer right now. It's going to be a quick video. Number one, when is it going to end? I think this is going to start changing in August to September this year. Now, is it going to become better, great? No, it's going to still remain difficult, I think, for the next few years to find good employees. It's going to be very difficult in the landscaping industry. But what I think is going to happen because starting because of the Family Cares act or because of the Family first act that was just passed, the $1.9 trillion economic stimulus bill, whatever, because of that, now the PUA, the Pandemic Unemployment Assistance program, has been extended to September 6th of 2021. What I feel is going to happen is there's going to be millions of people that are, end of August are going to start thinking about them needing to go find a job. And there is going to be a kind of musical chairs. When the music stops, everyone's found, you know, everyone is caught trying to find a chair. Thomas, one of her franchisees, made this analogy and I thought it was perfect. I think that's going to happen to some extent at the end of August and the beginning of September when people are finding out that, hey, like this gravy train doesn't last forever, $300 is ending and I need to go find a job and there's gonna be a lot of people needing work. And I feel like there's plenty of, of jobs waiting for that to happen. But until then, what do you do? Because I don't think that's gonna be the problem solver long term. I still feel like next spring we're still gonna have tough time finding people. However, I do feel like what we're going through right now, the acute of what we're going through, like we're now spending thousands of dollars on ads for employees and no one applying. Having people apply and then they're not showing up because they're literally just trying to check off the box on the unemployment form every week that says that they were applying for jobs. Like, I feel like it's going to not be as bad come end of August, early September. I'm banking on that. Unless. Unless our gut, our government somehow thinks that they need to continue this program, which I feel is damaging small businesses more than ever before. Big, big businesses, not so much. Because if you're a tech worker and you're paying someone $150,000, $200,000 a year, $300 a week, doesn't do anything for them. It's hurting the small businesses and it's hurting frontline employees. And anyways, we won't go into that. What I want to talk about is what do you do now when it's so difficult to find people? You don't have any, you can't find any good employees, no one's applying, you can't get anyone on board. Or what do you do? Now? This is my recommendation would be be as efficient as you possibly can be. Try to make as much money as you can. Don't spend money on marketing, don't spend money on advertising. If you're four, six, eight weeks booked out and you can't find any employees to do the work. Right now, you want to buckle down, raise your prices dramatically. I don't care if right now you're charging 6, 50, $60 an hour, charge 80, 90 or $100 per hour and stick with what core group of workers you do have. Or maybe if, even if you're solo, charge a massive amount of money and make profit, bank that money knowing that, hey, this is not a long term solution. I want to grow my business. I want to get it to the point where it has systems in place where I don't need to be there every single day. But in the midterm, in the next few months, until the end of August, beginning of September, when I feel like there's going to be like a two to three week window of shuffling of chairs when the music stops, let's knock on wood, this ends, I really do feel like there's going to be an opportunity to hire people. So what do you need to do now? Number one, be as efficient as possible, raise your prices and become ultra profitable. And yes, it's not ideal that we're not growing our business. I understand that it's not ideal that we only close 20, 30 or 40% of our estimates when we're used to closing 70 or 80% of our estimates. But raise your prices, bank money, put it aside because we're going to need it come end of August, September when we want to hire people. And that's number two, get ready to hire people. Whether it's go get more trucks, get, you know, get your existing employees, if you have any trained up and ready to roll so they're ready to train the next group of people that come in. End of August, get ready for a bulk hiring event. All right, this is something we usually do in the spring and when we hire a bunch of people. But I, I feel like there's going to be that window of time when people are looking for work and we could potentially go out and hire 3, 4, 5, 6, 7, 10 people, regardless, depending on how big your business is, I feel there's going to be people looking. And so get ready for that event. Don't rush it, don't feel like, oh, I gotta find people now. I'm gonna spend a ton of money on ads on Indeed and Facebook and all the rest of it. Like, trust me, I would love for that. That's the ideal scenario. And it kills me when there's phones ringing off the hook and you can't, you just can't do the work. So instead of trying to fight the system and spend all of our money on just ads for hiring when there's no one responding. Let's buckle down, Raise prices. Raise your. Your what? Your, your markup of material is. Raise the cost of your, your estimate fees, your dump fees. Raise all of that to where you're making. Literally instead of 20, 30% profit, making 40 or 50% profit because you just raise your prices to a crazy amount, that's going to suppress the demand for your services. You're gonna have a lower close ratio, but you're gonna have a lot of profit coming in. Put that money aside and get ready for August and September when you can start hiring. All right, so number one is be ultra efficient. Make sure you're extremely profitable. Raise prices right now when you know you can't keep growing. Number two is get ready to hire in August and September. Now, I could be completely wrong if they improve, if they increase the longevity of this program, but I feel like there's gonna be a two week reprieve from the labor shortage and it's gonna come right back because we're gonna hire. And then there's so much work to be had right now in construction, in real estate, in landscaping, lawn care, retail, restaura industry coming back. Like, trust me, there's a massive, massive demand. But I do feel like there's gonna be about a two week reprieve from what we're seeing right now when people are looking for work. And you gotta get ready for that. Don't spend all your money on ads right now on indeed and Facebook and then not have anything left over when there's actually demand and people wanting to work for your business. That's my recommendation. It's counterintuitive to everything I've ever said, and that is always focus on growth, focus on getting new employees, training them up, always looking for new hires, getting creative. And we've done that. And now we're at the point where I really feel like we're late enough into the spring season. You need to buckle down on what you got in terms of employees and make that as ultra efficient as possible, ultra profitable as possible, and get ready for a hiring spree. End of August, early September. Is it going to solve everything? No. Is there going to be only a two week reprieve? In my opinion, yes. Get ready for it. It's going to be hot. It's going to be heavy. I, I sure hope so. I sure hope so. All right, guys, thank you so much for watching. I'm Mike Andes, Business Boot Camp podcast. We'll see you tomorrow.