Sales Insights November/December 2021

November 9th, 2021 by Nathan Hobbs

Crucial Moments: With No End In Sight, What Are You Doing About Labor Shortages?

By Dave Yoho

A recent study discloses the home improvement industry lost one million workers during the early months of the pandemic. Since that point, industry companies have yet to win back a fifth of the workers who left or were laid off during that period. Meanwhile, there is an estimated need to hire at least 500,000 workers to deal with current sales and backlogs for 2021.

Traditional methods for dealing with labor shortages—including things such as increasing installers’ pay or pay per unit, recruiting crews from competitors, and increased job postings—haven’t improved the size or efficiency of the average installation workforce.

More Sales More Backlog

Employers are getting desperate to find installation personnel to aid in reducing backlogs. As a result, many utilize hiring practices which may put them in violation of various government laws, such as OSHA, lead paint rules, or independent contractor status. Numerous studies indicate this current crisis will continue, and may even intensify in the first six months of 2022.

New Attitudes, New Methods

Several advanced and forward-thinking companies have created well-thought-out and workable solutions, which required major changes in their business plans and day-to-day operating procedures. Following are a few examples from our current clients.

“We created an identifiable new position for a person charged with the responsibility of recruiting and hiring (W2 or 1099) personnel for production installation. The job description for the new hire includes developing unique plans for contacting viable prospects through third party references, speeches at organized group meetings (Chamber of Commerce, VFW, Kiwanis and similar), and creating three-minute Zoom or similar videos to post or otherwise circulate,” one client says.

“The new hire’s role is defined by a contemporary job description,” another client explains. “They are recruited based on required skills, not only their hiring/training background. They are appraised for their ability to understand the need for modern, systematic telephone scripts, and challenge-oriented interviewing methods … The hiree is charged with quotas for interviews, those hired and maintained, plus the progress of their hires. They incorporate a training program that includes ongoing meetings with crews in the office and the field, and ongoing incentives to third parties or organizations which provide leads or prospects who are hired and retrained.”

We helped those recruiting 1099 personnel, and W2 employees create short- and long-term incentive devices, some of which are specifically designed to extend compensation by the use of “contingent benefit plans” and, where appropriate, aid new personnel in understanding and utilizing “SEP” IRA plans (and similar benefits).

The current crisis requires a deep investigation of critical business issues, while exploring solutions which fit the business model and the company’s territory. That’s the only way to deliver a plan of action that ensures fulfillment.

Dave Yoho is president of business consulting firm Dave Yoho Associates.dave@daveyoho.com

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