Lower cost of living, business ‘key to solving labor shortage crisis’ » CBIA

Businesses remain resilient in the wake of the pandemic, although acute labor shortages, high costs and supply chain disruptions represent major challenges for Connecticut employers.

This was the takeaway from a group of business leaders discussing the CBIA/Markum 2022 Survey of Connecticut Businesses at the Connecticut Economy Conference in Hartford on September 23.

The discussion was moderated by Michael Bruder, managing partner of Markum LLP’s Hartford office, and included Derek Kohl, Vice President of BL Company, John Green, President and CEO of Lux Bond and Green, and Deb Gierty, Principal of Ritz, Inc. [pictured above, from left to right],

“This survey was full of remote workforce issues related to inflation, rising costs, labor shortages, and, yes, still COVID,” Bruder said.

‘Seeking Opportunities’

Gearty said that while his company was “affected by global supply chain issues and the slow rate of people returning to work,” they would be profitable overall for the year and were “going very strong in 2023.”

Green said that “the whole pandemic era was really strong” for his jewelery business.

While everyone was stuck inside during the pandemic, “people said they wanted to spend some money,” and they spent it on each other, he said.

“Our challenge, like many others, is that we don’t have enough staff to seize those opportunities.”

BL Companies Derek Kohli

“The start of 2022 also turned out to be very strong,” Green continued, “despite a lot of headwinds that we see.”

Cole said his outlook for the rest of 2022 and 2023 is “positive, but with some caution.”

“There’s work out there,” Kohl said, “and our challenge, like many others, is that we don’t have enough employees to seize those opportunities.

“We are going to proceed very carefully in the year ahead, but look for those opportunities and continue to recruit and attract this great talent.”

economic outlook

The survey shows that 68% of businesses made a profit in 2021, while 17% broke even and 15% experienced a loss – seven percent more than estimated in last year’s survey.

However, only 26% of businesses see Connecticut’s economy growing next year – down from 39% last year – with 36% forecasted steady conditions and 38% projected contraction, due to labor shortages, inflation and supply chain disruptions. reflects broader concerns.

Geerty told the audience, or more than 300 business leaders, that she could see the impact of global supply chain disruptions on the ground at construction sites.

“What we try to do is really look forward, be proactive, know what’s out there, and connect with people early on so that we understand their needs,” she said.

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He said that although local manufacturers did what they could to keep businesses supplying, the disruption in the supply chain was a “global issue”.

When asked how skyrocketing inflation affected their companies, three-quarters (75%) of businesses surveyed by CBIA and Markam said they raised prices to stay in business.

Only under two-thirds (64%) saw margin decline, while 23% under-invested in equipment and other capital assets, and 6% laid off employees.

navigating bottlenecks

Green emphasized how important it is to plan ahead and communicate to prepare for supply chain disruptions.

“Whatever used to take eight weeks now takes 16 weeks,” he said.

“So I think it’s all about planning, and if you don’t you’ll find yourself in a very bad place.”

“What used to take eight weeks now takes 16 weeks.”

John Green of Lux Bond and Green

Kohl’s has also seen construction customers affected by a lack of product availability.

“We really had to adapt, be creative, and source other materials that were alternatives,” he said.

“But delays and increased costs have had an impact, and it shortens the dominoes that would otherwise be kept for development and other expansions.”

business climate

This year’s survey showed that 50% of respondents believed the state’s business climate was deteriorating, according to the summer release of CNBC’s Top States in America Business Study, which found Connecticut. dropped 15 places to 39th place.

The survey shows that 68% of businesses made a profit in 2021, while 17% broke even and 15% experienced a loss – seven percent more than estimated in last year’s survey.

When asked what can be done to improve Connecticut’s business environment, Kohl said his company has clients and projects in both the public and private sectors.

He said inconsistency in municipal and state review processes has created an “unknown environment for businesses” that has turned customers away.

Cole also called for greater focus on transport and infrastructure.

“Decades of underfunding have taken their toll,” he said.

Kohl’s praised the $5.4 billion in federal funding coming to the state as “making our communities great to live and play in” and “the revitalization of towns and downtowns.”

Green called the infrastructure funding “critical”, adding that even though some of Lux Bond and Green’s employees lived 10 miles from their workplaces, their one-way commute was an hour.

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“Investing in the future should be part of what we want our state to do,” he said.

Affordability

Gearty said that some communities in the state were easier to live in than others, and encouraged a strong sense of community.

“Attitude, the way you go about solving the problem and helping those entities come together and make things happen, matters,” he said.

The CNBC study ranked Connecticut the eighth most expensive state to live in, with a third of employers also telling the CBIA/Markum survey that affordability was the biggest concern for employees and their families.

Twenty percent said higher taxes were the main concern for employees, followed by healthcare (18%), the economy (17%), education (6%), and transportation (5%).

Nearly nine out of 10 business leaders (89%) surveyed said the cost of doing business in Connecticut is rising. CNBC ranked Connecticut the sixth most expensive state to trade.

changing workplace

Bruder noted that with the rise of remote working, companies that are not able to offer work virtually will have a more difficult time finding and retaining employees.

Greene — which, as a retailer, does not offer remote work — said it has put extra efforts into building a stronger employee culture.

“We have to treat our people and listen to them very differently than we were before.”

green

“It’s not just about the money, it’s also about the joy of waking hours when people are at work,” he said.

“It is very important for us to create a culture and then give them the experience of being at work, it is an enjoyable exercise.

“We really have to treat our people and listen to them very differently than we were before.”

remote work

Geerty could see the arguments for and against remote work.

On the one hand, she said that there was a huge difference in team dynamics when communicating via the video platform in person.

On the other hand, she said “the pandemic highlights the fact that some of these jobs can be done remotely and hybridised.”

“I see it as an opportunity. At the same time, it is a challenge, and it will always be changing.”

“The pandemic highlights the fact that some of these tasks can be done remotely.”

Deb Geerty of Ritz Inc.

Kohl said BL Companies have worked hard to create a company culture that is present both personally and remotely.

“We don’t want a transactional relationship,” he said.

“We seek solid, established relationships not only with our internal employees, but also with our customers.

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“We’re trying to be more proactive in maintaining and growing those relationships.”

shortage of workforce

The conversation shifted to the most important issue facing Connecticut businesses: attracting and retaining employees.

Eight-five percent of employers surveyed this year reported that it was difficult to attract and retain employees, while 39% cited a lack of skilled applicants as the biggest impediment to growth.

Kohl said there was a “limited resource pool,” and with the state’s small size, “there’s a lot of competition here.”

Instead of looking for current employees, Kohl’s is “investing in the future” by hiring interns at the high school.

“We won’t see that return in investments until they graduate from college down the road,” he said.

“More money, investment and support can certainly help us.”

Kohl also said that businesses need to prioritize what the new generation of workers want.

Instead of focusing on healthcare and retirement, young workers worry about renting, finding a car and finding housing, he said.

“Trying to find the right mix of a compensation and benefits package that speaks to everyone has been really important to us,” he said.

Why Connecticut,

Brooder asked Geerty, Greene, and Kohl’s why they chose to do business in Connecticut.

Green called Connecticut “a great place to work, play, and raise your family.”

He also said that as hard as the workforce crunch is, he has few employees who are young and have been with his company for more than a decade.

“When you find good people, you really have to figure out how to keep them, and when you can, it’s finding the next generation to work for us, that’s the biggest thing for us.” It’s been a challenge.”

Gearty said that lifestyle in Connecticut is what keeps him in the state.

“We have a really nice place to live and work here,” she said.

“The workforce we have here is really incredible,” Kohl said.

“Highly educated, extremely hardworking, creative, I would say some of the best in the nation.

“I think we should be really proud of how big a labor force we have, we just need to expand that.”

policy resolution

Gearty also touted the recommendations of the CBIA’s TransformCity policy, which the survey results helped inform as a great package of solutions to make Connecticut more attractive to residents and employers.

CBIA President and CEO Chris DePentima previously told conference attendees that addressing the labor shortage crisis requires a long-term, sustainable solution “that made Connecticut more affordable for residents and employers and more affordable for all.” open opportunity.”

Nearly a quarter of businesses surveyed by CBIA and Markam said tax relief should be a top priority for the state’s next governor and general assembly.

Seventeen percent cited more business-friendly policies, followed by the economy (13%), government reform/regulatory relief (13%), state spending cuts (9%), and higher cost of living and doing business (8%). addressed to.

“We don’t do a good enough job to talk about how good life is, how great it is to raise a family here, and how much we all love living in the state of Connecticut,” he said. Told.

“Yes, we have higher taxes and such, but we need to do better job marketing.”

Geerty agreed, saying, “We are all here”. [today] Because we want to do something about business here in Connecticut.”

“Talking about it and making sure we can celebrate some positive things makes a difference,” she said.