Discover more from The 21 Hats Morning Report
Finding Creative Solutions to the Labor Shortage
As the labor shortage persists, businesses keep coming up with solutions that might have been good ideas even without the shortage. (They’re also paying more.)
Here are today’s highlights:
It might be time to ask your employees to do less.
Driven by consumer demand, American manufacturing is booming.
The funeral business is thriving, too, but that’s more complicated.
And here’s how one of the last American piano manufacturers managed to survive.
Businesses are finding creative ways to cope with a labor shortage that won’t quit: “The challenges are prompting some entrepreneurs to seek more creative ways to fill labor shortages at a time they might have expected hiring to get easier. Lindsay Goodson, owner of Keith McDonald Plumbing in Milledgeville, Ga., hasn’t been able to find enough experienced plumbers. So she spent $700 to build a camera system that lets junior plumbers live stream their work while Ms. Goodson or another more-experienced plumber supervises from the office. ‘It will be a step-by-step, start-to-finish training from afar,’ said Ms. Goodson, who tried out the system for the first time in early September and said it would allow the 20-person business to take on more clients.”
“Nearly 60 percent of small companies report that worker shortages are affecting their ability to operate at full capacity, according to a September survey of more than 725 small business owners by Vistage Worldwide.”
“Southeast Constructors, in Des Moines, Iowa, is addressing the labor shortage by creating its own training school. The new academy, set to open early next year, will offer three months of instruction in construction basics such as how to hang drywall, paint and drive a Bobcat.”
“William Duff Jr., founder and managing principal of William Duff Architects in San Francisco, said the firm is getting more applications for junior-level jobs that require six to seven years of experience or less.”
“Senior architects are harder to find, he said. The 30-person firm, which struggled most of the year to fill job openings, handed out raises at the start of the year and again in the summer.” READ MORE
OPINION: Bosses should be asking employees to do less, not more: “‘More businesses die from indigestion than starvation.’ That’s what Hewlett-Packard co-founder David Packard warned in 1995 about the danger of company leaders who add too much to their workplaces and subtract too little. His words ring even more true now than they did 27 years ago, with too many leaders programmed and rewarded for more, more, more. It isn’t that addition is inherently bad. But when leaders are undisciplined about piling on staff, gizmos, software, meetings, rules, training and management fads, organizations become too complicated, their people get overwhelmed and exhausted, and their resources are spread so thin that all their work suffers.”
“The idea is that by eliminating things that are unnecessarily burdensome, such as filling out expense reports, meetings that are too long, and all that other stuff that saps too much time and emotional energy, it leaves more time and will to do things that are time-consuming and frustrating—the stuff that innovation emerges from.”
“Mr. Bock says, he came up with a simple rule: If more than four interviews were to be conducted with a candidate, a request for an exception had to be approved by him. Most Google employees were hesitant to ask a senior vice president for an exception, so the gauntlet disappeared for most job candidates.”
“Here’s another simple subtraction rule for bosses: If your organization has more than four core values, trim the list—and use words and phrases that elicit images to describe each value.”
“If you run a nonprofit, for example, avoid hollow language such as ‘excellence in fundraising.’ Instead, describe donors who feel their gifts are “among the best decisions they have ever made.’” READ MORE
American manufacturing is booming, with companies more than recovering the jobs lost during the pandemic: “The engines in this recovery include pharmaceutical plants, craft breweries and ice-cream makers. The newly created jobs are more likely to be located in the Mountain West and the Southeast than in the classic industrial strongholds of the Great Lakes. American manufacturers cut roughly 1.36 million jobs from February to April of 2020, as Covid-19 shut down much of the economy. As of August this year, manufacturers had added back about 1.43 million jobs, a net gain of 67,000 workers above pre-pandemic levels.”
“Delayed deliveries, sky-high shipping prices and other supply chain issues during the pandemic have encouraged some chief executives to think about moving production closer to home.”
“The average price to ship a 40-foot container internationally has fallen sharply in recent months, but it is still three times higher than it was before the pandemic, according to tracking by the freight booking platform Freightos.”
“The Biden administration is hopeful that new policies — including a manufacturing competitiveness law and a climate law the president signed this summer — will encourage more companies to leave China for the United States, particularly cutting-edge industries like clean energy and advanced computing.”
“Brian Deese, the director of the National Economic Council, said in an interview that the laws were already changing the calculus for investment and job creation in the United States.” READ MORE
Four of five small businesses say they can handle a recession: “Small business owners nearly doubled their revenues between July 2021 and July 2022, according to a new report from Kabbage, the small business lender owned by American Express. However, while revenues grew by 87 percent over that time, small businesses’ profits were almost stagnant during that period, actually dropping by 4 percent. The reason: Higher cost of goods and a competitive labor market that favors workers have forced small businesses to increase spending to remain competitive, eating into any profits they might have enjoyed from the large overall jump in revenue.”
“In June, 83 percent of respondents to a previous Kabbage survey said they are concerned about a potential recession, but 80 percent also said they are confident that their businesses can withstand such a downturn.”
“Part of the reason for their optimism: the pandemic. Nearly one-third of respondents said that weathering the pandemic had given them a stronger sense of resilience to feel prepared to survive any major slump in the economy.” READ MORE
Apartment rents are falling from record highs for the first time in two years: “August apartment asking rents nationally fell 0.1 percent from July, according to a report from property data company CoStar Group. It was the first monthly decline in rent since December 2020, the company said. Other surveys also showed rent declines of various degrees. Apartment-listing website Rent.com showed a 2.8 percent decrease in rent for one-bedroom apartments during the same month. A third measure, by the listings website Realtor.com, also noted a slight monthly decline in rent this August.”
“Last month’s rent declines are modest compared with the 23 percent overall increase in rent since August 2020, according to Realtor.com, and there is no guarantee that rents won’t move up again.”
“As more households feel priced out of the sales market because of rising mortgage rates and near-record sales prices, overall demand for rentals is unlikely to fall drastically, said Orphe Divounguy, an economist at Zillow Group.” READ MORE
Thanks to Covid, funeral businesses are thriving, but the profits have exacted a price: “Covid-19 has killed more than one million people in the U.S. As new Covid-19 cases drop, hundreds of people continue to die of the disease each day. The toll has generated a surge in business for funeral homes, along with challenges that morticians said prompted the industry to become more nimble and responsive. Many funeral directors added services including virtual events and outdoor gatherings. Others struggled to retain burned-out or traumatized staff.”
“Some 40 percent of the association’s 20,000 members reported higher profits last year as a result of the pandemic, the association said, and every member reported serving a family whose loved one had died of Covid-19.”
“Brian Myers spent many nights during the pandemic embalming one person after another—some of them close friends—until morning dawned.”
“Extra revenue during the Covid-19 public-health crisis gave him the means in 2021 to buy a funeral home that included a crematory that had been closed since 2014. ... ‘I’d been thinking about getting my own cremation unit,’ Mr. Myers said. ‘When Covid happened, I knew I definitely had to get one now.’”
“His business, Myers Mortuary & Cremation Services in Columbia, S.C., was booming. Yet Mr. Myers, 45, said the additional work was marked by stretches of exhaustion and sorrow. ‘I definitely had mixed feelings,’ Mr. Myers said.” READ MORE
Gene Marks says you should monitor your remote employees—not for productivity but for security: “If you’re running a small business, you need to employ an IT firm to keep a close eye on each of your remote employees. That firm needs to make sure that your remote workers (and you) are running the most recent operating systems, have downloaded the most recent security software, are safely configured on their home networks and are using (and regularly changing) complex passwords.”
“So here’s my advice: don’t worry if your employee is working on that project plan or buying shoes on Zappos.”
“Instead, worry that your employee is doing something that’s going to cause a serious security problem at your firm. For this reason and this reason only, you need to monitor them.” READ MORE
Here’s how one of America’s last piano makers survived: “In 1996, an entrepreneur named Kirk Burgett saw an opportunity to revive one of the U.S.’s last piano manufacturers. A decade earlier, Burgett and his brother had invented PianoDisc, a device that enables a piano to play itself for guests. The company grew rapidly and sold 120,000 units to customers including Nancy Pelosi, Bill Gates, and pro sports stars. Burgett caught wind that Mason & Hamlin, one of the preeminent piano manufacturers of the golden age, was up for purchase in bankruptcy court. ‘We just decided to take a risk and save it,’ Burgett told The Hustle.”
“It took him and his team an entire year to produce the first piano, and the company’s first employees went through a two-year training process to build a product up to the standards of 19th- and 20th-century craftsmanship.”
“Today, Mason & Hamlin is one of just two remaining piano manufacturers in the U.S. The other is Steinway. While Steinway enjoys a more prominent brand and a larger market share, Mason & Hamlin is boutique, producing around 2.5 pianos per week.”
“Though the production process is now more efficient, it still takes the company up to 9 months to build a concert grand piano, which retails for $175,000.”
“The company is back-ordered for six months, with robust demand from schools, churches, musicians, and wealthy professionals. During Covid, interest in pianos increased significantly, with acoustic piano sales seeing a 46 percent boost in sales volume in the 2020 fiscal year.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
The (Commercial) Rent Is Too Damn High: This week, Gene Marks talks about what business owners can do to protect themselves in the current environment of rising rents and increased volatility. Plus: What explains the recent boom in startups? And will it last? And what do the Fed’s rate hikes mean for businesses? Also: you can’t just set your website and forget it.
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Thanks for reading, everyone. — Loren