Somebody’s Hiring All of These People
In the latest 21 Hats Podcast episode, Jay Goltz cautions against hiring too quickly right now.
Good morning!
Here are today’s highlights:
The economic sanctions are hitting business owners in Russia.
Pickleball, virtual golf, craft beer: how malls are trying to bring back shoppers.
Hourly employees are changing jobs because they can’t get enough hours.
Do you know what the starting salary is for big firm lawyers?
THE 21 HATS PODCAST
Somebody’s Hiring All of These People: This week, Jay Goltz tells Liz Picarazzi and Laura Zander that he’s had a revelation about The Great Resignation. Yes, he’s lost some people, but not necessarily his best people. “It shook the tree out,” he says, which is why he thinks businesses should be careful right now about hiring too quickly. Meanwhile, Liz talks about her latest product, a bear-proof trash enclosure, and why introducing it has been challenging. And Laura tells us what happened with the salesman she tried to send around the country in a souped-up van. Plus: Is this a great time or a terrible time to be in business?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
THE RUSSIAN INVASION
Tech companies are chartering buses and planes to try to protect Ukrainian staffers: “Tymofii Vlasov, a 33-year-old software engineer, faced a 12-hour drive along winding back roads to avoid a highway blocked with fellow refugees as he fled from the Russian military’s advance on his home Kyiv. Vlasov is just one of the thousands of Ukrainians who help keep the lights on for international tech companies but have now been forced to flee their homes. Amazon, Lyft, Snap have all turned to Ukraine in recent years to hire engineers such as Vlasov, who tests and debugs code for San Mateo, California-based marketing Totango. But the war has upended that, and now many tech companies are chartering buses and planes to get their staff to safety.”
“Israeli website builder Wix had offered its 900 Ukrainian staff, along with their families, temporary relocation to Turkey earlier this month as tensions mounted.”
“About 600 members of the Wix staff were left in Ukraine when Russian forces invaded on February 24. ‘Employees have been moving west with buses we chartered in advance or driving their own cars westwards towards Lviv, and the Polish border,’ says Nir Zohar, President & COO of Wix.
“Zohar says Wix had a team at the Polish border waiting to meet staff before relocating them to Krakow, Poland.” READ MORE
The sanctions are hitting Russian business owners: “Several owners of mid-sized companies said that the invasion and subsequent isolation of Russia had made their businesses unprofitable overnight. One, the owner of an advertising services company with 100 employees, said that he was about to announce to his employees this afternoon that he is leaving the country for Armenia with his wife and two sons. ‘I’m going to tell them that we are going into a crisis that we have never experienced before,’ he said. ‘It’s like flying on a plane with no engines or the engines are on fire.’”
“His company, which handles contracts for international brands like Pepsi and automakers like Volkswagen, was booming as recently as January, a record month for them.”
“Now many of those brands were pulling out of the Russian market and his business was shrinking ‘immensely.’” READ MORE
From a Ukrainian entrepreneur:
THE ECONOMY
Economists say the U.S. is well positioned to withstand the economic shock from Ukraine: “‘It looks like the U.S. has gotten through the Omicron variant and weathered that storm and the economy is growing solidly,’ said Mickey Levy, chief U.S. economist at Berenberg Capital Markets LLC, the securities arm of a German bank.”
“OpenTable, the online restaurant reservation business, reports that U.S. restaurant seating broke 6 percent above pre-pandemic levels in February after slumping earlier this year.”
“STR LLC, a research firm that tracks hotel trends, said occupancy at U.S. lodgings hit 59 percent in mid-February, up from 50 percent early in the month and 45 percent during the same period a year earlier.”
“Meantime, the Transportation Security Administration said airport checkpoint counts hit 2.15 million in late February, compared with 1.54 million at the end of January and 1.19 million at the same time a year earlier.” READ MORE
MARKETING
Amazon plans to sell digital ads inside its physical stores: “According to a project management document viewed by Insider, Amazon plans to roll out digital signage ads in physical stores during the second quarter. Other ideas being discussed include personalized ads on the screens of its smart shopping cart, called the Dash Cart, and check-out kiosks, as well as smoke screen ads that show up on the front of glass refrigerator doors, according to the documents and a person familiar with the matter.”
“The company's push to sell ads in its physical stores can potentially help offset the high-cost concerns of running its growing network of brick-and-mortar stores.”
“Amazon pitches advertisers on troves of shopping data, and its move to in-store ads could help prove to advertisers that its ads directly impact sales.” READ MORE
RETAIL
Malls are trying to bring back shoppers by offering pickleball, virtual golf, and craft beer: “As Covid restrictions ease, expect to see more malls morph into family entertainment destinations where shopping may not even be what draws shoppers in. Retail analysts say it's become necessary for mall operators to diversify the in-mall experience beyond shopping in order to stay relevant to consumers—especially as the pandemic has made online shopping more popular than ever.”
“A Tanger Outlet in Hilton Head, South Carolina, has added XGolf: a three-in-one concept that includes a grill and sports bar, an indoor golf simulator experience and a golf pro shop.”
“And if you have an itch to learn about beekeeping, Tanger has you covered there, too, with honeybee colonies on the roofs of some of its locations.”
“That's through a partnership with Alvéole, a social beekeeping company that provides programs and habitats for the declining bee population in the U.S.” READ MORE
Business owners are confronting a wave of retail theft: “Someone shattered the front door overnight and ripped out the cash drawer. The new security gates cost $2,300. The streets became quieter after four neighboring businesses closed permanently during the pandemic, emboldening shoplifters. Two security guards quit. For Deborah Koenigsberger, who has worked in retail for three decades, keeping her two clothing stores open in Manhattan’s Flatiron neighborhood has never felt so exhausting. ‘As small businesses, we are getting creamed right now in so many ways,’ Ms. Koenigsberger said. ‘I might as well leave my store door open and say, Help yourselves.’”
“Her shops are among businesses in New York City grappling with a rise in crimes that has cascaded from the disruptions of the last two years.”
“The pandemic exacerbated job losses, mental illness and drug abuse, which law enforcement officials and business owners say has contributed to increasingly brazen behavior from people walking into neighborhood stores, from shoplifting to assaults.”
“The debate over the underlying causes has also focused on New York’s bail laws, on a police force distracted by a spike in shootings and on online marketplaces where organized retail crews can easily sell stolen goods.” READ MORE
ECOMMERCE
Walmart’s third-party fulfillment business grew 500 percent last year: “Last year, Walmart added about 20,000 new sellers to its U.S. marketplace. The retailer is trying to entice new sellers into using its service with incentives, namely free storage and a 10 percent discount on fulfillment for the first 90 days for those who sign up before May.”
“WFS is just one of a growing suite of supply chain and other services Walmart is offering to third parties. Last year, Walmart launched GoLocal, a white-label delivery service for other retailers.”
“Among its clients are Home Depot and Chico's, which tapped Walmart for same-day delivery for the apparel retailer's customers, as well as smaller retailers.”
“Many sellers using WFS experienced 50 percent sale growth for items. The executive also noted that the program had a 90 percent retention rate helped in part by Walmart's Preferred Carrier Program, launched last year and which saves sellers on inbound transportation costs.” READ MORE
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HUMAN RESOURCES
Faced with both higher turnover and inflation, businesses are emphasizing better perks: “Companies hope nice-to-have extras like more vacation can boost their reputation as good places to work and keep workers on board in today’s tight job market, even if salary gains don’t match inflation. Companies rarely adjust base salaries directly in response to economic data and instead benchmark their employees’ salaries and benefits against competitors. Boosting salaries for all employees can be expensive—and permanent.”
“Cosmetics company e.l.f. Beauty Inc. has also offered new perks, including offering meeting-free afternoons after 2 p.m. on Fridays, in part, so employees can have added flexibility with their personal lives.”
“Last year the company closed its offices all of Thanksgiving week. In previous years it closed for a half a day on the Wednesday before the holiday and the whole day on the Friday after.”
“The company plans to adopt a hybrid work model, asking employees to come into the office one to two days a week starting in March, and three days a week starting in April, with catered lunches on Thursdays in an effort to make the transition back to work easier.” READ MORE
Oddly enough, despite the labor shortage, some workers are quitting because they’re not getting enough hours: “For employers, it is difficult to know how many people to hire even in the best of times, and it is trickier than ever with today’s high turnover and unstable demand, said John Gulnac, vice president at Adecco USA, a large employment agency. As a consequence, he said, some companies are over-hiring by as much as 40 percent to give themselves a cushion, choosing to prune staff or hours once managers have a better sense of their true labor needs.”
“The turnover that results from over-hiring is itself a factor in the way companies hire. Fifty-five percent of employers are bringing people on more quickly than they did before 2020, and in larger hiring groups, according to data from HourWork, a software provider that helps employers recruit and retain workers.”
“For years many businesses that hire hourly workers have tried to keep their employees from working full time because then they don’t have to offer some benefits, such as healthcare, which saves them money.” READ MORE
The starting salary at big law firms has jumped again—to $215,000: “Philadelphia’s two largest law firms, Morgan Lewis & Bockius and Dechert, have matched the new national high-water mark for first-year associate salaries of $215,000. Morgan Lewis announced the change internally earlier this month and Dechert sent out a memo to associates this week. Above the Law was first to report both. New York’s Milbank set the stage on Jan. 20 by increasing its starting salaries from $205,000 to $215,000 and more than 40 big firms have followed suit. Commensurate raises were given to associates between their second and eighth years out of law school.”
“With the class of 2021 making $215,000, the class of 2014 are earning salaries between $360,000 and $396,500.”
“Last June, dozens of large U.S. law firms increased the industry's top starting salary mark from $190,000 to $205,000.” READ MORE
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren