Discover more from The 21 Hats Morning Report
Starting Salary for Truck Drivers: $110,000
As the tight labor market gets even tighter, companies are trying everything.
Here are today’s highlights:
Your CRM system can help you cope with inflation.
In China, manufacturing is grinding to a halt.
How a TikTok video saved a struggling restaurant.
There’s more evidence that Opportunity Zones are not a “Marshall Plan for the heartlands.”
THE RUSSIAN INVASION
Andrey Liscovich left Silicon Valley to build a supply chain in Ukraine: “Liscovich, a 37-year-old entrepreneur and most recently the CEO of now-defunct staffing firm Uber Works, was inspired by Ukrainian president Volodymyr Zelensky's grave assessment of the situation during the early days of Russia's invasion of Ukraine. He thought, if Ukraine's president was willing to stay behind and defend the country despite numerous assassination attempts, he should do what he could to help too.”
“Now he's running a volunteer supply-chain team in his hometown of Zaporizhzhia, in southeastern Ukraine with former colleagues, procuring drones, cargo trucks, and other essentials for those defending their homeland.”
"‘It's an entrepreneurial problem,’ says Liscovich. ‘It's very similar to running a startup.’” READ MORE
Gene Marks says your CRM system can help you cope with inflation: “The biggest difference between running a business during this inflationary period and our last one in the early 1980’s is data. We have lots more data than the generation before us. That data is in our enterprise resource planning (ERP), accounting, and our CRM systems. And the smartest companies I know are leveraging new CRM tools so that, instead of upsetting their customers with blanket price increases made in the dark, they’re targeting these increases based on customer profitability, margins, and product lines.”
“Business intelligence tools offered by Microsoft, Sage and many other mainstream and industry-specific ERP and CRM vendors can also help their customers better analyze their pricing and margins so that they can more efficiently target price increases to certain customers—and avoid upsetting others.”
“Using your CRM system the right way means helping your customers know what’s coming so they can adjust their own plans. They know prices are going up. They read the same news you read. They’re raising prices for their customers. They — like you — just hate surprises.”
“As Tom Hagen said in The Godfather about his boss: ‘Mr. Corleone is a man who insists on hearing bad news immediately.’” READ MORE
In Indiana’s Hamilton County, where the labor market is exceptionally tight, businesses are rethinking all kinds of things: “With an unemployment rate more than 2 percentage points below the national figure, Hamilton County’s employers are engaged in a furious recruiting drive to fill positions ranging from chief technology officers to supermarket cake decorators. Job applicants are so scarce that manufacturers are turning to inmates on work-release from the local jail.”
“SMC has been raising wages and improving benefits for its 1,600 employees. On top of free health care, tuition reimbursement, and a subsidized cafeteria where $2.50 will buy you breakfast, the company rolled out a new leave policy on April 1 that removed any cap on vacation time or personal days.”
“At Gaylor Electric, which designs, assembles, and installs electrical systems for big commercial projects such as Amazon distribution centers, a search for talent that predates the pandemic is now paying dividends. A few years ago the company embedded a charter school into its production floor to train high school students as electricians.”
“The U.S., argues [Carmel mayor Jim] Brainard, needs looser immigration laws to attract more migrants and higher wages for low-income service workers. ‘Those are the two biggest challenges’ for the American economy, he says.” READ MORE
Walmart is offering truck drivers a $110,000 starting salary—and expanding a program that trains existing employees to be drivers: “Walmart’s efforts to build out its trucking fleet illustrate how companies are taking on more responsibilities within their supply chains and, in some cases, taking over tasks once handled by third parties.”
“Walmart, the country’s largest retailer by revenue, has long been known for paying its truck drivers more than the industry average, a holdover from the early days of the company when executives believed a large internal fleet helped Walmart move freight more efficiently.”
“In job postings on Walmart’s website, the company said it offers quarterly safety bonuses in addition to sign-on bonuses of $8,000 or more for new truck drivers in some locations.”
“In the U.S., median annual pay for heavy-truck and tractor-trailer drivers was $47,130 in 2020, the most recent annual data available, according to the Bureau of Labor Statistics, and has increased by about 3 percent to 4 percent annually since 2016.” READ MORE
The percentage of U.S. workers testing positive for drugs hit a 20-year high: “Of the more than six million general workforce urine tests that Quest Diagnostics, one of the country’s largest drug-testing laboratories, screened for marijuana last year, 3.9 percent came back positive, an increase of more than 8 percent from 2020, according to Quest’s annual drug-testing index. That figure is up 50 percent since 2017. Since then, the number of states that legalized marijuana for recreational use grew to 18 from eight, plus the District of Columbia. Despite the increase in positivity last year, fewer companies tested their employees for THC, the substance in marijuana primarily responsible for its effects, than in recent years, said Barry Sample, Quest’s senior science consultant.”
“‘We’ve been seeing year-over-year declines in those recreational-use states, but by far the largest drop we’ve ever seen was in 2021,’ he said about the number of drug tests that screened for THC.”
“The percentage of specimens tested for THC declined 6.7 percent nationwide in 2021 from 2020, while that figure fell by 10.3 percent in states where recreational marijuana is legal, according to Quest’s data.” READ MORE
Here’s how a TikTok video saved a struggling restaurant: “Like many restaurants in the fall of 2021, Lakewood, Colorado-based Clawful, which serves Vietnamese Cajun seafood, was on the verge of closing for good. Then a 22-year-old with 700,000 followers and a penchant for TikTok changed everything. After hearing from a friend about the restaurant's plight, Eli Stone, the founder of Bouta, a Gen-Z consulting firm based out of Denver, volunteered his services to Clawful's owners, Korean immigrant couple Sam Han and Maria Song. What followed was a 57-second emotional appeal to save the family-run business.”
“The video shared the 59-year-old owners' story of why they started their restaurant—and the miserable timing of its opening, just a few weeks before the pandemic took hold of the U.S. in March 2020.”
“After its posting on October 6, 2021, the TikTok video reached more than 580,000 people, with over 450,000 views just in the first 48 hours. While the video didn't contain a specific ask, people came from all over to eat at the restaurant, say the founders.”
“That weekend alone the business generated $24,000 in revenue. The next week it generated $18,000, and the third week roughly $15,000. Prior to the video, the founders say they were lucky if the restaurant generated $700 to $1,000 a week.” READ MORE
Opportunity Zones may not be a “Marshall Plan for the heartland”: “The Buena Vista tasting room is not just another downtown Napa wine bar. It is a conspicuously indulgent place, where epicureans can fill their glasses with cabernet and sink into the carefully restored mezzanine’s dark velvet lounges for a tasting of fine caviar and artisan chocolates resembling museum pieces. One vibe this nook of luxury does not give off is that of a community in distress. Its neighbor in the ornate 1920s Italianate edifice known as the Gordon Building is an Anthropologie store. The redevelopment of the building, damaged in an earthquake, was bankrolled using a tax shelter created in 2017 for the wealthiest Americans on the promise it would bring opportunity to the most downtrodden places.”
“Billions of dollars’ worth of tax breaks for the wealthy are being generated by the Opportunity Zone program, often in pursuit of luxury high-rises, high-end hotels and swank office space.”
“It has subsidized hulking self-storage units nestled alongside freeways and upmarket apartments for employees of the hottest Bay Area tech firms.”
“One thing the tax break has fallen short on: creating opportunities in low-income communities.”
“The story of how this all happened has deep California roots, sprouting from the vision of a Silicon Valley billionaire who inserted himself into the machinations of federal policymaking.” READ MORE
In China, manufacturing is grinding to a halt: “Stringent government measures to contain the country’s Covid-19 outbreak, the worst in more than two years, are locking down tens of millions of people, mostly in and around the industrial heartland of Shanghai. The curbs are keeping many workers at home, restricting output at some factories and closing others, including component makers for Apple and Tesla.”
“Even companies that have brought workers to live onsite to keep operations going are experiencing production difficulties because suppliers have shut down or component deliveries can’t get through, said Harald Kumpfert, a member of the European Union Chamber of Commerce in China who represents businesses operating in the country’s northeast.”
“Shipping and trucking companies are suffering long delays and the volume of goods moving through the port of Shanghai has fallen around 40 percent compared with pre-lockdown levels, the chamber estimates.”
“More than half of U.S. multinational companies in China have reduced their annual revenue projections following the latest outbreak in Shanghai, the American Chamber of Commerce in Beijing and Shanghai has said, citing a recent survey of members. More than 80 percent of manufacturers reported slowed or reduced production.” READ MORE
An appellate court reinstated the vaccine mandate for federal workers: “The decision reversed a January order by a federal judge in Texas who ruled that President Biden didn’t have the unilateral authority to mandate that all federal employees consent to vaccination. The vaccine requirement had been put on hold since that decision. The case is among a flurry of legal challenges to the administration’s various vaccine requirements. Thursday’s appellate decision marks a victory for the White House’s vaccination efforts after a string of legal setbacks.”
“The president has also mandated vaccination for employees of federal contractors, but those requirements have been put on hold in the lower courts, where proceedings are continuing.”
The Supreme Court blocked the administration’s Covid-19 vaccine-or-testing rules for large private employers, while allowing the administration to require vaccinations for more than 10 million healthcare workers whose facilities participate in Medicare and Medicaid.” READ MORE
THE 21 HATS PODCAST
Do You Take Money Off The Table? This week, Shawn Busse, Paul Downs, and Jay Goltz discuss their philosophies about taking money out of the business. Of course, you can’t take money off the table unless there’s money on the table. Paul tells us that he once calculated his average earnings for his first 22 years in business and they came to about $11 an hour. But he now expects to make more money in the next five years than he did in the previous 35. We also talk about content marketing, direct mail, and tradeshows. Plus: Was the Paycheck Protection Program, despite the billions of dollars in fraud, a success?
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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