Severe labor shortages, high costs, and supply chain disruptions pose significant challenges for Connecticut employers, but businesses remain resilient after the pandemic.
This was taken from a group of business leaders discussing the CBIA/Marcum 2022 study on Connecticut businesses at the September 23rd Connecticut Economic Conference in Hartford.
Discussions were moderated by Michael Brooder, Managing Partner of Marcum LLP’s Hartford office, with Derek Kohl, Vice President of BL Companies, John Green, President and CEO of Lux Bond & Green, and Ritz, Inc. Deb Gearty, the principal, appeared. [pictured above, from left to right].
“The survey was riddled with inflation, rising costs, labor shortages and, of course, COVID-related remote worker issues,” said Brooder.
“Seeking Opportunity”
Gearty said that although her company was “impacted by global supply chain issues and the slow return of employees to work,” it was overall profitable this year and is “on track for 2023.” We are doing very well,” he said.
Green said that “the whole pandemic era was actually very strong” for his jewelry business.
While everyone was stuck at home during the pandemic, he said, “people said they wanted to spend money,” and spent money on each other.
“Our challenge, like many others, is that we don’t have enough employees to seize those opportunities.”
BL Companies Derek Cole
“2022 is off to a pretty strong start,” continued Green, “despite a lot of headwinds.”
Cole said the outlook for the rest of 2022 and 2023 is “positive, but with caution.”
Mr Cole said:
“We will be very cautious next year, but we will continue to look for such opportunities to recruit and attract this incredible talent that we see.”
economic outlook
According to the study, 68% of companies will be profitable in 2021, while 17% will break even and 15% will lose money. This is 7 percentage points higher than last year’s survey predicted.
However, only 26% of businesses expect Connecticut’s economy to grow next year, down from 39% last year.
Speaking to the audience or more than 300 business leaders, Gearty said they could see the impact of global supply chain bottlenecks on construction sites.
“What we try to do is really look forward, be proactive, know what’s out there and get involved early so we can understand people’s needs,” she said. rice field.
She added that while local manufacturers did everything they could to keep supplies for businesses, supply chain disruptions were a “global problem.”
Three-quarters (75%) of companies surveyed by CBIA and Marcum said they had raised prices to keep their businesses open when asked how their company was affected by skyrocketing inflation. .
Just under two-thirds (64%) have seen their margins decline, 23% have reduced investments in equipment and other capital assets, and 6% have laid off employees.
Dealing with bottlenecks
Green emphasized how important it is to plan ahead and communicate to prepare for supply chain disruptions.
“What took eight weeks now takes 16 weeks,” he said.
“So I think it all comes down to planning.
“What took eight weeks now takes 16 weeks.”
John Green of Lux Bond & Green
Kohl has also seen construction clients affected by lack of product availability.
“We really had to adapt, get creative and source other materials to substitute,” he said.
“However, there is an impact from increased delays and costs that would otherwise lack dominoes to be put into growth and other expansions.”
business environment
This year’s survey showed that 50% of respondents believe the state’s business environment is deteriorating. This reflects the summer release of CNBC’s survey of the top states for American business, where Connecticut fell 15 places to her 39th place.
According to the study, 68% of companies will be profitable in 2021, while 17% will break even and 15% will lose money. This is 7 percentage points higher than last year’s survey predicted.
When asked what could be done to improve Connecticut’s business climate, Cole said his company has clients and projects in both the public and private sectors.
He said discrepancies between local and state vetting processes created an “unknown environment for business” that alienated clients.
Cole also called for greater attention to transportation and infrastructure.
“Decades of underfunding have taken their toll,” he said.
Cole said $5.4 billion in federal funding is coming to the state as a way to “make our communities great places to live and play” and as a way to “revitalize our towns and downtowns.” I admired what was done.
Funding for infrastructure was “important,” Green said, noting that some Lux Bond & Green employees live 10 miles from work, but one-way said his commute was an hour.
“Investing in the future must be part of what we expect from the state,” he said.
affordable
Gearty said some communities in the state are more livable than others, encouraging a stronger sense of community.
“It’s about the attitude, the way you solve problems and help those entities work together to make things happen,” he said.
A CNBC survey ranked Connecticut as the eighth most expensive state to live in, and a third of employers said affordability for their employees and their families was their top concern, also in a CBIA/Marcum survey. I am answering that it is a matter.
High taxes were the top employee concern for 20%, followed by healthcare (18%), the economy (17%), education (6%) and transportation (5%).
Nearly 9 in 10 (89%) of business leaders surveyed say the cost of doing business in Connecticut is increasing. CNBC ranked Connecticut as her sixth most expensive state for business.
changing workplace
Broder noted that the rise of remote work will make it more difficult for companies that cannot offer jobs virtually to find and retain employees.
Green, who does not offer remote work as a retailer, said the company is focusing more on building a stronger employee culture.
“We have to treat our employees very differently and listen to them.”
green
“It’s not just about money, it’s also about enjoying waking hours when people are working,” he said.
“It was very important to us to create a culture and give them an experience of when they are working.It is a fun exercise.
“We really have to treat our employees and listen to them in a completely different way than we used to.”
remote work
Gearty was able to see the pros and cons of remote work.
On the one hand, she said, there is a big difference in team dynamics when communicating through a video platform instead of in person.
On the one hand, she said, “the pandemic has shed light on the fact that some of these jobs can be done remotely and can be done hybridly.”
“I see it as an opportunity. At the same time, it’s a challenge and it’s always changing.”
“The pandemic has shed light on the fact that some of these jobs can be done remotely.”
Deb Gearty of Ritz
According to Kohl, BL Companies has worked hard to create a corporate culture that exists both in person and remotely.
“We don’t want a business relationship,” he said.
“We want strong, established relationships with our clients as well as our internal employees.
“We are trying to be more proactive in maintaining and strengthening these relationships.”
labor shortage
The conversation turned to the most important issue facing businesses in Connecticut: attracting and retaining employees.
8-5% of employers said in this year’s survey that it is difficult to attract and retain employees, and 39% said the lack of skilled applicants is the biggest obstacle to growth .
Cole said there is “a lot of competition here” because of the “limited resource pool” and small size of the state.
In addition to finding current employees, Cole is “investing in the future” by hiring high school interns.
“You won’t see a return on that investment until they graduate from college in the future,” he said.
“With more funding, investment and support, we can definitely help.”
Cole also said companies need to prioritize what the new generation of workers want.
Instead of focusing on health care and retirement, younger employees worry about renting cars, finding cars and finding housing, he said.
“Trying to find the right mix of compensation and benefits package that appeals to everyone is very important to us,” he said.
Why Connecticut?
Brooder asked Geary, Green, and Kohl why they chose to do business in Connecticut.
Green called Connecticut “a great place to work, play, and raise a family.”
He also said the situation is just as difficult as the labor shortage, but his company has several employees who are young and have been with the company for over a decade.
“Once we find top talent, we have to really think about how to retain it. If we can, find the next generation to work for us. This has been our biggest challenge.” .”
Gearty said her lifestyle in Connecticut is what keeps her in state.
“We have a really nice place to live and work here,” she said.
“The workforce here is absolutely incredible,” Cole added.
“He is highly educated, extremely hardworking, creative and arguably the best in the country.
“I think we should be really proud of the amazing workforce we have. We just need to scale it up.”
Policy solution
Gearty also promoted CBIA’s TransformCT policy recommendations. The findings helped inform the findings as an excellent package of solutions to make Connecticut more attractive to residents and employers.
CBIA President and CEO Chris DiPentima told conference attendees that solving the labor shortage crisis requires long-term, sustainable solutions.
Nearly a quarter of the companies surveyed by CBIA and Marcum say tax cuts should be a top priority for the state’s next governor and legislature.
17% cited more business-friendly policies, followed by the economy (13%), government reform/deregulation (13%), state spending cuts (9%), and addressing high cost of living and business (8%). ) was mentioned.
“We haven’t talked enough about how great life is, how great it is to raise a family here, how much we love living in Connecticut,” he said.
“Yes, we charge high taxes and such, but we need to do better job marketing.”
Gearty agreed and said, “We’re all here.” [today] Because I want to do something about business here in Connecticut. “
“Being able to talk about it and celebrate some of the positive things makes a difference,” she said.
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