It’s no secret that the coronavirus (COVID-19) pandemic has had a major impact on the U.S. economy in general – and on the labor market more specifically. The nature of that impact has changed over time, however.
In the initial stages of the pandemic, the primary concern facing the labor market was job loss. There were good reasons for this. According to data published by the Commerce Department in January 2021, U.S. employers eliminated 22.2 million positions in March and April of 2020 and only managed to restore 12.4 million of those lost positions before the end of the year, meaning that the country experienced a net job loss of 9.8 million.
But job loss is no longer the main problem for the labor market. With the economy showing signs of recovery from the pandemic, U.S. employers are no longer in the position of having to carry out the kind of workforce reductions that pushed unemployment rates all the way up to 14.7% in April 2020, marking the highest level since the Great Depression. Instead, over the last year, they’ve had to learn to operate in an environment where workers are hard to find.
Indeed, data from the Bureau of Labor Statistics (BLS) show that unemployment rates dropped all the way down to 3.6% in March 2022. That’s the lowest level recorded since before the pandemic, and it’s a signal that labor markets are very tight.
But this isn’t just a statistic. There are plenty of U.S. employers that have now learned firsthand exactly how challenging it can be to keep their businesses operating at a time where there are more “Help Wanted” signs posted than there are people to hire.
One of them is The Equipment Source. Over the last year, the Naples, Florida-based tool and equipment rental company owned by Eberhart Capital, has had to wage a full-blown campaign to hire and retain new team members and make sure current staff stays put.
Head-to-Head for the Best and Brightest
Accomplishing that goal has involved creating additional incentives, many of them in the form of higher wages.
That strategy is necessary for a couple of reasons, according to Steve Acquafresca, general manager of The Equipment Source in Naples.
Although some people are afraid to reenter the job market for fear of being exposed to COVID-19 in the workplace, he believes others have been weighing the risks against the availability of federal and state unemployment benefits that have been far more generous and long-lasting than usual.
The only way to counter that – and to make sure The Equipment Source attracts and keeps high quality people – is to pay more, he says. In some cases, that means going head-to-head against the competition to hang on to the best and brightest employees and prevent rivals from poaching experienced personnel.
“It isn’t just a shortage of people, but of the people who are good,” Acquafresca said.
The rush for talent in an excruciatingly tight labor market is why other employers have been trying to lure his company’s workers away with offers of better pay, Acquafresca said.
The Equipment Source has had to counter these vigorous recruitment campaigns by taking fast action to keep its best staff members happy, Acquafresca said. In many cases, that has meant matching competitors’ salary offers.
Money Talks, but It Isn’t Everything
Keeping current staff on the payroll is just half the battle in the recruitment wars, however. Finding new employees “off the street” is another.
Here, too, money talks.
“We often end up giving more money to the people being recruited,” Acquafresca said. “They come to me and say, ‘I can go down the street and get $2.00 more an hour,’ and if I think they’re worth it, I’ll give it to them. We’ve had to step up and pay more to the best people.”
Though most prospective employees place higher pay ahead of benefits such as health insurance and retirement plans, a strong benefits package can make the difference to someone evaluating multiple job opportunities. That’s an area where The Equipment Source has an historic advantage.
“We offer health insurance and dental and vision, 401(k) plans and paid time off at The Equipment Source,” Acquafresca said. “We have pretty good life insurance and a pretty good benefits package.”
These types of hiring incentives have been especially important during the residential construction industry’s “busy season,” he said. “We have a ‘slow season,’ because business typically slows down in March and doesn’t pick up again until early May, after Easter,” he explained. “During that time of year, I can afford to be picky, look hard for just the right person, and train them to meet the company’s needs in an exact way.”
The situation was very different as of last , he said, when two of the company’s three stores were understaffed and hunting for talented and experienced personnel. “At that time, we had two positions open in our Naples location and another position in another one of our branches that we just weren’t able to fill,” he said. “It took a while to fill those spots, and we had to cycle through a few people.”
Fortunately, being short-handed didn’t drive customers away from The Equipment Source. The company’s business has continued to grow, as the south Florida residential construction market . “We’re still growing straight out,” Acquafresca said.
Expansion versus the Bottom Line
Dan K. Eberhart, founder and managing partner of Eberhart Capital, said The Equipment Source is in a prime position to support the market’s rapid expansion. In fact, he said, he’s been thinking this might be a good time to continue to grow the business. After all, the company added a LaBelle branch to its Southwest Florida portfolio during the pandemic, joining facilities in Naples and Englewood.
While the expansion may have seemed like a bold or unusual move at the time, the gambit is paying off. In the 16 months since the LaBelle branch opened in November 2020, business has continued to grow, and demand for rental equipment has remained steady.
“The Equipment Source is in a prime position to support the residential construction boom,” Eberhart said. “I’ve been thinking we should expand, maybe open up another store or so to take advantage of the fact that builders need the machines we’ve .”
In the meantime, though, The Equipment Source is focusing on supporting existing assets, including staff.
“Expansion takes money, but most of all it takes the right people,” Eberhart said. “Our new stores will have the right staff, or they won’t open. Period. Since not opening is not an option, that means we will do what it takes to make sure we keep our employees trained, motivated, and on board.”
