Developing carefully with balancing innovation and profitability, or being complacent, watching operating expenses rise and earnings fall.
FREMONT, CA: Most restoration experts spend time improvising new methods and policies to ensure business continuity for clients and workers during the global pandemic. It has stabilized, and the economy and talent marketplace are still upheaval, generating substantial institutional shifts across all industries. Millennials dominate the workforce, as they are only beginning to feel their influence—human centricity, global effect, and continual development have brought record-level attrition. With enormous turnover, the older workforce is solidifying its exit plans, spurring M&A, and widening the skills gap.
Employee value proposition: Companies are mandating perks, compensation, and EVP improvements with their newfound power. They redefine work-life balance and demand inflation-fighting measures. Restoration leaders may find building a competitive EVP challenging. It can be the progressive, development-focused employer who sees each employee as an individual with distinct interests and abilities rather than a cog in the wheel. While trendy benefits are most apparent, they don't boost retention or team morale. Retention depends on personal opportunities and career growth.
Skills gap: The industry constantly mentions the skills gap but rarely addresses it. The college is for everyone myth stigmatized trades and created an irreparable gap in the labor force in the 1990s, causing vocational education to plummet. There is no quick answer for the decline of apprenticeship-based trades. Getting skilled people is the most significant concern, as well as retaining employees. EVP and technology-forward operations are a solid start, but the whole group must support and dedicate themselves to closing the gap.
Automation or digitization: Due to supply chain disruption and workforce constraints, commodity lead times and material costs are rising. Digitization can help safeguard profit margins by finding ways to do more with less (bandwidth, staff, resources) as operating expenses fluctuate. Restoration is notoriously digitally behind. They use technology sparingly and with mistrust. Automating repetitive, manual operations will help stabilize operating expenses during this disruption.
Industry consolidation: Many leaders have concentrated on revitalizing their talent acquisition strategy to overcome the Great Resignation. Most restoration business owners' departure plans involve a liquidity event since finding a replacement is becoming harder (skills gap). It may include selling to private equity or partnering with a larger, like-minded company to continue its legacy. Industry consolidation is natural, and recent events have expedited restoration. Sellers should select a partner who shares their goal for their team's evolution, service delivery, and restoration. Buyers must consider the restoration community's total impact.
