Iowa Businesses Show Resilience During Pandemic
June 9, 2021 | Iowa Businesses Show Resilience During Pandemic
Iowa is no stranger to adversity. The state has weathered many economic struggles throughout its history, perhaps most notably the farm crisis of the 1980s, when high agricultural production and rising debt led to foreclosures and a litany of fiscal issues throughout the state. The business community and government leadership worked together to diversify Iowa’s economy, creating many strong sectors in information technology, advanced manufacturing, renewable energy and more.
Iowans who were around for the Great Flood of 1993 remember how it rained nearly every day for months, causing record river crests. The floods caused billions of dollars in damage to homes, farms and infrastrucutre. But Iowans came together and built back smarter. The same is true for subsequent floods, and even the derecho of 2020. Iowa businesses and industries remained resilient, adjusted and recovered. The COVID-19 pandemic is no different. While most Iowa businesses experienced reduced revenues, layoffs and major shifts in operations, many are now seeing the end of the tunnel and are starting to recover.
According to the Bureau of Labor Statistics, 185,800 jobs were lost in Iowa during the pandemic. Businesses are quickly adding back jobs, however. In March 2021, the unemployment rate was 3.7%. That’s compared to 10.2% in March 2020 and 2.9% in March 2019, according to Iowa Workforce Development. While many Iowa businesses were financially stressed during the worst of the pandemic, hundreds of companies were moving forward with plans to expand. An Iowa Economic Development Authority survey in February of 813 companies showed that 297 reported plans to expand, with $2.62 billion in capital investments scheduled and the creation of 3,941 new jobs.
As more Iowans receive vaccinations and return to pre-pandemic routines, Iowa businesses are reporting optimism about financial recovery.
ABI’S CEO SURVEY
The Iowa Association of Business and Industry (ABI) recently completed an anonymous survey with ABI member company leaders about the impact of the pandemic. Company officials responding to the survey said they expect their sales to be higher during the third and fourth quarters of 2021 than sales were before the pandemic. Sixty-three percent of respondents said they expect their profits to increase, compared with 25% who said they expect profits to be less than they were before the pandemic.
When they were asked about their greatest concerns coming out of the pandemic, the top responses were finding enough employees/hiring (39%), supply chain issues (22%) and finding new customers (20%). Business leaders said the greatest challenges to their internal operations in the past year were increased health and safety protocols (59%) and the increased technology investment required to make remote work possible (10%). When it comes to remote work, many businesses are allowing employees to continue to work from home (65%), compared with those who are not allowing it (34%).
About half of those surveyed continue to restrict access to their businesses by employees or visitors (48%), and about half do not (51%). More businesses are not restricting employee travel (66%) than those who are (33%). As for vaccines, most respondents said they are not offering incentives to employees to receive a vaccine (80%). Of the businesses that are offering perks, those incentives range from vacation hours and gift cards to no longer being required to wear a mask at work.
Survey respondents also reported that many of their employees have already been vaccinated. Twenty-nine percent said 25-50% of their employees were vaccinated, while 25% said half to three-quarters of their employees had been vaccinated. Fifteen percent of business leaders reported that they are not tracking whether employees are vaccinated.
NEVER SLOWED DOWN
Some businesses, like Guarantee Roofing-Siding-Insulation Co. in Sioux City, never experienced a slowdown in work. The family-owned company performs exterior home improvement jobs, replacing and repairing roofs, windows, doors, siding and insulation, as well as commercial work within about 100 miles of town.
Charese Yanney, a partner in the business, said the company was very busy with work orders during 2020.
“I did not shut down. All of my employees, the only time they were off was in the winter when it was extremely cold,” she said.
As demand grew for home renovations and new home construction, supply chain issues became the company’s greatest challenge, like many respondents of the ABI survey. Siding is in short supply and lumber is difficult to come by after tornados and wildfires closed strategic lumber mills in the South and on the West Coast.
“Last year, it was taking, at first, maybe three weeks to a month for materials,” Yanney said. “And then it got to be six weeks or more and usually it was ‘or more,’ especially for siding materials. I had one job where I had everything I needed for several months, except for the corner posts. Now, when you’re doing siding, you can’t start the job without corner posts.”
Supply chain delays, coupled with the skilled labor shortage, mean Yanney is a year behind in jobs as demand for home renovations continues to be high, she said.
“That’s my biggest issue with siding, is finding enough employees who are willing to do a good job,” said Yanney, who is a 2010 Iowa Women’s Hall of Fame honoree. “There are a lot of people out there who just slap it on and then they’re done, and you’ll never see them again. But I don’t work that way. This is a family business. We’ve been in business for 95 years this summer. You don’t stay in business that long and not take care of your customers.”
When it comes to COVID-19 precautions, the construction industry has unique challenges and advantages. One advantage is construction job sites are open air and outdoors, so it’s easy for workers to maintain a safe distance from one another. A challenge, however, is transporting workers from site to site in trucks.
Yanney took several steps to protect workers in each situation, from mask wearing and sanitation requirements to reducing the number of workers on each site.
“One of my biggest worries was keeping things sanitized enough,” Yanney said.
None of her workers had COVID during the past year, she said.
ENOUGH SUPPLY TO GO AROUND
One of the companies to be positively affected by the pandemic is Yeoman & Co., a Monticello-based producer of snow removal, yard maintenance and similar tools. Yeoman is coming off a good winter season, said Tom Yeoman, president and CEO of the company.
“There was not a lot of snow across North Dakota, northern Minnesota and Wisconsin,” he said. “We, however, received larger than normal orders from southern Minnesota to Kansas City and St Louis.”
Unlike many other manufacturers in its market, Yeoman & Co. has experienced few supply chain disruptions during the past year.
“We found we were one of the few companies that had inventory to ship, and orders started to pour in due to our competitors’ inability to ship tools,” Yeoman said. “As a result, we have experienced a 20% increase in sales that continues to today. The uptick in business that started in May of 2020 continues, since we are one of two companies in the U.S. that has inventory to ship in a timely fashion.”
The company never shut down but issued a mask mandate.
“We have a lot of room in the facility so we can social distance without difficulty,” he said. “There wasn’t much adjustment needed during the lockdown. Our customer base needed tools, and we’re in a position to ship to meet their needs.”
Raw material shortages, which are plaguing businesses around the globe, are an issue for Yeoman & Co.
“The challenges at this point are inventory replacement, raw material increases and increased freight,” he said. “We have experienced doubling of steel costs, aluminum sheet delays and doubling of freight costs. This requires us to be vigilant in maintaining pricing and margins.”
ADVANCED SOLUTIONS TO NEW CHALLENGES
At Hubbell Realty Co. in West Des Moines and its subsidiaries in Sioux Falls, S.D., and Omaha, Neb., most of its 350 employees were able to keep their jobs during the pandemic.
“We were a little nervous at first, as governors determined which workers were essential workers,” said Rick Tollakson, president and CEO of Hubbell Realty. “But the homebuilding industry, construction industry and all of our apartment maintenance people, leasing people, all of them were considered essential, so we were able to keep easily 250-plus of our workforce, which do not work at our corporate office. For the rest of us who work in the corporate office, we didn’t shut everything down; we asked everyone to not come to the office.”
Tollakson credits the Paycheck Protection Program for playing a big part in keeping employees on staff and rental assistance programs for keeping commercial and residential tenants housed.
“It’s best to keep everybody afloat and it’s a good safety net for them,” he said.
As restrictions lifted and the economy began to reopen, Hubbell employees returned to the office on a voluntary basis. Now, corporate office workers are asked to be in the office at least three days a week.
“We’ve always had a very flexible workforce,” Tollakson said. “Most people did not take advantage of it because they were convinced that they could not work remotely. That was probably one of the more surprising outcomes, was a number of people who swore they could never work remotely found out that they could, and they actually enjoyed it.”
With more employees working remotely, the company focused on technological solutions to keep everyone connected, as well as to make the company more efficient and customer-service-friendly, he said. For example, one of the company’s divisions, Hubbell Community Management, which manages 5,000 homes in community associations, was able to incorporate a software platform that allows residents to pay bills and communicate online.
“It really improved their visibility,” Tollakson said. “It was a platform we had talked about implementing. COVID gave people more time to focus on getting that accomplished.”
Hubbell created a business continuity team to review efficiencies and inefficiencies, and review Centers for Disease Control and Prevention guidelines, state and local rules, and other issues. The group would make recommendations on how the company should deal with various pandemic-related issues.
Claire Brehmer, a communications specialist at Hubbell, helped create a new SharePoint intranet system called Hoogle, which has improved employee communications. Instead of sending out multiple emails a day about pandemic-related issues, the intranet platform is a place employees can go to read up on company updates and get the latest new on restrictions, such as mask mandates.
“It’s a really good communications platform, especially for people who are working remotely,” Brehmer said. “It not only allowed us to have all our documents in one place that associates could access online wherever they’re working from, but that allowed us to put out notices if we did have a positive (COVID-19) case or a change to CDC guidelines.”
While emails or Hubbell’s text messaging service could have delivered those types of announcements, the SharePoint system allows customers to choose when they receive messages, to better fit their schedules.
“We found that Hoogle gave the ability to not only communicate these updates and get them to people in a timely manner, in some cases, instead of sending four emails a day that might be somewhat the same, they could go check Hoogle whenever it was convenient for them, instead of interrupting their workday,” she said.
Hubbell was planning on June 1 as a target date to return buildings and operations to a pre-2020 level, especially now that more than 85% of employees are vaccinated, Tollakson said.
“We feel pretty good about those numbers,” he said.
As life returns to normal, Hubbell’s focus is shifting back to the skyrocketing price of commodities and the construction labor shortage. Tollakson said he expects most of the supply chain disruptions to be solved by the end of the year.
“We all hear about lumber being up 150% and steel being up 250%, but our foundation guy just told us he has only a five- or six-week supply of form ties. If you can’t get the form ties, you can’t pour the wall,” he said. “Truss companies are having trouble getting the little metal plates that connect the truss members together. If they can’t get any, they only have another four- or five-week supply of these. There is a huge disruption in the appliance industry. It’s a struggle to get things.”
Not only are home sales and construction up, Tollakson said, he’s seeing a surprising uptick in residential lot buying, as well.
“We have about 450 lots under construction right now that are basically all sold,” he said. “We’re probably doing about twice as many lots this year as we did last year.”
Meanwhile, the construction labor shortage has only become more severe during the past year. Hubbell leaders on a recent Friday afternoon were delivering pizzas to construction workers, thanking them for their work.
“Touches like that is what we’re doing to let them know how much we appreciate our trade partners and help strengthen that relationship because we need them,” Tollakson said.
“We don’t take them for granted.”