Taking Stock of Where We Stand Amid Many Challenges

It’s no secret that businesses everywhere are feeling pressure right now. Between labor shortages, rising inflation and the continued disruptions in the supply chain, everyone’s bottom line is taking a hit. Is this just how things will operate in a mostly post-pandemic world?

Constantly needing to pivot in new directions for over two years has been an arduous task. However, at risk of falling into cliché, it may be the worst of times and the best of times, simultaneously. The new strategies and systems being pioneered to combat changing obstacles may just be the revolution businesses need to continue growing and innovating.

Changing the way workforces operate and adapt to challenges has been the primary focus for some time. Now that much of the initial shock of these changes has worn off, though, businesses can assess the positive and negative effects of these changes. Some may be here to stay. In many instances, these adaptations not only stabilized, but improved company operations or working conditions. For example, according to Pew Research Center data from February, about 61% of people who are able to work from home say they are actively choosing remote work over going into the office, and about 78% say they’d prefer to continue working from home all or some of the time after the pandemic fully passes.

Conversations are happening right before our eyes about working culture and the expectations employees have for employers. Business leaders are capitalizing on this opportunity to learn about the communities and people they serve, so they are able to better retain a stable, resilient and efficient workforce. So while the last few years have been a learning curve, industries have identified new areas to improve and have strategized ways to succeed that will only make them better prepared for future challenges, come what may.

STATUS UPDATE

The Iowa Association of Business and Industry (ABI) sends out a yearly anonymous survey to executives of their member companies across the state of Iowa to gain  insights on the state of affairs within the variety of business sectors they serve. The focus of this year’s survey was the ongoing workforce and supply chain challenges many are still facing. Out of the 109 submitted surveys, it seems most businesses have tried to make the most with what they can, acknowledging where changes needed to be made in order to continue operating as efficiently as possible, and strategizing solutions to challenges.

Current workforce challenges post-pandemic are employee burnout and other mental health issues, as well as labor shortages. Efforts to address these concerns include continuing remote and hybrid work options, shift schedule changes, wage increases and other additional benefits. About 56% of businesses ABI surveyed say they changed shift schedules or allowed for remote or hybrid work. Additionally, 67% increased wages.

Some companies used additional initiatives to alleviate stress and incentivize employees. To combat labor shortages, 13% of companies have begun registered apprenticeships, along with 38% that have used work-based learning programs with high schools and community colleges to reach more of the population newly entering the workforce. Fifteen percent have deployed broadband to assist remote workers. Housing assistance and child care assistance via the Child Care Challenge Fund were used by just 7% and 5% of companies, respectively.

Another 37% offered other types of public or private initiatives not listed in the survey. Heather Bruce, president of Osmundson Manufacturing Co., said the agricultural equipment supplier and fifth-generation family business began incentivizing hiring by giving bonuses to current employees who referred a new hire. “It’s helped us a lot because we’re actually getting people that want to stay [working for us], and it boosts the morale of the guys that have been with us.”

When it comes to ongoing supply chain challenges, the consensus is pretty clear. Only 5% said their supply chain issues were decreasing, while 54% said they were increasing. Forty percent said their challenges were staying at a stable amount. These figures tell us to proceed with caution.

John Kenworthy, CEO and president of office furniture and supply company Storey Kenworthy, said that while lead times are slowly declining (from about 24 weeks in late 2021 to about 10-12 weeks currently), rising production costs are “causing a whole other level of disruption.”

“It’s a cause for concern, and also disrupting the customer experience. We have good activity and a strong backlog, but we’re not receiving everything in complete orders. We’ll get 90% of an order but we can’t invoice and install it until it’s complete, so our warehouses are filling up and causing that disruption,” Kenworthy explained.

Inflation is taking its toll on every aspect of life, from increasing gas prices to rising grocery store costs. For businesses, inflation is a tricky thing to work around without also having to raise the prices of their own products. About 46% of executives say they have had to raise prices in response to rising input costs.

To combat these rising input costs another way, about 7% of businesses have moved to different vendors or changed processes in order to keep input cost low.

“I’m happy to be in Iowa,” Kenworthy said, “because what we’re experiencing here pales in comparison to what my peers on the East Coast and the West Coast are experiencing. This is a global uncertain situation. I think we should continue to provide grace, patience and understanding to each other as we all try to work through this, because it’s real.”

There does seem to be a light at the end of the tunnel, though. When asked to rank their outlook on their businesses for the second half of 2022, with 10 being the most positive, just over a quarter (27%) said 8 and just under another quarter (23%) said 7. Another 10% ranked positivity at a 9, and only 5% answered with a negative outlook ranking below 5. Overall, it seems many are generally positive that things can only go up from here.