Labor and health costs challenge dealers
Washington, D.C. — When pro dealers gather to talk about their business, it's usually not long before they talk about the challenges of healthcare costs and labor shortages.
Such was the case during the National Lumber and Building Material Dealers Association (NLBMDA) Manufacturers & Services Council Meeting held here as a part of the NLBMDA's Spring Meeting & Legislative Conference.
Christopher Costello, CEO of Gloucester, Massachusetts-based Timberline Enterprises, said his four-location building supply dealer enjoys a strong workforce and a healthy labor pool. For his builder customers, however, it's a different story.
"We see the labor problem a little farther down the food chain," said Costello. "Our customers are reporting labor shortages of epic proportions on almost all fronts."
Costello was one of three pro dealer panelists to share their thoughts during the meeting. He said the framing component of the business is the driver of labor shortages for his customers.
"That is a skillset going away, and it's not being refilled in a way that is required in order for us to have a construction market recovery," he said.
For the company itself, he said, the biggest challenge is health care. "The rising costs of health care affects us all," Costello said. "I don't think we've scratched the surface of the true costs of the Affordable Care Act."
To illustrate the scope of the healthcare challenge, he said entry-level employees receive healthcare benefits of about one-third of their salary. All pro dealers, he said, need to be aware of the situation and the danger of escalating healthcare costs.
At Shepley Wood Products in Hyannis, Massachusetts, healthcare costs are the company's second largest expense after payroll, said Leah Kosnack Fennell, marketing director at Shepley.
"We're trying to get very creative in the ways that we continue to offer good benefits for our employees and not bankrupt our company at the same time," she said.
Another challenge for the four-unit pro dealer located on the affluent, resort area of Cape Cod is the cost of housing that creates barriers for new workers to enter the area. "The cost of housing is so high it's hard for young people to make a start where we live," she said. "It's an enormous challenge for us."
Brandon Coppage, general manager of Kelly Bros Home and Design Center, a three-unit dealer in Covington, Kentucky, echoed some of the challenges faced by his fellow panelists — and previous panels organized by the MSC. The key challenge, he believes, is labor.
"It has been forecast for a while, but this is the year that the shortage of framers becomes reality," he said. "The level of business has come to the point where the shortage comes to light."
Also, Coppage said the company is looking down the road for future customers who might replace builders and remodelers who are retiring or getting out of the industry. It's not always clear where those new customers will come from, he said.
While discussing the challenges, all the participants in the panel said growth was in the forecast for 2015.
The Rental Show sees increased attendance in NOLA
The American Rental Association had positive things to report from the show floor in New Orleans last month.
This year's The Rental Show, which took place at the Ernest N. Morial Convention Center from Feb. 22 through Feb. 25, saw attendance up for the sixth straight year.
That's an achievement not seen since the early 1980s, said the folks at ARA in a statement.
Rental business attendance was up nearly 5% this year, and the pre-show Events & Tents workshop had been sold out since November.
“Everything at the show was working at the highest level this year," said ARA CEO Christine Wehrman. "There was strong interest in meeting with exhibitors, purchasing of equipment, excellent networking and positive attitudes from all attendees and exhibitors. There is an optimistic outlook for the future of the equipment rental industry, short-term and long-term. Everyone is very confident of the future being a stronger marketplace and they are investing in the growth of the industry.”
Other highlights of note included a keynote session featuring Denver Broncos quarterback Peyton Manning, as well as an overall sustained momentum in buying activity.
"People were buying from the beginning of the show and others were shopping and then coming back to finalize quotes,” said Clay Eubanks, Takeuchi Manufacturing (U.S.), Pendergrass, Georgia. “We knew it was going to be good because the economy overall is doing better. The show this year was like the old days with a buzz and buying activity.”
Joe Scarlett to enter Home Channel Hall of Fame
Joe Scarlett, former chairman and CEO of Tractor Supply Company, will enter the Home Channel Hall of Fame during Hardware + Building Supply Dealer magazine’s Golden Hammer Awards ceremony May 5 at the National Hardware Show in Las Vegas.
Scarlett held senior executive roles at Tractor Supply from 1979 until his retirement at the end of 2007. Under his 10-year watch as CEO of the company, revenues quadrupled and the company’s share price increased by a factor of 10.
“I’ve been very fortunate to have had a long and successful retail career in a great industry,” Scarlett said.
Today Scarlett manages the Franklin, Tennessee-based Scarlett Leadership Institute, an organization committed to improving business leadership skills with a strong emphasis on ethical behavior.
“Joe Scarlett’s passion for the retail industry is contagious and inspirational,” said Ken Clark, editor of Hardware + Building Supply Dealer. “We’re excited to honor his career at this year’s Golden Hammer Awards event.”
In partnership with the National Hardware Show, coming to Las Vegas May 5-7, HBSDealer will host the Golden Hammer Awards in a special area on the show floor on May 5.
The Home Channel Hall of Fame was instituted in 2004, when the inaugural class of inductees included Bernie Marcus and Arthur Blank of Home Depot, Joe Hardy of 84 Lumber and Joe Orgill of Orgill Inc.