THE SAVE SMALL BUSINESS ACT
is tangled in the complicated and politically contentious immigration issue. Chances for its passage by Congress and an expansion to the H-2B seasonal guest worker program, one of its main features, look dim. This is bad news for hundreds of landscape company owners. It means that they will start this season with more jobs to do than with employees to do them.
“Everybody is still hoping that something can be passed and, as it has been done in the past, can become retroactive so that owners can start working on their applications and getting their workers,” says Thomas Delaney, director of government relations for the Professional Landcare Network.
“The reality is that nothing has changed. The only thing that has changed is that the second half cap (33,000 H-2B visas) has been reached. That has put more owners in pain mode,” he says.
H-2B worker availability
To be clear, there are still H-2B workers available in 2008. In fact, the U.S. Citizenship and Immigration Services (USCIS) announced Jan. 2 that it had received a sufficient number of petitions to reach the congressionally mandated cap (33,000) for second half of Fiscal Year 2008.
According to the USCIS Web site (www.uscis.gov) the agency will continue to process petitions filed to:
- Extend the stay of a current H-2B worker in the United States;
- Change the terms of employment for current H-2B workers and extend their stay; or
- Allow current H-2B workers to change or add employers and extend their stay.
Because of the failure of Congress to renew the Save Small Businesses bill none of the “returning” workers, those not counted against the cap, will be allowed to work in the United States. This, in effect, means that there stands to be approximately 55,000 fewer H-2B workers in 2008. Last year there were about 123,000 workers allowed in on H-2B visas.
What it means to you
Understandibly many contractors are not happy.
“The Congress of the United States has failed to do their job in supporting a very large segment of the small business core of this country,” says Fred Haskett, managing partner of U.S. Lawns, West St. Louis, MO. “They’re interested in their jobs. They’re not interested in my people’s jobs or my vendor’s jobs.”
Still, Haskett considers himself lucky.
“We just were told, a couple days before Christmas, that our second two visa applications had been processed and had been approved, prior to the cap being reached,” he says. Even though he has H-2B workers coming, they’re not expected until April, which presents significant challenges.
“It’s going to be very disruptive in the start up phase,” Haskett says. “Depending on when they get here, it could significantly affect our first mowing cycles. Our spring cleanups, mulchings, things like that we generally do in February and March into early April, are going to be disrupted. We’re going to have to do them with temps, or we’re going to have to start earlier and they’ll run way late getting them done.” He also expects his overtime budget to double for the first five months of the season. And even with those challenges, Haskett still considers himself fortunate.
“We’re the lucky company. My agent told me they got a little more than half but not quite two-thirds of their visas through before the second cap for the April (arriving workers),” he says. “Somewhere between a third and a half of my agent’s clients got nobody.”
If you’re one of those companies, what now?
Living without H-2B workers
Don’t procrastinate. Start planning now if you’re facing worker shortage. You have a short window of opportunity to work out your plan.
Start by assessing the potential damage to your company. View the situation realistically. For example, “I will lose two of my best grass cutting crews. Or I will lose three laborers on my pavers crew.”
In addition to putting the “Help Wanted” sign in your window, consider these suggestions:
1 Bulletproof your best customers, by doing their work first and giving them extra attention. If you haven’t been tracking each client for profitability, shame on you. Go over your clients’ accounts to better identify the “keepers.” Do this before spring erupts.
2 Focus on your most profitable service lines. If you’ve been struggling to make a particular service profitable, consider dropping it or selling it. There’s no reason to be “dabbling” in a particular service if you’re short staffed. If you feel it still has potential, add it back into your company at a future date.
3 Train like you’ve never trained before. Knowledgeable and well-managed crews perform significantly better than poorly trained and/or poorly supervised crews. As obvious as that is many companies still fail to provide employees even the most cursory understanding of what they’re to do and neglect to set guidelines on how to do it efficiently and safely.
4 Reduce your workload by dropping unprofitable or troublesome customers. Almost all companies have at least a few marginal customers. They include perpetually late payers, whiners or they could be just outside of your company’s service area, making them expensive to serve. You might have been better off passing them off to another service provider long ago anyway.
5 Do only the work that must absolutely be done, but do it well. Regardless of your circumstances, your word and reputation are still your most valuable assets. Will some of your clients let you postpone your most labor-intensive projects until you can get out of the hectic spring season? Are you confident enough about getting these projects done even then to offer a modest incentive to reward their patience?
6 Crunch time means longer hours, longer days. Remember when you started your business and worked six 10-hour days on a regular basis? (Perhaps you still do.) Can you count on your remaining employees or those you hope to add to work six 10-hour days to make up for your labor shortfall?
7 It might be time to consider raising prices to cover the rising cost of fuel and almost every other product or material you use. Yes, raising prices is a tough call. But overtime costs may force your hand because you will have fewer employees doing more production. Keep in mind, few of the small owner/operators in your market use H-2B workers, so they’ll see your scaling back as an opportunity to pick up some of your business. The same goes for larger established companies that have their full compliment of labor. Combat this by doing great work and stressing value, value, value.
8 Mechanize for more efficiency. This doesn’t mean going out and buying equipment that you may use occasionally. It may not mean buying, at all, but rather leasing or renting. Resist impulse purchases. Unfortunately, there’s no piece of commercial equipment yet that can mow a property, load itself onto a truck and go on to mow the next property. The same goes for stick trimming and cleanup. But tasks like mulching and most construction tasks can be done more efficiently with the right equipment.
9 Unload your junk. How about unused or rarely used equipment in your maintenance yard? Is it just taking up space? The same goes for unproductive or unreliable employees? Are they just taking up space and, worse yet, costing you money? It’s tough shedding people when you’re already short-staffed? But it’s worse to carry dead weight or a troublemaker.
10 Get the “help wanted” word out. The slowdown in the construction trades means there is a growing supply of work-tested employees without regular paychecks. How can you make your job descriptions attractive to them? Chances are you’ll have to pay them more than you used to paying.
The ripple effect
Unfortunately, the labor shortage that many companies expect will create a big ripple in the entire industry — from customers to product manufacturers.
“I can’t conceivably utilize capital to add equipment, when I don’t know if I’ll have people to use the work. Our purchasing budget has been zeroed out. We will only buy on an emergency basis this year. That’s where the negative effect is going to be on the economy.
“The effects are going to be felt beyond the landscape to many different segments, including suppliers and estate management. Things like this are really hard to calculate at this point. It’s going to be the most challenging year I’ve had in the business in probably 30 years.”
Many of you in the landscape services industry have faced larger challenges and have succeeded anyway. The approaching shortage of workers is a crisis that will test your creativity and resilience. By building and implementing a plan now, you can still have a strong 2008.
— The author is a certified landscape professional and manages an East Coast landscape operation. Contact him at
cs@charlessimon.com.
