If you read last monthís Management Desk article, bear with me as I repeat some things for the sake emphasis and clarification. I want to re-emphasize the word that I think sums things up when it comes to this cycle that we are currently (or at least appear to be) pulling out of. As I see it, one reason why the downturn has lasted longer than the norm is that the time span of both the upturn and the downturn is necessarily proportionate. The downside is longer because the upside preceding it was longer. Both of them will ultimately prove to be proportionate to one another when compared with past economic cycles.
Furthermore, there is one more way that we can apply the word proportionate to our current situation. Nobody disputes the fact that this is the worst downturn since the Great Depression. If weíve heard that once, weíve heard it 100 times. What you may not have heard is that the upturn will also be proportionately worse than past upturns. The upturn we are (hopefully) facing will also be the worst upturn weíve faced since pulling out of the Great Depression. The worst upturn? How can an upturn possibly be bad? Iím glad you asked!
So whatís on the other side of ugly? Ugly! Well, letís call it the ugly side of beautiful.
You probably could have done without more ugly, couldnít you? Itís almost as though I can hear you wishing my words away, declaring "Say it isnít so.Ē Well, I could lie to you. Or you could also just nickname me puddle glum and a pessimist. But before you do, consider the possibility that Iím right in the middle of pessimistic and optimistic, which in my opinion is where I want to beórealistic!
There are two major problems in this industry: too much and not enough. Now, given the choice I would always opt for the former, not the latter problem. But either problem is nonetheless a problem. So "ifĒ we are beginning to witness an upturn, get ready to face another set of problems. Again, itís a set of problems I prefer when compared to the problems accompanying a downturn, but nonetheless very real problems.
If weíve just been through the very worst problems associated with a downturn and you accept my premise that the upturn and its associated problems will be proportionate, need I state the obvious? Get ready for what will be the worst-ever upturn in our careers, particularly when it comes to manpower. I donít care if you want to talk management or entry level employees and everything in between. Consider this magazineís editorís warning placed in the third paragraph of her February column of Whatís Inside: "We have been warning you that the labor shortage is a very real problem that is about to affect more and more contractors as they hold out for full backlogs before they start hiring. There will come a pointóitís only a matter of timeówhen construction company owners who want to hire will have to acknowledge that many of the workers we had in the industry in 2008 have found other occupations or careers outside of construction. And many of the immigrants, illegal or otherwise, went back to their home countries when the jobs in the United States dried up. So the manpower you were accustomed to just five years ago no longer exists Ö .Ē
I want this article to be more about solutions than problems, yet Iíve necessarily and intentionally taken two columns to preface the point Iím about to make. Rightfully so, since I donít know anyone who is interested in solutions to problems they donít believe exist. Hopefully youíre convinced by now that the upside is going to have a downside and that the downside is going to be just as difficult (in its own way) as the last 6 or 7 years. Ugly! Yes, it appears things are turning around. Beautiful! But dare not overlook "The ugly side of beautiful.Ē
For those of us subcontractors still surviving in Southern California (about 10 major competitors have already gone bankrupt, others have simply shut down), the state of the workforce and most businesses in our industry is a sad commentary of struggle and survival of the fittest. Profits have been beaten down to the point where they are either non-existent or extremely thin margins. Wages, although beginning to recover, hit lows comparable to the early 1980s, and we both know the cost of living is probably four times or more what it was then. Many of the individuals who made up our workforces have left the industry, relocated, in some cases retired. Apprenticeship and training of new personnel has been slim to none. Are you ready to face a significant shortage of manpower and a whole host of related problems? The answer: Probably not! The solution? Itís quick and simple: Get ready! Unfortunately it may already be too late. If thatís the case, thatís about as ugly as it gets. Yes, the ugly side of beautiful! More next month.
Doug Bellamy is president of Innovative Drywall Systems Inc. dba Alta Drywall, Escondido, Calif., where he is known for his proactive, innovative approach to our changing industry, and use of modern technology and cutting edge products and services.