Business Tip – June 2016

mapei_sponsorThe Affordable Care Act: is this the calm before the storm?

By Pat O’Connor, Kent & O’Connor, Washington, D.C.

There is a lull of sorts in Obamacare angst these days. No momentous Supreme Court decisions in the offing. No serious repeal efforts in Congress. It even seems to have faded on the campaign trail.

And, so far, businesses have weathered the initial stages of The Affordable Care Act (ACA) fairly well. Six years after passage, the predicted exodus from employer-provided coverage has not materialized. In fact, according to the RAND Corporation, of the 16.9 million newly-insured people between September 2013 and February 2015, the largest source of new coverage was employer-sponsored plans! (1) And, among companies with 50 to 499 employees, some surveys show 99% offer health insurance to employees. (2) Even the smallest employers (those with fewer than 50 employees) reported an increase in the number of companies offering health insurance (from 51% in 2013 to 61% in 2015). (3)

Does this mean the fear and loathing of the ACA/Obamacare were overblown?

No, probably not. These numbers may simply reflect the fact that health insurance continues to be a valued benefit to attract and retain talented employees. Companies still want to maintain coverage despite the costs and complexities added by the ACA.

These numbers also do not look at the extent to which the ACA has skewed business decision-making. Some companies have refrained from hiring additional people to stay below the 50-employee threshold or cut worker hours to lower the number of full-time employees. Keeping the headcount low through outsourcing is a prevalent and often necessary small business strategy that can be expected to continue. The impact on individual companies or the economy as a whole is difficult to measure, but unquestionably this has added to the anxiety over Obamacare among small businesses.

Yet, on the whole, has the business community simply adapted? Are we now on a smooth path after a bumpy start?

Not likely. For one thing, the government has not actually assessed employer penalties, but they will begin doing so very soon. Even though the vast majority of subject companies do provide health coverage, we have yet to see how the penalty process will play out for companies with insufficient or unaffordable coverage. For implementation of the penalties, we are relying on the IRS to reconcile the millions of reporting forms that were only recently submitted by employers, insurers and exchanges. No doubt, more rough patches can be expected when penalty notices hit the streets.

Nor are the ACA marketplaces anywhere close to being stable. Conversations about sizeable increases in 2017 insurance premiums are already starting. Many small businesses rely on the individual exchanges as a means for ensuring their employees have access to affordable coverage. Other small businesses would like to see the SHOP (Small Business Health Options Program) exchanges live up to their intended promise as a source for affordable employee coverage for small companies. This is unlikely, however, without greater stability in the individual ACA exchanges.

Last year, we saw half of the non-profit health co-ops on the individual health exchanges fail. This spring, the nation’s largest health insurer, United Healthcare, announced they will leave all but a handful of the nation’s exchanges in 2017 due to expected losses of more than $650 million on its 2016 ACA plans.

The United Healthcare announcement is revealing. Unlike the failed nonprofit co-ops last year, many of whom charged unrealistically low premiums and failed to apply prudent business practices, United Healthcare approached the exchanges with great caution. The for-profit insurer mostly sat out the first year to gain a better understanding of the risk profile of exchange enrollees so they could more accurately price their policies. With shareholders to answer to, United took careful measure to avoid any losses.

What they discovered, however, was lower-than-hoped-for-enrollees and sicker-than-expected customers. Plus, loopholes in the exchanges allowed people to enter and leave the system only when they needed healthcare. United attributed their massive losses to the smaller overall market size and the “shorter-term, higher-risk profile” of enrollees. In a conference call last November, United’s CEO told shareholders: “We cannot sustain these losses. We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

Some see the United Healthcare departure as the canary in the coal mine, a harbinger of more troubles ahead for Obamacare. Others downplay the significance. At the very least, we know competition will be severely limited in about 10 states, mostly in the South and the Midwest. Most notably, unless a new entrant appears, Oklahoma and Kansas will have only one insurer selling plans on their exchanges.

Other factors will impact premium costs on the ACA exchanges in 2017. The ACA established temporary risk-sharing and risk corridors to assist insurers offering ACA-compliant plans so the insurance companies could charge lower premiums and attract more enrollees. These subsidies to the insurance companies will end January 1, 2017, placing even more upward pressure on premiums.

All of this has some pundits warning that 2017 may be the year of reckoning for the Obamacare exchanges – the year when high premiums push the healthiest participants out, leaving insurers with the costliest enrollees, causing still higher premiums in the following year, the so-called “death spiral.” While that may be an overly dire prediction, Larry Levitt of the nonpartisan Kaiser Family Foundation says there will likely be “a significant market correction over the next year.”

Fortunately, employer-provided insurance markets experience much greater stability than the ACA marketplace. Nevertheless, upheaval in the ACA markets can spill over to the broader marketplace, causing uncertainty and higher costs.

We will know soon enough whether 2017 is indeed the cliff that sends Obamacare tumbling or just another painful step in the evolving drama of health care reform.

(1) Trends in Health Insurance Enrollment, 2013-2015, published in Health Affairs, v. 34, no. 6, June 2015, p. 1044-1048.
(2) Transamerica Center for Health Studies, Survey: Companies Navigate the Health Coverage Mandate, December 2015, www.transamerica centerforhealthstudies.org.
(3) Ibid.

Pat O’Connor is a principal in Kent & O’Connor, Incorporated, a Washington, D.C.-based government affairs firm. A veteran of Capitol Hill with particular expertise in health, transportation and the environment, O’Connor works with trade associations and companies to find workable solutions to the most pressing regulatory and legislative issues. For more information, visit www.kentoconnor.com or call 202-223-6222.

Business Tip – May 2016

SponsoredbyMAPEINTCA forms new bond with Spanish labor group Proalso

With the goal of sharing installation challenges as well as successful methods and standards, the NTCA has opened a dialogue with Proalso, the Association of Professional Tile Installers in Spain. NTCA president and Technical Committee chairman James Woelfel met with Proalso’s secretary general, Matias Martinez Trilles, recently during Qualicer, the world congress on tile quality, and Cevisama, Spain’s international tile show.

“With new technologies in tile and setting materials production, it’s more important than ever for labor groups to work together to ensure successful installations,” explained Woelfel. “We can learn from each other because of, and in spite of, differences in the way our countries handle construction projects because different perspectives and experiences will ultimately strengthen our work and our industry.”

Proalso is working with ASCER, Spain’s association of tile manufacturers, in developing their country’s tile installation standards.

ASCER’s Industrial Affairs director, Alejandra Miralles, said while most manufacturers provide brief guidelines for the installation of specific products, there’s an understanding among members of the Spanish Standardization Committee for ceramic tile and adhesives (AEN CTN 138), that cohesive installation standards are needed.

“We have tried to involve all parties, including installers, in the development of this work, since their input is vital to harmonize best practices and guarantee the quality of the tiling,” said Miralles. “ASCER also supports and highly respects the activity been carried out by Proalso in relation to certification and qualified tile installers.”

Proalso certifies installers through a program using two comprehensive training manuals. Yet Martinez Trilles believes much learning can be done regarding the development of installation standards. “Product standards are especially important, and the professional tile installer needs to know them in depth,” he said. “Nonetheless, we consider product standards are not sufficient to improve installation processes and to prevent defects or pathologies. It is most important that we are able to work together in the development of specific standards on installation that allow unifying global criteria on tile installation systems. In this sense, we find most interesting the work being carried out in ISO/TC 189 in relation to Thin Ceramic Tiles and Panels and on tile installation recommendations.”

To help Proalso understand the work the NTCA does, Woelfel gave Martinez Trilles a copy of the NTCA Reference Manual, which the labor leader found extremely practical and useful.

The meetings were facilitated by Javier Rodriguez Ejerique, Qualicer’s technical secretary, who invited Woelfel to speak about the development of industry standards in the United States at the world congress on tile quality in Castellon, Spain.

“It is important for manufacturers and distributors to understand that there are highly skilled installers available and willing to take on the challenges involved in the installation of new products,” said Rodriguez Ejerique. “For example, the difficulties of thin panel tile installation should prompt them to seek out qualified installers to recommend to architects to ensure job success, rather than allowing the project to forego technologically advanced products out of fear of job failure.”

Looking forward, Woelfel said he hopes Martinez Trilles will be able to accept his invitation to Total Solutions Plus this October in Palm Springs. “We need to continually find ways of getting manufacturers, architects, designers, distributors and qualified installers to the table for discussion on quality installation. This is in the industry’s best interest now and in the future.”

Business Tip – April 2016

mapei_sponsorSocial media: the new networking

(Editor’s note: Clearly, social media is a powerful tool to put you in touch with key people and audiences in your industry. In our Coverings issue, we had a story dedicated to social media, and this CTDA contribution continues the theme. The message is clear: get online, and get sharing, posting, liking, pinning and tweeting!)

Networking is crucial to the success of any organization. An especially important benefit of associations is the networking opportunities members enjoy. Networking used to occur mainly through social events, meetings, and small groups. However with advances in technology and the advent of social media, there are many more opportunities for networking and a multitude of possibilities for expanding your business’s network.

To ensure your business is taking full advantage of social media, your business should have a social media strategy, measurable goals and specific tactics.

Your company’s social media strategy ought to have the same organization as any other corporate strategy your company follows. Make your strategy #Specific. Set a clear image of what success looks like. Set #Measurable objectives to evaluate your progress such as “Increase our followers on Facebook by 50 this year.” Ensure your strategy is #Attainable and realistic to achieve within the time specified. Of course anything you do must be #Relevant meaning it should align with your company’s mission. Finally, your strategies must be #Timely – that is, you should assign a timeline for each .

One of the first tasks you will want to undertake is to understand the variety of social media platforms available to you and, of course, those that your desired audience is using.  Some of the current platforms to consider include: Facebook, Twitter, Instagram, LinkedIn, Pinterest, Houzz, YouTube, Yelp, and Google+.

Important social media measurements could include: follower (or participation) numbers and growth over time; increasing total impressions (views of your company’s profile by day); increasing engagements (messages, comments or check-ins from your audience); and increasing link clicks from your company’s posts. A great way to track your company’s success is through a content manager such as Sprout Social, Shareist, or Hootsuite. Also, Facebook offers its own free insights section on your company’s page.

When starting off small, you may want to consider setting a portion of time every day to spend managing your company’s social media. Start with responding to your engagements (good or bad) within 24 hours. Then focus on promoting something new every day, whether it be #MarbleMonday #TileTuesday, #WebinarWednesday, etc.

On those days when you are short on content and to refrain from being repetitive, have some days focus on others. Retweet on Twitter, comment, like or share on Facebook or repin on Pinterest.

The value of #hashtags

ALWAYS #hashtag. #hashtag – ing is an effective way to ensure your company’s post is viewed by the most people. The more views, the more followers and the more followers, the more FREE marketing your company receives. Strategically select a trending or common #hashtag to accompany your post. Also, pick one #hashtag that your company will use in all of its posts on all social media platforms; the more posts with that #hashtag, the better off your company is. Within the social media platform #hashtags are searchable, so if you use a hashtag like #CTDAmember with your Facebook post, anytime anyone searches for #CTDAmember, your posts will come up.

You’re not taking full advantage of #networking, if @yourcompany isn’t active on #socialmedia. Social media has evolved into so much more than reconnecting with your long-lost high school friends. It has become a way professionals connect with each other. Your business must not miss out on this unique #marketingtool which is mostly FREE.

To learn more about social media, join CTDA for our #CTDAWebinar on Social Media on May 19th with Shannon Vogel, director of social media, Creating your Space. Learn how to leverage your business and expand your networking opportunities. If you’re online, follow this link to learn more about CTDA Webinars; otherwise, enter https://www.ctdahome.org/content/education/webinars-list.asp into your browser. Webinars are free for members or a small fee per non-member company.

To learn more about membership, please contact [email protected] or to join CTDA, please visit our website at www.ctdahome.org. And don’t forget to like us on Facebook and Twitter @Ceramic Tile Distributors Association (CTDA).

Business Tip – March 2016

SponsoredbyMAPEIDo your people know the play? Practice the daily huddle to align your team

wally_adamchikBy Wally Adamchik, FireStarter Speaking and Consulting

It works for (insert your favorite quarterback here) and it can work for you, too. It is, perhaps, one of the most effective leadership and management tools at your disposal, and takes just a few minutes to execute. But it is rarely used. You should start doing it tomorrow. If you are already doing it, you should work to make it better. What is it? A daily huddle.

You need to tell your people things they need to know to do their job. They want to hear those things. Contrary to popular belief, there are employees at all levels and all ages who want to do a good job. Many of those who are disengaged feel that way because the boss is not communicating with them.

The daily huddle is a fine solution. And it can work in any industry. The concept is simple. Before the workday starts, you gather your team to deliver key information to align them for the day. Are there any special events/visitors/incentives? How about a key training or safety tip? Perhaps you will talk about production or sales targets for the day. All this information gives them direction and helps them to be more productive. You also might toss in some feedback about how things went yesterday. (While this is not a time to single out poor performers, you may highlight some wins from the day before.)

Make sure to ask for input and questions. If the huddle is a new concept for your team, people will be reluctant to share anything initially. But, over time they will see you are serious about the huddle and will work with you to make it better. I have seen, and participated in, huddles that were also a stretch-and-flex period to increase safety awareness and to warm up cool muscles before starting physical labor. It sends a strong message that the company is serious about safety when the boss joins in the huddle and the flex when he is visiting. I have also seen bosses blow off that part – and that sends a message, too! Communication is one of the keys to success in just about any endeavor. I have never conducted an employee satisfaction survey for a client in which the results indicated there was too much communication. In fact, over 85% of my surveys have indicated that communication from management is in need of drastic improvement. The huddle is a quick, easy and inexpensive way to fix a major problem.

Why it works

Let’s look at why it works. First, it is personal. No texting or email is involved. This is direct, eye-to-eye contact – still the most compelling form of communication we have. When we look someone in the eye we know we have their attention and we can see them understand our message. Also, engaging in eye contact shows people they are important, that you want to communicate with them. It conveys the message that you trust them enough to share this information with them. When you ask for their input, you are literally saying, “I want to hear what you have to say. I am interested in you and the value you contribute to our team.”

It comes down to trust and respect. And it educates and aligns people on key business issues. They feel like they are part of the team and they operate from a “we,” not a “they,” perspective. When I interview an employee and he speaks of his firm in terms of “they do… they say,” it makes me cringe. It is as if the employee does not actually consider himself part of the company, but rather some visitor who has little stake and even less affiliation or sense of camaraderie. Keeping people informed is your job. Setting direction is one of the primary roles of a leader. In the case of the huddle, the direction is short-term. We are not communicating the strategic plan of the company; we‘re merely stating the goals of the day.

What‘s the payoff? You get employees who are more motivated and educated to do the job. Does it always work? No, not every single employee may respond to the huddle – but most will. I can guarantee though that starting the day without a huddle insures a workforce that is uninformed and de-motivated. And not even the worst quarterback in the league would attempt that.

NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at www.firestartervt.com to NTCA members. Contact him at [email protected] to learn more about how the NTCA/FireStarterVT partnership can save you training dollars while improving your leaders at all levels.

Business Tip – February 2016

SponsoredbyMAPEI

The power of a single thought

steve_rausch

By Steve Rausch

It’s Saturday morning and I’m wondering: Can a single thought begin a snowball of momentum for yourself, your family, and co-workers? And is the timing of that thought key?

I’ll explain in a minute but first let me tell you two stories of senior marketing professionals who were given news about a recent re-organization. Neither was surprised that there was a re-org at this company, or that their role could be impacted.

The first was told her role would be eliminated. After the shock wore off, she decided to leave with the same integrity and positive outlook that she had demonstrated during her 30 years with the organization. She thanked the CMO and others who had been part of her journey. She committed to transitioning her work at the highest level of excellence and for the highest good of the company. She tucked in a trip to Hawaii for good health and continued to be available even after her official time had ended.

So what happened? She was immediately sought after to sit on boards, and when her former company threw an incredible party to celebrate her and her life-long contributions, she realized her relationships and reputation remained as stellar as when she was an employee. This was  a great asset for her next career phase, and held relief and enthusiasm for the team that stayed behind. They will not hesitate to reach out to her in the future for business opportunities because of how she exited. Her enthusiasm must have sent a tsunami of positive outlook to the team, much like a departing employee who is disgruntled sends a flood of negative outlook to those remaining.

Those of us living in Georgia just saw another example of this power when Coach Mark Richt of the University of Georgia Football team was released recently. Coach handled the transition in a positive and powerful way, praising the university, the football program, and even expressing understanding of the reasoning behind the decision yet disagreeing (obviously) with that decision. Coach Richt was picked up within a few days by another major university – University of Miami – and will, I’m certain, continue to provide young men with a positive and inspirational role model.

The second story also comes from that same corporate re-organization we discussed earlier. I had previously spoken to another marketing manager in another country of this company and he had shared his concern of the re-org. He had deep expertise in his field but he said he had trained up some of the finest professionals so if he was de-employed the business would be in excellent shape. I spoke with him six weeks later and the joy in his voice was so intense I nearly choked up. He wasn’t de-employed. He was given more responsibility and easier international travel. He said he was so happy that on Monday morning he woke up at 4 a.m. to get to the office by 5 a.m. because he was so excited to start his day! And this is a 30-year veteran with the company! No doubt, that enthusiasm was a contagious influence!

I was floored when I realized that I had uncovered what seemed to be a critical business principle – that smart people actually set up the reality of outcomes for themselves even if they don’t choose the situations in which they find themselves. And this wasn’t being a Pollyanna. I’m just an outside observer – a vendor – watching this unfold. No one was aware of or trying to impress me.

So I started to wonder, is there a critical moment in time when these people chose to be positive, optimistic and take the high road?  We all know plenty of situations, work and personal, of people who receive “negative” news and then let that news destroy their next phase in life, almost to a self-fulfilling prophecy.

I am certainly not a psychologist, but I came across a recent article that might explain the “how to” behind the positive response to build amazing life momentum. The article notes that there it is scientifically proven that the thoughts one holds in mind before going to sleep profoundly impacts one’s attitude and energy the next day. Positive, grateful thoughts prepare an individual to have a positive, energetic, day full of gratitude; worry thoughts wind up producing more worry upon awakening.

Now the people in the reorganizations mentioned above probably established their outlook early or over their entire life. But for those of us who worry or wonder whether or not to take the high road, perhaps this little exercise of controlling the single last thought before we go to sleep at night might tap us into the momentum that positive outlook brings! I certainly don’t see any downside of focusing on this and it seems to me the “upside” could be incredible. Let’s all try this starting today.

Steve Rausch has been involved in the tile and flooring business for over 30 years and is currently an industry consultant specializing in sales, marketing, and interpreting technical issues in understandable terms. You can contact Steve at [email protected] or 404-281-2218.

Business Tip – January 2016

al_bates

SponsoredbyMAPEI

Harpooning the whale, part I: a profit improvement report for distributors

al_bates

By Dr. Albert D. Bates, Profit Planning Group

Each year, Dr. Albert D. Bates, the president of the Profit Planning Group, prepares a Profit Improvement Report for CTDA. 

What follows is part one of this report, which he has titled “Harpooning the Whale.” In this section, Bates examines the Economics of Customers. In part two, which will appear in the April TileLetter, Bates will discuss Changing the Profit Relationship. 

One of the most widely-discussed topics in distribution today is the fact that a lot of customers and a lot of items lose money for the company. That is, the cost of servicing a large component of the customer set or handling many of the items is larger than the gross margin dollars generated by those customers or items.

While the economics of the situation are fairly straightforward, the implications for action are not. One widely suggested option is to eliminate items and customers that don’t cover their costs. It is a quick and easy solution.

Another option is to work on enhancing margins or lowering costs to overcome the profit deficit. This approach is both time-consuming and difficult.

Because the observations regarding customer profitability are largely mirrored by item profitability, this report will focus exclusively on the profit realities of customers for CTDA members. The report will examine customer profitability from two perspectives:

  • The Economics of Customers – An analysis of how customers break out into widely varying profitability groupings.
  • Changing the Profit Relationship – A discussion of how profitability can be enhanced by working with customers.

The Economics of Customers

Within every line of trade in distribution, including CTDA, there are wide variations in customer purchasing patterns. Some customers buy a lot of merchandise, others buy very little. Some customers are aggressive price negotiators while others are more service oriented. Finally, some customers are the proverbial “squeaky wheel” while others are easier to work with.

These factors come together to produce widely-varying levels of profitability across the distributor’s customer set. At one extreme, customers who purchase a lot of products, are service oriented (rather than price oriented) and don’t “have issues” tend to be highly profitable for the distributor. At the other extreme, some customers who are high maintenance actually result in a loss for the distributor.

Unfortunately, there are only a few of the highly-profitable customers and a fairly large number of the unprofitable ones. This relationship between customers and the profitability they produce for the distributor is often referred to as the “whale curve.” It is shown graphically in Exhibit 1.

Customers are ranked from most profitable to least profitable along the horizontal axis. The percent of total profit generated is presented on the vertical axis. The graph looks something like a whale, albeit a rather anemic one.

As can be seen, the most profitable customers cause total firm profit to rise quickly. Somewhere along the way the slope changes as additional customers generate profit at a lower rate. Finally, the curve starts back down as some customers cause the firm to lose money. Eventually the curve ends up at the 100% of total profit level.

BT-graphThe typical CTDA member generates $500,000 in profit. For that firm, the customers fall into four categories based upon the profit they generate for the distributor. The A customers are the most profitable and the D customers are the least profitable – the money losers.

The relationship for customers and profit tends to be a little more dramatic when put into tabular form:

BT-graph-2

The fact that the typical firm loses $225,000 on slightly more than one-third of their customers is not an inconsequential issue. Potentially, dollar profit could be increased by 45% through concerted effort.

Dr. Albert D. Bates is founder and president of Profit Planning Group. His recent book, Breaking Down the Profit Barriers in Distribution is the basis for this report. It is a book every manager and key operating employee should read. It is available in trade-paper format from Amazon and Barnes & Noble.

©2015 Profit Planning Group. CTDA has unlimited duplication rights for this manuscript. Further, members may duplicate this report for their internal use in any way desired. Duplication by any other organization in any manner is strictly prohibited.

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CTDA is always looking for ways to improve the benefits of membership. CTDA offers many benefits to members including:

• Education via a variety of programs that focus on training new employees, educating customers on tile shade variation, webinars on industry issues and more.

• Connecting with the industry through annual events like Total Solutions Plus and Coverings, and networking op-portunities through CTDA committee in-volvement. 

• National exposure for products and services for distributors, manufacturers and allied members.

• Controlling costs through discounts on a wide range of services from shipping to collection services, telephone charges, auto rentals and more.

• Staying informed on association and industry news and issues through a variety of communication vehicles and social media outreach.

• Managing opportunity through “snapshots” of the association and industry gleaned through regular surveys of vital business activities. 

For more information, contact CTDA at [email protected] or by calling 630-545-9415.

Business Tip – September 2015

stateemploymentmap

SponsoredbyMAPEIAGCA report: 2015 construction up in 37 states from July 2014

This month’s Business Tip checks in with the Associated General Contractors of America (AGCA) for a snapshot of what’s percolating in terms of construction activity across the country. Here’s the current report. – Lesley Goddin

Construction employment expanded in 37 states and the District of Columbia between July 2014 and July 2015, while only 28 states and D.C. added jobs between June and July, according to a recent analysis of Labor Department data by the Associated General Contractors of America (AGCA). Association officials noted that the construction industry appears caught between divergent economic trends that help employment in some areas and hurt it in others.

“Construction continues to grow overall but fewer states are participating in the expansion than was true a year ago,” said Ken Simonson, the association’s chief economist. “The uneven growth reflects the cross-cutting trends in the overall economy, as tight government budgets, plunging commodity prices and weak overseas demand lead to project cancellations in some states even while activity accelerates elsewhere.”

California added more new construction jobs (48,900 jobs, 7.3%) between July 2014 and July 2015 than any other state. Other states adding a high number of new construction jobs for the past 12 months include Florida (26,500 jobs, 6.6%), Washington (15,300 jobs, 9.6%), Texas (14,400 jobs, 2.2%) and Michigan (12,400 jobs, 8.7%). Arkansas (14.9%, 6,800 jobs) added the highest percentage of new construction jobs during the past year, followed by Idaho (13.7%, 4,900 jobs), Nevada (10.7%, 6,800 jobs), Washington and Michigan.

Thirteen states shed construction jobs during the past 12 months, up from only three with construction job decreases a year earlier. West Virginia (-16.0%, -5,400 jobs) lost the highest percentage of construction jobs. Other states that lost a high percentage of jobs for the year include Rhode Island (-7.9%, -1,300 jobs), Ohio (-7.0%, -13,800 jobs) and Mississippi (-4.3%, -2,100 jobs). The largest job losses occurred in Ohio, West Virginia, Indiana (-5,100 jobs, -4.1%) and Mississippi. Construction employment was flat in Vermont.

Florida (4,800 jobs, 1.1%) added the most construction jobs between June and July. Other states adding a high number of construction jobs include Oklahoma (3,000 jobs, 3.9%), California (3,000 jobs, 0.4%) and Arizona (2,400 jobs, 1.9%). New Mexico (4.9%, 2,000 jobs) added the highest percentage of construction jobs during the past month, followed by Oklahoma, Arkansas (3.6%, 1,800 jobs) and Oregon (2.9%, 2,300 jobs).

Twenty-one states lost construction jobs during the past month while construction employment was unchanged in Virginia. New York (-4,500 jobs, -1.3%) shed more construction jobs than any other state, followed by Indiana (-4,400 jobs, -3.6%), Ohio (-2,300 jobs, -1.2%) and Connecticut (-2,200 jobs, -3.6%). Indiana and Connecticut lost the highest percentage of construction jobs between June and July, followed by West Virginia (-2.4%, -700 jobs) and Minnesota (-1.8%, -2,000 jobs).

Association officials said that contractors in parts of the country where construction demand is growing report worsening shortages of qualified workers to fill available positions. They said that as demand for construction continues to grow, those shortages will only get more severe.  That is why they urged federal, state and local officials to act on the measures outlined in the association’s Workforce Development Plan.

“Education officials need to include high-paying jobs in construction among the career choices they encourage and help prepare students to pursue,” said Stephen E. Sandherr, the association’s chief executive officer.

stateemploymentmap

 

Business Tip – August 2015 “Green Issue”

wally_adamchik

SponsoredbyMAPEIwally_adamchik

Creating a sustainable culture for your business

 

By Wally Adamchik, president FireStarter Speaking and Consulting

 

 

A few years ago I was working with a large client to help plan their annual meeting. There would be over 1,000 attendees with mostly internal speakers who had worked to create the content.

One of the groups was assigned the topic of sustainability. After several months of planning and development, the steering committee met for a dry run. We were all caught off guard when the sustainability group presented sustainability in the context of people. They argued that if the company didn’t work hard to create a great culture that attracted and retained the best people it would not endure. It was hard to disagree. And here we are looking at sustainability in this issue so let’s take a closer look at sustainability from a people perspective.

In construction, sustainability starts with design. That’s no different with the people side of your business. Your firm has a distinct culture. Does that culture stem from a dedicated and deliberate effort or is it the result of inattention and lack of effort? Either option is a choice. Best-in-class firms make the choice to invest in their culture and make it a place people want to work.

With culture established, we now look to people. To create a sustainable culture where people stay for the long term you must be very intentional and disciplined in selection. The U.S. Marines are known for creating Marines from civilians. The better-kept secret is their ability in the selection process – during recruiting – to select people who actually want to be Marines. It is far easier to make a Marine from someone who wants to be a Marine than from someone who doesn’t want to be one.

We know construction is not a glamour industry, but that doesn’t mean we have to hire anyone who can fog a mirror. It’s not easy to find top-tier people, but it’s worth the effort. Maybe you find people in the second tier and work to make them top tier. Do you know the characteristics of the people who succeed in your company? Identify those traits and then find candidates who have them. What about referrals? Internal referrals from current employees are the best way to find qualified employees. Do you have a real, robust, and not cheap referral program?

Creating top-tier talent requires training and leadership. You cannot expect people to perform if they have not been trained correctly. In fact, inadequate training contributes to high turnover as people leave because they don’t feel like they can do the job correctly. All the training in the world though will not create great employees. It is a foundation to build on, but leadership is required to give people a reason to lean in and engage with their heart, as well as with their hands.

Another facet of sustainability is disposal. I hate to say it but sometimes we do need to get people off our team. Do you do this with dignity and respect or with an email on Friday afternoon? I know what you think you do but we have all gotten this wrong at least once in our life. The important part here is not that a former employee feels treated fairly and respectfully after being dismissed. The important part is that current employees see how you treat people and will not have the “they are going to wrong me like that someday too” feeling. There are many examples of firms that have downsized and morale increased because of the process they used and the way they involved people along the way. What is your process for insuring people walk out the door with their dignity?

In ecology, sustainability is about how biological systems remain healthy and productive. Achieving sustainability will enable the Earth to continue supporting human life. In business, a bigger view of sustainability, beyond products and processes, is to include people who will enable your firm to continue supporting profitable operations.

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NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at www.firestartervt.com to NTCA members. Contact him at [email protected] to learn more about how the NTCA/FireStarterVT partnership can save you training dollars while improving your leaders at all levels.

 

Business Tip – July 2015

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Benefits of international trade in the tile industry

CTDA members take a trade mission to Turkey
Contributed by CTDA staff

Thirty-four CTDA members recently traveled to Istanbul, Turkey, for an amazing experience they will never forget. The CTDA Trade Mission to Turkey gave members an opportunity to meet with Turkish manufacturers face to face, explore new trends in Turkish tile, visit showrooms, and network with each other. As the United States’ economy recovers and business in the tile industry picks up, distributors are looking abroad for the next great opportunity in tile. International business across all sectors has grown tremendously with advances in technology and a willingness to create a strong global economy.

Dr. Robert Mousettis, professor of International Business & Strategy, and coordinator of the Masters of International Business Program at North Central College in Naperville, Ill., explains that global markets are one of the most attractive reasons to conduct business with a world-wide view in mind.

BT-ctda-0715“In general, the international markets provide an opportunity to venture into untapped markets with enormous potential,” Dr. Mousettis said. “However, it is not easy; if it was, everyone would do it. It requires companies to be comfortable with complexity and ambiguity. It requires companies to have individuals who have exceptional intercultural skills, natural curiosity, flexibility, adaptability, and superb leadership skills.”

With major manufacturers all over the globe, distributors realize the importance of broadening their horizons to buy and sell products abroad. International business does not come without challenges. Dr. Mousettis cites differences in culture and politics as major obstacles to conducting business abroad. As CTDA members learned during the trade mission, understanding more about different suppliers by experiencing their culture first hand is one way to alleviate concerns and become culturally sensitive. Politics and legal differences can arise while doing business internationally so it is important to have a strong understanding and clear communication with business partners.

Imports increase Americans’ purchasing power and give them access to products that may not be available in the United States. The tile industry is full of opportunity for collaboration between countries that excel in creating quality materials demanded by educated consumers. International trade in the industry can also broaden distributor and retailer horizons on how to display, use and promote tile in local markets.

To learn more about the CTDA Trade Mission to Turkey, please visit the CTDA blog (tiledealer.org).

Business Tip – June 2015

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NTCA makes apprenticeship and career development a top priority with web-based Learning Management System

By Dan Welch, Welch Tile & Marble, NTCA Apprenticeship Committee chairperson (Ed. note: This article is a follow-up to the story about the expansion of NTCA educational efforts with CEFGA and MiCareer Quest as reported in May TileLetter’s Benefits Box section. That May story introduced the idea of a Career Development Matrix, which is explained in greater detail here.) The daunting task of updating the existing NTCA apprenticeship manuals and transferring the information to a web-based Learning Management System (LMS) is under way. This Apprenticeship Committee began in San Antonio, Texas, at Total Solutions Plus where I again opened my mouth during a Training and Education Committee meeting and found out that this thought was a common concern and needed a chairperson. As the newly-appointed chairperson I set out to find an easy way to transfer information from the elder employees to the new millennials. BT_matrix_0615A Career Development Matrix idea was spawned during a post company-meeting event. The basic idea was to build a path easily understandable to the young men and women in our trade, linking the job title to the job duty and connecting it to a value or wage increases. The matrix is categorized by Orientation, Task, Skill, Knowledge, and Management. It can be used for personal career growth by an individual, or for a company to use to develop its people and personnel. A matrix shown to me on a YouTube video that night (Crazy/Hot Matrix) fit what I was thinking and the rest is history. Currently it’s in draft stage and is being honed and perfected.

Why an LMS? Apprenticeship development within a working company is tough to implement, and there are several obstacles to overcome if you plan to execute this within your organization. Welch Tile & Marble started a Department of Labor-approved program in 2005 with the help of DMI from Birmingham, Ala., and updated the program in 2008. The first class to go through the program was eager to learn and to improve their earning potential, but the energy it took to set up a class at night and come up with the lessons and hands-on training was exhausting. These are some obstacles to a traditional apprenticeship program:

  • Time out of busy schedule
  • Canceled class time
  • Lesson-plan development
  • Employee engagement
  • Absent employees
  • Out-of-town workers
  • Make-up class
  • Outdated materials
  • Multiple classes needed Apprentice 1, 1a, 2, 2a, 3, 3a training at the same time
  • Cost
  • Employee financial reward upon completion
  • Economy

The LMS is a must-have for two reasons. First, Welch Tile & Marble has 10 years of experience proving that implementing an apprenticeship program isn’t easy. Secondly, the new generation uses the internet for everything and grew up with instant information access. The vision and mission of the Tile Contractors Apprenticeship and Career Development Program is as follows:

  • Vision: A dedicated investment in developing tomorrow’s leaders .
  • Mission: Communicate, educate, evaluate, compensate, and cultivate the future generations of tile professionals through safety, productivity, passion and critical thinking.

Course Description

The Tile Contractors Apprenticeship and Career Development Program is an organized process designed to:

  • Communicate position descriptions, requirements, duties and responsibilities, measures of performance, and expectations.
  • Establish wage and benefit expectations nationwide.
  • Define career paths for all areas of the tile trade.
  • Develop tasks, skills, knowledge, and management modules to install tile successfully.
  • Provide educational tools, limit risk, and maximize productivity through technology and a positive environment.
  • Evaluate using training modules and certifications.
  • Cultivate passion and culture.

Pay for performance

Pay for performance has always been our belief: provide a good day’s work for a good day’s pay. So how do we provide this pay and who is going to identify what is good? Each market segment, region, work category, and job classification offers a different set of guidelines for what the market will bear and what each company’s core project business operations can offer. This draft is just that, a draft of what an average could be with a market that is diversified. For a company offering a service that is considered a commodity, the cost of doing business is very slim. The workforce is well trained to provide a limited skill with very little flexibility in what they can make available to the end user outside of the core competency. The result is lower pay. For a company offering a service that is considered a specialty, the cost of doing business is larger. The workforce is well trained in multiple areas and has the ability to do projects that are challenging and outside of the norm. The result is higher pay. I hope you are as excited as I am with the Tile Contractors Apprenticeship and Career Development Program and our industry’s attempt to attract new talent, build on their strengths, and move this industry forward. Stay tuned for periodic updates on the progress of the web-based Learning Management System, The Tile Contractors Apprenticeship and Career Development Program, and the refinement of the accompanying Career Development Matrix.

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