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As Arizona economic gears grind anew, new lessons learned in a post-pandemic marketplace

An Independent examination of doing business amid COVID-19

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New rules and trends are emerging for doing business, running a business and managing the people of a business in the Phoenix area as both proprietors and the employed begin to look beyond doing business amid the COVID-19 pandemic.

It is estimated 2.9 million Arizona residents are receiving some kind of aid through the Department of Economic Security, which has seen situations exacerbated because of the global public health concerns at times halting all commerce activity here in the Valley of the Sun and beyond.

The dramatic overnight shift to what many would call a “gig economy,” where people work myriad jobs without security or employment rights, propped up through federal aid programs has created a clear division of winners and losers in the 21st century that may begin to exist beyond COVID-19 restrictions.

What is happening across the nation is happening here in the Valley of the Sun but what is different, experts say, is it is fueled by explosive population growth, a determined focus on cultivating a shared economy and a need for a diversified, skilled employment base.

From the perspective of a local CEO running the day-to-day business amid navigating unchartered pandemic waters to a local thinker focused on the next chapter of the Arizona economy, Independent Newsmedia offers an examination of how the employment marketplace is destined to evolve.

“I think from a traditional employment situation, you are going to see a large portion of employees who are going to continue to work from home,” said Charles Jackson, president of the Association for Entrepreneurship.

“That will be easier for employees and a little more difficult for employers, where they often see the presence of the employee as a sense of control no matter whether or not they are efficient. The pandemic has forced employers to view this relationship differently — the results have been more positive than anyone would have thought.”

But as new rules and trends have blossomed for those with technical skills the opposite effect is occurring in various other sectors of employment most strikingly the service industry, experts report.

“I don’t look at in terms as winners and losers, I think of it more in terms of thinking of it as how we benefit from it and there are more business opportunities being developed, but there is less need for mall space and certain grocery store items,” Mr. Jackson said.

“There has been a change and there will continue to be some changes, but there may be some snapback to how things once were. We are social in nature, we do not want to be sequestered at home.”

But for many, the billions of dollars being pumped into unemployment benefits across the nation has created a glut of jobs. Here in Arizona, DES provides $4 billion annually to various levels of social and unemployment services.

“The service industry is anything not being sold as a product,” Mr. Jackson explained

“That would include insurance sales, your investment broker — anything where you are not purchasing an item. Even retail to a certain degree. I think the service industry is and will continue to use technology a lot more. The smartphone has allowed the smart gig economy to coordinate efforts.”

Mr. Jackson offers a scenario where 50% of American employees will be working from home.

“Those who are responsible will have no problem,” he said, noting that as Americans emerge from pandemic precautions some new trends and rules are here to stay.

“Those who have just skated by and moved with the winds may have more of a challenge. We just need to have a clear understanding that the information coming to us is neutral.”

A view of employees at work for Caretaker Landscape and Tree Management, which is based in Chandler.

Doing business in a pandemic

Navigating unchartered pandemic waters is Phoenix CEO Matt White, who oversees Caretaker Landscape and Tree Management, which is an all-inclusive commercial landscape service provider.

“Caretaker Landscape and Tree Management offers full-time employment within our six divisions for more than 400 individuals year-round, between our Arizona and Colorado markets,” Mr. White told Independent Newsmedia.

Since 1988, Caretaker has provided a suite of services including landscape maintenance, tree management, landscape construction, water management, enhancements and design, and snow and ice management in its Denver market.

Mr. White explains the above services are skilled-labor intensive and as the pandemic emerged, so did new problems to meeting client needs.

“Although we were deemed an essential service at the outset of the pandemic, the pressures of the mandates and the public and government concerns on the impacts of the pandemic created unique challenges to our labor constraints last year,” he outlined.

“Most of our labor issues were highlighted in our landscape construction division, where we scale up and down throughout the year, depending on the schedule of the contracts. We were poised at the beginning of 2020 to have a great year and had all our labor necessary for the contracts we had in our backlog. We expected to get H-2B {Visa} labor in late March 2020, which has been normal over the previous five years. However, in March the borders were closed so we did not receive that labor.”

Mr. White illustrates a scenario where any strategy conceived would have to be fluid given the constraints of both the housing and employment markets.

“We had many clients who put holds on certain landscape revenue streams, which required an unknown short-term reduction in labor,” he explained of those uncertain times.

“Then, after the May housing numbers came back extremely strong, we needed to hire again. In a somewhat counterproductive measure, actions were taken that increased the difficulty of our hiring efforts. We had over 100 open positions through the summer months. Our Q3 labor improved dramatically and we ended the year with the most employees we’ve ever had and that continues today.”

From the top looking down, Mr. White explains work going unfilled ended up creating a missed opportunity because of COVID-19 pandemic precautions.

“Certainly through the second and third quarters we were struggling to keep up with our backlog,” he said.

“To meet all of our overhead and shared services staff wages and salaries, we need to hit a certain revenue threshold. Due to the labor shortage, we were unable to do that, which put immense downward pressure on our top line directly and negatively affecting our bottom line.”

Managing a world of uncertainty

Patricia Meyer, Caretaker’s director of human resources, says changes to how the organization did business were rapid, necessary and continue today.

“In my perspective, the issues employees are currently faced with are learning how to manage in a world of uncertainty due to COVID-19 and the challenges it brought,” she said. “Leadership quickly adapted traditional workplace practices to remote management. Employees overcame the challenges of navigating a full-time work-from-home schedule while caring for dependents of all ages.”

Aside from maintaining flexibility for employees, the outside pressures of living amid a global pandemic created new challenges that had to be overcome, Ms. Meyer explains.

“The unexpected closures of on-site care facilities where they would normally have the access required flexibility among management and team members. Sales employees were confronted with limited travel and face-to-face contact, requiring to approach selling with a more creative process,” she said. “Although the status of being an essential service gave employees a sense of security, the cause and concern of daily interaction during the height of the pandemic brought about a sense of fear for contacting and exposing their household.”

According to Mr. White, when it comes to providing quality service, that service is only as good as those who administer it.

“When you have an expectation of high-quality service that is largely labor driven by a passionate team, any labor constraints are very difficult to deal with. We implemented myriad strategies to attract and retain our staff. We increased wages across the board and increased spending on training and a career path, all of which increases costs that are very difficult to pass on to our customers.”

But make no mistake, this is not Mr. White’s first rodeo.

“Having the operational discipline to follow the processes to achieve a particular outcome can be difficult for all managers, but I’m proud of our team and how they prevailed,” he said. To broadly increase the benefits of unemployment creates unintended consequences and potential exploitation of the unemployment system. I believe a more focused approach on who qualifies and what markets qualify for additional benefits would be a much more effective implementation for an effective program.”

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