Navigating business challenges isn’t easy for any company this spring, but as an industry, we are doing a lot better than many others. NALP surveyed landscape industry companies, the week of April 6, to learn how COVID-19 is affecting their business (and also to learn how we can provide the best resources to help weather the storm). So, how does your company stack up this spring, and what does this mean down the road?
COVID-19 Revenue Impacts
Lawn care companies are doing well this spring, a whopping 42% have seen their sales hit or exceed their targets, while only 8% of companies report 10-25% lower sales, and another 8% have seen sales 25-50% below expectations.
Design-build firms saw the most significant drop in sales – 33% said they’d seen a 10-25% drop in sales, and another 22% have seen a 25-50% drop in expected sales; while the largest percentage of landscape maintenance firms (36%) reported a more moderate 10-25% drop in sales.
How Are Contracts Affected?
So, how have clients responded to economic uncertainty? More than half of most companies’ clients have decided to alter their service to some extent by either canceling, cutting back, or postponing work.
Lawn care companies faired the best, with all respondents reporting 25% or less of their clients asking for a change to their contracted services.
The good news for the landscape maintenance sector is that 56% report none of their clients have canceled contracts, and approximately half the companies reported cancellations, services reductions, or postponements from less than 25% of their clients.
Design-build companies report the greatest impact from clients postponing work (only 11% reported no clients delaying work) 64% percent of companies have had up to 25% of clients postpone, 6% had 25-50% of clients delay work. Another 18% have had more than 50% of clients defer work.
How Concerned Are Clients and Employees?
Public fears around COVID-19 vary. When asked whether any clients have expressed any concern about having contractors on their property; 46% of landscape maintenance and 39% of design-build companies said they’ve had one or more clients express some concern; while lawn care companies reported no anxiety from their clients.
Staffing During COVID-19
This has to be one of the most unusual spring seasons when it comes to hiring. Unemployment is soaring, but unemployment benefits are also higher, and they are being paid longer than usual. At the same time, the H-2B program faces ongoing challenges with delays in processing, issues crossing borders and an indefinite delay of the 35,000 additional visas that were supposed to be released in April. In light of economic strains and high unemployment, the H-2B program will face increased scrutiny and challenges for the foreseeable future. As a result, most landscape industry companies found it about the same or harder than normal to hire workers this year, with design-build firms having the hardest time.
Amid the issues with hiring, many firms have had to lay-off or furlough workers because clients have canceled, cut back, or postponed work or because companies can’t work because of state orders or have chosen to cut back on services during COVID-19. Design-build firms have had to initiate the most furloughs or lay-offs (44% of companies did so); 25 % of lawn care companies have done the same, while only 17% of landscape maintenance companies have had to lay-off workers.
What Does It All Mean?
What does all this data point to? There is a strong need for landscape and lawn care services, and if the stay-at-home restrictions don’t go on for that much longer, people can get back to work and the spring/summer season will ramp up. That’s great news for the economy and for landscape industry companies. But, then a new pressure will set in – the pressure to staff up and service the many clients that postponed work or cut back on landscape services. In anticipation, NALP’s workforce development team is working on new campaigns to attract the recently out of work to our industry.
Industry companies were resilient and adapted during the 2008 recession, and all signs point to the same sort of recovery this time.