Resilience, Innovation Keys for Navigating Business Challenges
“One of the questions that keeps me up at night is where do I find people?” Penmar Industries’ president and CEO Ed Rodríguez is not alone in his anxieties.
Workforce took a front seat again in the just-released 2024 Survey of Connecticut Businesses, produced by CBIA and Marcum LLP, with 78% of business executives reporting difficulty finding and retaining workers.
And when it comes to business investments, 46% listed employee recruitment and retention as their top priority.
“I thought this was impressive,” said Marcum LLP Hartford managing partner Michael Brooder, during a discussion at CBIA’s annual The Connecticut Economy conference Sept. 4.
“That means that is where they are spending the most money. And that’s double the second place category, which is what they are spending on facilities.”
Rodríguez, Tilcon Connecticut president Carolina Cavalcante, and Charles IT founder and CEO Foster Charles joined Brooder in front more than 420 private and public sector leaders to discuss their challenges and how they are problem solving to generate growth opportunities.
Seventy-three percent of surveyed business executives said their companies were profitable in 2023, beating initial expectations. Thirteen percent broke even and 14% posted losses.
Workforce Strategies
When Tilcon Connecticut used to post a seasonal job for March to November, Cavalcante said they would get a wide range of applicants and fill the job right away.
“The past two years we have had some of those jobs posted the whole time and never filled,” Cavalcante said.
She noted that the company established a number of programs with high school students, Connecticut’s Technical Education and Career System, and apprenticeships to support the future workforce.
“We’re also trying to be more creative, so we’re looking at a partnership with the Department of Correction,” Cavalcante explained.
“It’s been really looking at all facets of it and increasing our partnerships with different local organizations that have helped us.”
Of the business leaders surveyed this year, 18% are investing in internships and apprenticeship programs, the majority of which are paid.
Other employers (10%) said they are adjusting job requirements from education-based criteria to skills-based.
World-Class Training
Charles said Charles IT tries to connect with people who are about to enter the workforce and partners with local colleges, like Central Connecticut State University, to influence the curriculum.
But with his team growing quickly, Charles said the company also had to develop its own talent funnel.
While the company employed 40 to 50 people just a few years ago, its current employee count tops 150 people.
“We needed to become world class at training, recruiting, and mentoring individuals,” Charles said.
“So really focusing on them and how we grow them, making our own pipeline, was absolutely critical to us.”
Today, dozens of people apply to Charles IT’s 90-day training and development program.
The program puts people with little experience through intensive training, provides them multiple certifications, and at the conclusion offers many of them positions where they continue to train for an additional six months.
“Really what we’re looking for is just hungry, humble, and smart individuals, and the rest we can train,” Charles said.
Affordability
As Rodríguez pointed out, even those individuals can be hard to come by as Connecticut’s labor force—those working or actively looking for work—declined by 23,300 people since February 2020, while job openings increased 33% to 93,000.
Between retirements and people moving from state to state, business leaders agree keeping the next generation in Connecticut is critical.
They say that making the state more affordable for residents and business owners with “commonsense legislation” can address many of the state’s workforce challenges..
“I’m not competing against other Connecticut companies,” Rodríguez said.
“I’m competing with companies from South Carolina, from Texas, South Dakota, Wisconsin, states with less energy costs, less labor costs.”
He said legislation, such as a measure providing benefits for striking workers that Gov. Ned Lamont vetoed, takes confidence away from employers.
“We’re not asking for advantages, we just want a level playing field that says, ‘Look, we can compete here effectively and efficiently with the labor costs, the energy costs, and all the other costs that we have with anyone around the country,'” Rodríguez said.
Incentives
Charles detailed his ideas for providing financial incentives and credits to people who are new to the workforce, have student loans to pay, but are committed to living and working in Connecticut for a number of years.
“I don’t like more what’s seen as handouts, but what I do believe in is making sure that the investments in the state come back to it,” Charles said.
Charles and Cavalcante agree childcare affordability and access should be another focus, where the state partners with businesses and offers incentives to offset costs.
Like childcare, when business executives talk about affordability, healthcare is another common thread.
Rodríguez said his company is seeing health insurance premiums climb 10% to 20% year-over-year, leaving him with little options—lay people off or push more of the cost onto employees.
“That’s not just my business, that’s every single business in this room and in this state because health insurance costs are just out of control,” Rodríguez said.
Innovation
Business leaders are also leveraging technology and innovation to overcome challenges and compete in the global economy.
Charles IT is taking advantage of artificial intelligence, something Charles believes will spur the next wave of economic growth.
“My rule of thumb is if you can train somebody in a few days to do a specific job, it is probably highly repetitive and able to be automated,” Charles said.
He said he takes the employee doing that job and redeploys them to a different part of the business.
“I can redeploy my existing workforce, remove the redundancy, and then put them to do much more value producing things that will grow my organization,” Charles said.
In a very different way, Tilcon is also redeploying resources to save and compete.
Cavalcante said the company takes decarbonization and recycling efforts very seriously.
A renewable diesel fuel new to the Connecticut market is cutting the company’s carbon emissions for their fleet of trucks by 60%.
The company is also recycling asphalt from jobs into the new asphalt, which lowers the energy they need to use, lowers costs, and makes the process more efficient.
While they can do 25% recycled asphalt on some jobs, the state doesn’t accept more than 15% or 20% recycled asphalt into the mix.
“So I think there are a lot of opportunities,” Cavalcante said.
Opportunity State
While business leaders expressed frustration with the challenges they are experiencing, panelists showed a different tone when the conversation turned to Connecticut’s opportunities.
“Our quality of life here is extraordinary,” Rodríguez said. “And the way we grow and share with our neighbors is priceless.”
It’s why 33% of business leaders surveys listed quality of life listed quality of life as the greatest advantage to running a business in Connecticut, tied with proximity to customer.
“I think we’re heading in the right direction,” Cavalcante said. “We have people that want to create more opportunity within the state.”
Charles said it’s that quality of life and passion that brings people here, but getting them and businesses to stay requires a “stickiness factor.”
As he looks to grow his business and continue investing over a million dollars in his training programs, he’s often torn with the idea of going to another state where the business climate is more welcoming.
“I want something that is win win for the organization,” explained Charles.
“So if the state supports it, and says there’s a clear cost benefit here, give me the goal and I’ll hit it and I’ll continue to expand. Everybody’s happy.”
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CBIA IS FIGHTING TO MAKE CONNECTICUT A TOP STATE FOR BUSINESS, JOBS, AND ECONOMIC GROWTH. A BETTER BUSINESS CLIMATE MEANS A BRIGHTER FUTURE FOR EVERYONE.