Before writing this column in early December, I sat down with my CFO to discuss our anticipated year-end numbers. We have survived the pandemic, and 2022 in general. What does 2023 look like? We agreed there’s a lot of uncertainty.
I’m concerned, but I’m not losing sleep. I think 2023 is going to be a sluggish year. Still, we’re better off than we were in the Great Recession years of 2008 and 2009. The fundamentals of the economy back then were not nearly as good as they are now. In my market of Austin, Texas, unemployment is below 3 percent. Everyone who wants a job has one. I think individual incomes have come up — maybe not quite as fast as expenses, but people still have discretionary income. I think we have become more recession-proof than we were.
Setting a goal for growth
We manage by “the rule of 23,” the ideal sum of percentage of growth with pre-tax profitability. This year, we had 13 percent growth and 9 percent profit: That adds up to 22, but it’s still rock solid. I’ll take that every year if I could! For 2023, we’re shooting for a similar ratio, but this time with the sum of 23: 13 percent growth and 10 percent profit.
How do we plan to achieve this? For one, I’m not going to pull back on advertising and marketing spending. We’re going to stay aggressive and consistent. This is how we handled things back in 2008. We knew a lot of our competition would pull back, so we moved forward. That was around the time when we expanded into air-conditioning and plumbing, figuring people still needed these vital services regardless of their budgeting plans (and yes, in Texas, air-conditioning is vital!). I think that by keeping our foot on the gas, we were able to get out ahead of the curve. When the economy recovered, we were right there along with it, whereas many other companies had to regroup and catch up in growth.
Filling open positions
Again, I’m guardedly optimistic about the coming months. Our supply chain is so much better than it was a year ago, but I think we as an industry are struggling with hiring quality people. Had we been fully staffed in 2022, we could have achieved 16 percent growth. It was a good year, but I believe it could have been a great year.
In response, our company’s recruiting program has become much more targeted. Every week at our managers’ meeting, we report how many openings we have. We’re recruiting 24/7, regardless of how many job openings we have. If a quality candidate is interested in us, we will find a place for them on our team.
This year, we’re deepening our relationships with community colleges and junior colleges. I’m a member of the Texas Higher Education Coordinating Board. We are out there beating the drum that higher education can be more than a four-year college degree, and that the trades — pest control included — can offer a healthy income as well as rewarding career paths.
That last point is crucial. We as an industry must paint a picture for new hires of what their careers can look like in three, five, 10 or 20 years with us. If we’re just grabbing technicians to put out fires, with no plans on how to nurture their career paths with us, we should not be surprised when they leave.
Instead, our company has a mantra: We grow our own. Give us a person with a good attitude and we can fill in the rest with training. We almost prefer they don’t have pest control experience, so we can train them without having to address any bad habits they may have developed from previous jobs. If they’re hungry, humble and smart, we can guide them and put them on a career path so they stay long-term. Our managers are trained to help nurture that growth in every direct report.
Sure, it’s an investment of time, money and resources. But it’s paid us handsomely in employee loyalty and production quality. It’s very much worth the effort.