Comeback from COVID

There may be another blizzard or two ahead for Iowans this winter season, but spring is right around the corner. Soon enough, everyone will be spending more time outdoors. Cold and flu season will be over. With new medicines available, the impact of COVID-19 will lessen. It may be a long time before life returns to prepandemic normal, but during the next few months, the light at the end of the tunnel will start to become visible. 

As more people become vaccinated, as more therapeutic treatments become available for COVID and as cases from the latest variant dissipate, businesses remain hopeful that employees continue to return to jobs and customers will likely return to favorite storefronts and shops. That’s the hope. 

Although the past couple of years have been far from a fairytale, manufacturers in Iowa are starting to see that light, too. According to the latest Iowa Association of Business and Industry (ABI) Quarterly Business Survey, 76% of manufacturers expect sales to expand during the first quarter of 2022. Half of the respondents expect to increase hiring and 76% plan to make capital expenditures during this quarter. 

“According to ABI members in our latest survey, the next months look quite positive,” said Mike Ralston, president of ABI. “Seventy-six percent expect increased orders and that same amount plan to make capital expenditures. This is big news for Iowa.”

HOW OPERATIONS CHANGED DURING COVID

The pandemic has changed the way many Iowa businesses operate. In some cases, employees were absent from or left their jobs, whether it was due to illness, early retirement or to take over child care duties. In other situations, if it was possible for employees to complete their work from home, most did. Businesses with employees working in the office were faced with the challenge of reorganizing work spaces to allow for social distancing. 

“I hear from lot of members that COVID has changed their operations in many ways, but two in particular,” Ralston said. “First, it has exacerbated their workforce issues. With folks being out due to illness or isolation due to exposure or the need to take care of family members, keeping employees on the job is even more difficult.”

Iowa companies have worked diligently to create safe workspaces for employees, he said. “ABI members want to ensure the safety of their employees and their families, but the pandemic has made workforce issues even tougher.” 

Another challenge of the pandemic is supply chain constraints. Companies are often unable to receive raw materials to produce products, and shippers have at times been unable to deliver goods.

“Due to factors caused in part by COVID, getting materials and parts is tougher than ever,” Ralston said. “There is no more just-in-time-delivery. If companies can find parts or materials at the right price, they buy them now and get them on their lot. They also keep more finished product on hand so that they can be sure they can fill orders.”

At insurer AssuredPartners, with 10 locations and 400 employees across Iowa, many things changed during the pandemic, according to Jack Carra, senior vice president of the company. They, too, shifted to remote work and applied safety measures at offices.

“We also adopted new safety protocols for those employees who do come into the office, including making PPE (personal protective equipment) available and rotating in-office days to allow for social distancing,” Carra said. “Our employees’ safety is top of mind, and it is important to us that they know that and feel safe coming into work.”

NEW TECHNOLOGY AND ITS RISKS

At AssuredPartners, the fifth-largest independent property and casualty broker and 11th-largest overall in the country, the company turned to technological solutions during the pandemic. 

“For an industry that is typically slow to adopt technology, we quickly got comfortable using new tech tools,” Carra said. “Remote work and reliance on technology – the same things that changed at AssuredPartners – have changed in our industry. We adopted quickly and found that our clients appreciated our guidance on establishing remote work guidelines and implementing new safety protocols.”

More globally, that shift by employers everywhere to technology and remote work settings has led to an increase in cybercrime, he said.

“Unfortunately, increased use of technology has resulted in a significant increase in cybercrime,” Carra said. “We are doing a lot more consulting on cybersecurity and working with our clients to build the right cyber program to help protect their business.” 

The insurance industry has experienced several supply chain challenges, as well.

“Labor challenges have slowed down manufacturing and distribution,” Carra said. “Cybercrime can have a devastating and direct impact on supply chain. Huge increases in the cost of raw materials force claim costs up, and when materials are more difficult to obtain, claim longevity increases.”

Claims have also increased, mostly due to larger, more frequent weather events across the country.

“There has been a big jump in claims, largely due to extreme weather. But it’s not just the number of claims that have gone up; claim costs have gone up tremendously,” he said.

The outlook, however, is bright, according to Carra.

“I believe it will be more of the same, but better,” he said. “Better because we’re getting more comfortable at adapting to constant change. Technology keeps improving, along with our ability to navigate a more dynamic environment. Like most, we’ve stepped out of our comfort zone, which is great. Being uncomfortable is a good thing; it’s a great way to challenge yourself as a professional to continue to grow.”

CHANGING SPACES

Not only have employers been changing workspace decor and layouts, but office furniture companies have also undergone changes, said Kim Augspurger, former owner of commercial interior company Saxton. During the pandemic, Saxton was acquired by a competitor, Pigott. It was one of many mergers and acquisitions in the industry in recent years, said Augspurger, who serves as a consultant to Pigott.

“Our industry has seen a significant number of changes due to the global pandemic. One of the more significant events for Saxton was when our major manufacturer, Knoll, was acquired by one of their competitors, Herman Miller, on July 19, 2021,” Augspurger said. “This set a number of industrywide mergers and acquisitions in motion. John Stenberg, president of Pigott, and I decided to join forces as a result of our manufacturers coming together.”

Furniture manufacturers have especially been affected by supply chain disruption, she said.

“The combination of labor and material shortages is putting pressure on our manufacturers. We are seeing price increases, longer lead times and larger punch lists on our projects,” she said. “We are working with our clients and alliance partners to allow more time to complete their projects, shipping product before we need it and developing contingency plans and options.”

With strategic planning, Saxton has continued to fulfill orders for customers, even as the company itself has transitioned to remote and remote-hybrid work.

“We are committed to keeping our staff safe, yet connected to the organization,” Augspurger said. “We have sent out a daily email to all staff to keep them connected. At first that communication was more focused on COVID-19, but now the communication is focused on celebrating all that we accomplished in a given day, the power of our core purpose and core values, as well as progress of our work.”

At offices across the country, there has been increased focus on workspaces, not just for social distancing but also to attract new workers to businesses. 

“People are a company’s most important asset, especially in a knowledge workforce,” she said. “Millennials will represent 75% of the global workforce by 2025. They place a high value on space, well-being and flexibility. As we all move toward a post-pandemic economy, the war for talent will be won by companies that create organizations and spaces where their people are inspired and able to thrive.” 

During the coming year, Augspurger expects to see more Iowa employers focus on layout and design as workers return to the office.

“We are seeing clients embrace a ‘people first’ approach to their space,” she says. “They are reimagining their space. It has more of a hospitality feel to it, with a lot of choice. Safety and employee well-being are top priorities.”

And as that demand for office furniture continues, so will supply chain challenges, she said.

“I think we will continue to see extended lead times, price increases and disruptions in the delivery process,” Augspurger said. “These issues can be minimized with good planning that includes contingency thinking and allowing time in the project schedule for what will surely be unexpected issues.”