Austin, Texas—Starnet, the world’s largest network of full-service commercial flooring contractors, kicked off its fall 2022 conference here earlier this month. The event, the follow-up to its spring meeting, welcomed scores of contractor members and vendors for timely educational and networking opportunities.
The theme for the convention was “Keys to Success,” which plays on the “piano key” imagery and the rich musical heritage of Austin. As Mark Bischoff, Starnet president and CEO, explained during his opening remarks: “We are in the live musical capital of the world. All the content that you will be exposed to here is going to focus on workplace culture, talent management, maximizing productivity and how you strengthen and scale all of that through the deployment of technology.”
Starnet, for its part, is looking to give members all the tools, opportunities and direction to achieve success in these challenging times. To that end, the group identified three emerging issues that dominated discussions at the conference: talent development, productivity and technology. “Everything was wrapped around those three themes,” Bischoff noted. “They’re not isolated but different focuses because they’re interrelated. Long term, those are also initiatives for our organization.”
Two of those themes (talent development and productivity) were at the core of the keynote presentation by Andrew Oxley, national recognized speaker, executive coach and founder of The Oxley Group. During his presentation titled, “Uncomfortable—Becoming the Leader Your Team Needs to Win,” he talked about the challenges business owners face today in recruiting, mentoring and motivating their employees. It’s a critical issue, he noted, during a time when finding good, talented labor is a challenge.
“For many businesses today, profit is their first order of business,” Oxley told attendees. “However, that shouldn’t be the purpose of your business—otherwise, everything you do just becomes transactional.”
While Oxley concurred that people can be complicated, he said the process of hiring and managing them should not be complicated. In other words, “Don’t make the purpose of your business complicated; otherwise, you won’t get your employees to buy in,” he said.
To drive home these points, Oxley shared sobering statistics that showed 4.5 million workers quit their jobs in March 2020—an all-time high. Fast forward to today, roughly 73% of workers say they are actively thinking about leaving their jobs. More importantly, the number of job openings in the U.S. as of March 2022—two years after the start of the pandemic—totaled 11.5 million.
Oxley also advised business leaders to be more open to the younger generation when looking to fill open positions in their company. “Young people get a bad rap today,” Oxley noted. “Remember, young people are going to be the biggest component of your business in the near future.”
To prepare for this demographic shift, Oxley advised business owners to seek to better understand how the young generation thinks and operates. “They want to be heard and feel they genuinely have a stake in the success of your business,” he told attendees. “That’s why it’s so important to have meaningful dialogue with your people.”
For many Starnet members, hiring and recruiting remains a big issue. “Andrew Oxley’s keynote reflected on the post-COVID-19 work environment and what the younger generation is now looking for, culture-wise, in their jobs,” said Chuck Bode, Starnet chairman of the board and owner of CB Flooring, a Columbia, Md.-based commercial flooring contractor. “There is no doubt that the installation workforce is aging out and that our industry needs to recruit a new generation of installers.”
Randy Rubenstein, owner of Rubenstein’s Contract Carpets, Seattle, Wash., concurred. “We have the same hurdles that everyone has in the talent acquisition business, so we’re all learning how to make progress in the new world order of filling our staffing needs. We have started to recruit at the high school graduate and trade school level by participating in job/trade fairs and reaching out to the counseling personnel who are in charge of directing their student body who are not interested in college at this point. We’re meeting with some favorable response.”
It’s not just installer positions that need filling at Rubenstein’s. “Filling office staff positions is equally as challenging, and we are having problems getting audiences with qualified personnel, regardless of whether they come from online solicitations or employment agencies,” he explained. “We find the most success with internal leads from our existing personnel.”
Grassroots efforts
The biggest hurdle in recruiting the next generation into the flooring industry, Starnet executives say, is messaging. To generate interest among potential employees, it’s important to convey to newcomers that they can earn a decent living in the flooring business. “Almost anyone can come into the industry and make a very good living in lots of different roles—whether it’s installation with your hands or just being in the sales side or management side of the business,” Bischoff noted. “I think there are a lot of opportunities.”
The industry’s main challenge in this regard, he said, has always been public relations. “I’ve heard from the veteran members and veteran board members that in the end they felt like Starnet could influence it, but the action has to happen locally,” he explained. “We continue to see success stories around attracting and retaining both physical labor talent and general talent over and over again, member by member. Our role is to remind the members of the best practices where they can tackle it themselves. Members are the best at articulating their own culture, mission and vision. All we can do is give them the tools and the framework to support their success.”
One way the commercial flooring co-op is doing that is through its Starnet University—a portal that helps support and provide members with a platform to support their onboarding processes and career development for their employees. “Surveys show that many owners think it’s about pay and retaining employees, but a recent McKinsey report revealed that the No. 1 issue is professional development for employees,” said Rob Starr, director of marketing and member services at Starnet. “Through the Starnet University, we can make an impact in terms of organizational standpoint by providing members with valuable resources. But it’s a team effort. Contractors still have to do the job at the local level, but there are programs and resources to help support our members.”
Additional developments on the technology front include behind-the-scenes work Starnet is doing to help members build and maintain their web sites. A key focal point moving forward is incorporating advanced room visualizer technologies to help members showcase their abilities and close more bids.
Positive momentum
Participation and membership activity within Starnet—a member-owned organization—shows the group is providing value to its base. This is not only reflected in the stability of its membership (175 shareholders representing 398 servicing locations) but also in the rate of new members coming on board. “The feedback has generally been positive,” Bischoff stated. “In the spring we had our big get-together and anniversary celebration, and the enthusiasm from the manufacturers and the members continued to be very high this fall. We were also very happy to see that we had a lot of new faces at the meetings—about 45 at this conference.”
The growth in attendance, according to Starnet, indicates that contractors are encouraging more of their key principals, project managers and sales reps to participate. “It was really refreshing to meet with the new members, and I think they got a good feel for what Starnet is,” Starr explained. “Just like flooring contractors, it’s in the best interests of our business to attract and retain customers. So it was really good seeing existing members embrace the new members in attendance.”
More importantly, many Starnet commercial contractors—particularly those that have diversified into different end-use market sectors—are bullish on the short-to-mid-term prospects. “Through the years, the members have seen enough highs and lows in the market that they’re pretty diversified in their approach and the products they offer,” Bischoff stated. “When the members primarily did carpet, broadloom, and VCT, there was a much more limited range of commercial environments that they would service and with a much more limited range of products. However, there’s been an explosion on the number of products they’re asked to install in every segment. Beyond that, I think they’re getting very savvy on how they approach the market as far as their mix with bid work and negotiated work and also the segments they serve.”
Take Consolidated Flooring, for example. The company services the corporate office market in both the New York Tri-State area as well as Chicago. At the same time, it does a respectable business in the K-12 education sector. “We are seeing a strong 4th quarter leading into a solid first half of ’23,” said David Meberg, president and CEO. Potential roadblocks, he noted, are continuing interest rate hikes and inflation. “The general consensus in our marketplaces is that there is a question mark right now on the second half of ’23.”
Out in the Pacific Northwest, Rubenstein’s is feeling optimistic. “2022 is going to finish up as another good year, and 2023 looks to be setting up similarly,” he said. “Backlogs continue to be at record levels, and work in the filed seems to be starting to move a bit more smoothly—although we still are fighting through the usual supply chain delays.”
CB Flooring’s Bode is similarly upbeat. “Most Starnet members have a very healthy backlog, most at record highs, heading into 2023. The consensus is that despite predictions of a recession, most Starnet dealers see a runway of at least a year installing this backlog and are predicting a good 2023. Beyond that—it’s anybody’s guess.”
(Look for more on the 2022 Starnet Fall conference in the Nov. 7/14 edition of FCNews.)