From Where I Stand — The Truth is Out There

Has A Phenomenon

crew leaders and general laborers for installation and maintenance. Historically, a lack of personnel at these positions is when the panic sets in. Almost every owner decries not being able to find a stream of designers, sales people, and account managers, but those are drawing from a different labor pool. The traditional labor paradox usually revolves around field staff.

Since 2019, the average wage for those positions has gone up: 17% for Installation Crew Leaders, 20% for Maintenance Crew Leaders, 20% for Installation Laborers, and a whopping 27% for Maintenance Laborers. In the past two years, in the same order, we saw increases of 7%, 11%, 14%, and 15% respectively. All of those increases have outpaced inflation over the two year and four year intervals (the complete survey results are available to ILCA members only).

I have now been working in the Illinois landscape industry long enough that my gaze has grown wider. My wavelengths are more interspersed and I am less reactionary than I used to be. I used to think the landscape industry had its own Fermi Paradox when it came to labor. There would never be a time when labor was truly plentiful in this industry because it would coincide with an economic downturn. That downturn would shrink the amount of work resulting in an oversupply of labor. When that downturn ended, the number of clients would go back up, the labor supply would drop back down, and we would be right back where we started. This was the life cycle of the landscape industry — horrific labor challenges that are only relieved by crushing recessions.

Then, the spring of 2023 happened. I start every spring talking to contractors about their labor situation. With rare exception, and for the first time since I started at ILCA, that question has been met with some variation of, “You know, we are looking pretty good.” This would then be followed by them searching for the nearest wood to knock on, salt to toss over their shoulder, or rabbit’s foot to rub.

Now, there are 100 hot takes that result when you don’t have solid data to back up a conclusion. Immediately, my mind jumped to a less burned-out labor force due to less snow. Employees being able to visit family in Mexico due to the loosening of travel and pandemic restrictions. More overtime in 2022 which led to fatter wallets and happier employees. It was still a roulette wheel of guesses.

Then we conducted our biannual salary survey in May. Since 2019, we have done a snapshot of labor rates every two years. This is not an academically sound salary survey by any rate, but we do our due diligence and I stand by the data. In fact, the responses have gone up each year and we had our largest response rate ever in 2023. Further, we review all the entries to make sure we don’t have duplicate responses from the same companies or that wacky values weren’t tossed in to skew the averages.

The increases we have seen over the past four years, and more specifically, the past two years have been startling. For the purpose of this column, I am going to focus on four positions —

Many industries have raised labor rates since 2019 — manufacturing, light industrial, service, restaurants, but some slow as they bump against a ceiling. According to data from Paychex, landscaping is outpacing transportation and utilities, manufacturing, professional and business services, and construction. The 6-7% annual increases in landscaping are above the 4-5% annual increases in other trades. That may not seem like a lot, but any employer of unskilled labor will tell you that every nickel counts.

It’s not as simple as wage growth. The second variable is the loosening of the H2B program and the supplemental caps. Many employers reading this may exclaim, “I don’t even use H2B, how does that help me?” H2B has a fixed cap of 66,000 workers which are tapped each and every year. That number is minute compared to the demand.

What NALP, AmericanHort and others have done, is work with two subsequent administrations to release more and more supplemental visas in a fair and equitable manner. They also made huge inroads into the Central American “Triangle” nations and the Biden Administration sees Triangle relief as a political and humanitarian win. The result was the release of 64,716 supplemental visas in 2023 — basically doubling the cap.

Many of the mid-sized and large companies in Illinois use H2B. When those visas are approved, it releases stress on the labor market. H2B requires wages not to be below the lowest paid domestic worker. That stipulation is probably the closest thing non-union companies have to a collectively-bargained wage scale. When the H2B lottery was first introduced years ago with very little supplemental cap relief, some large employers were left on the outside looking in. I am sure their local competitors thought, “Serves you right!” Then, the poaching started and those same competitors struggled to keep up with wage surges caused by bigger fish. A robust H2B program only offers needed relief to the local labor market. The more the H2B program works for some, it works for all.

The last variable to consider is the sustained economic growth of the landscape market for four straight seasons. Landscaping, along with Pelotons and high end liquor, was a winner during the pandemic. By not having a blip, the work continued to flow in the industry. This creates a domino effect in a referral-based industry. Costs of projects allows wages to climb, and it makes financial sense for employees to stay put and not test other waters. The landscape industry has not yet been forced to make a market correction or see a sustained slowdown. Clients have grumbled about price hikes, but most understand inflation and supply-chain driven increases. The more money that has poured into the landscape industry has solidified the ground beneath the labor market.

The big question is, as with the Fermi Paradox, will something come from outside or within that will wipe these labor gains all out? Is this confluence of factors sustainable over the long term? The economy will dip, clients will dry up, H2B will once again face political headwinds, and industry wage increases will fail to keep up with inflation. Then, we will be back to kicking dirt and blaming “kids these days” and that “nobody wants to work.” It would be nice to etch these lessons onto a stone tablet before the memory of this fades — in case of emergency: READ ME.

One of these factors is completely within our control — wages. It is absolutely essential that when ILCA asks, the industry answers. As much as I love having a fifth of our members respond to our biannual salary survey, I want that number to move up to a quarter, then a half, then 75%. I have no idea what the world will be like in 2025, but please answer when we rap on the door. Then, when we release the summary, don’t run from it. Don’t kill the messenger or cover your eyes. Just accept that this is a reflection of the industry and the only aspect of the labor equation we have any power over. Check your labor rates and then check the inflation index. Sleep well only after doing both.

The second factor is tangentially under our control. The H2B program is the entire industry’s responsibility, not just the users. If you want to keep massive landscape firms and their hiring engines at the gate, support the H2B program. Read the emails. Respond to the Congressional alerts from ILCA and NALP. Our industry enjoys this tremendous porcelain vase of a worker program, don’t let the political bulls stomp all over it.

Finally, the last factor is beyond our control. We can’t stop the ebbs and flows, booms and busts of the economy. The only benefit the landscape industry ever has is that we are a lagging indicator. We get 10-12 more months of prosperity before recession lays waste to us too. A stable labor market depends on compounded annual success, but a stable company can survive in any economic environment. In the meantime, catalog the lessons from today. It is amazing how the memories have faded when I revisit past financial statements. It is only when I revisit my notes, minutes, and reports that a narrative evolves that explains the numbers.

Maybe we are on borrowed time. Maybe the tool of our economic destruction has already been unleashed. Maybe we are one season away from resetting these factors to zero. Maybe I just needed to write the epitaph of “Here Lies our Labor Stability: 2020-2023.”

At least we now know the checklist — wages that outpace inflation, 65,000 more guest workers, and successive years of economic prosperity. We have a stronger understanding of what needs to be addressed the next time the economy falters and the labor market flinches. Unlike the Fermi Paradox, we have answers. Hopefully, that will let landscape professionals worry more about if an asteroid or toxic fungus will kill humanity first than how to climb out of the next recession. After all, we shouldn’t sweat the small stuff.

Sincerely,

Scott Grams, Executive Director May 15, 2023

President

Jeff Kramer

Kramer Tree Specialists, Inc, (630) 293-5444 jwkramer@kramertree.com

Vice-President

Ashley Marrin

Bret-Mar Landscape Management Group, Inc. (708) 301-2225 ashley@bretmarlandscape.com

Secretary-Treasurer

Jim Cirrincione

Hinsdale Nurseries, Inc. (630) 323-1411 jcirrincione@hinsdalenurseries .com

Immediate Past President

Scott McAdam, Jr. McAdam Landscaping, Inc. (708) 771-2299 Scottjr@mcadamlandscape.com

Directors

Eric Adams Russo Power Equipment (847) 233-7811 eadams@russopower.com

Kim Hartmann Rosborough Partners 847-404-7669 hartmannkim@comcast.net

Ryan Heitman

The Fisher Burton Company (847) 566-9200 ryanheitman@fisherburton.com

Tom Klitzkie Nature’s Perspective Landscaping (847) 475-7917 tklitzkie@naturesperspective.com

Dean MacMorris Night Light, Inc. (630) 627-1111 dean@nightlightinc.net

Kevin Manning K & D Enterprise Landscape Management, Inc. (815) 725-0758 kmanning@kdlandscapeinc.com

Kevin McGowen Kaknes/SiteOne 31W245 Diehl Road Naperville, IL 60563

Mark Utendorf Emerald Lawn Care, Inc. (847) 392-7097 marku@emeraldlawncare.com