Dog Days

The effects of COVID-19 could go into extra innings.

Summer officially started back on June 20th. Since then, instead of keeping score at the ballpark, we contractors have been sweating through the uncertainty that is COVID-19.

Best case? The stands are at capacity when President Trump throws out the first pitch at this year’s Fall Classic. But, as Jim Collins reminds us through the Stockdale Paradox, we should always “hope for the best and plan for the worst.”

July 3rd – August 11th are notoriously called the dog days of summer. This short, humid stretch inevitably gives way to the crisp cool breeze of the Fall. However, this year those forty days could drag on forever.

A single virus has canceled Spring Training, pushed back the season opener, and has thrown us all a curve ball so nasty it would buckle the knees of Mr. October himself.

Reality is that while COVID-19 might be better “controlled” by the start of the World Series, the negative impact its rapid spread has had on our economy could just be getting warmed up.

Over 30 million workers filed for unemployment in just a seven week stretch. That number is expected to rapidly decrease once every restriction is finally pulled. Even if that happens soon, where is the incentive?

There is little reason for those lucky enough to have received unemployment to return to work before those benefits run out July 31. Why would they get back in the game any sooner?

Analysis from The New York Times shows that those in over half the states will receive more in unemployment benefits, on average, than their normal wage.

In an industry already underemployed, this only adds to the potential shortage of electricians at a time when they could be needed most.

Consequently, focus on retaining the team you have in place if you have not done so already. Yes, retaining your most valuable “A” players should always be part of a company’s strategy. Under the circumstances though, I am talking about retaining every able “body” you possibly can – even the marginal on your roster whose impact on the job is little more than making a good showing for your general contractor.

Keep in mind that no matter how many players you need, exactly zero are worth jeopardizing the culture of the team you worked so hard to build.

This could also be a great chance to pick up a few free agents who otherwise would not have been available. If you have prepared properly, that opportunity should present itself soon.

Everyone in my Forum Group 14 was full of hope when the year started. This was supposed to be a repeat kind of year, following a few years of a booming economy. The year 2021 was the question mark year, a year following what most were considering a coin flip election. Instead, the results of a November vote seem almost four years away now.

Most in my circle would believe re-election for a Republican White House is best for an economy that will be starting over again. A Republican controlled house and senate even better. As a small business owner, I am of the same opinion.

Truth be told, the last time that happened was during the Bush 43 years – January 2005 through January 2007. Eleven months later we entered the greatest recession of our generation. A recession that lasted nineteen months, though it seemed to never end.

Regardless of the outcome, when voters wearing face coverings go to the polls in November the damage COVID-19 has done will have already shaped the next couple of years.

Banks with no choice but to take on nearly $700 billion in SBA loans will tighten their already strict lending guidelines across the board.

A few design builds that once were coming straight down the middle, will suddenly sink right before the plate. If you followed the scouting report, you could check your swing at the last minute allowing yourself a chance to step out of the box to regroup before stepping back in.

Only there is not much of a scouting report. No one could have been fully prepared to face this unknown prospect out of China. So, we do our best to stand in and try to stay ahead of the count.

You need to get on the horn with your vendors as quickly as a manager does to his bull pen. Shipping delays and price increases are already happening. Do your best to lock in material and fixture prices now. Have a solid contingency plan in place if delays should occur.

Do not be afraid to visit the mound more often than normal. Over communicating early and often with your GC is crucial, especially during a crisis. They will understand the magnitude of the moment well.

These circumstances, mostly out of our control, will lead to tighter margins and tighter competition. Less room for errors. All foreshadowing what expert economists say could come.

The only unwelcome increases are likely to come in the form of health insurance, unemployment insurance, workers compensation insurance, and anything insurance for that matter. So be prepared now.

If you were fortunate, or unfortunate depending on how you see it, to receive a PPP loan, then great. Utilize it for what it was intended for – paying your employees. Then use any cash it might have freed up to help offset the increases expected.

Currently, we are staring down as much as a 30% increase specific to health insurance alone. So, we have no choice but to charge the mound in order to fight an uphill battle. Except, it seems like we have been fighting that battle for five years now and Nolan Ryan has had us in a headlock ever since. We know how that fight ends. And while Robin Ventura’s face would have benefited from social distancing guidelines, we will not call time to negotiate with our insurance reps via Zoom.

The safest bet for now is that maintaining six feet of space while working on a job will last through August. If Vegas were open, the over/under would be set at next summer, but as of this writing, it is not.

When fans do finally find their seats again in ball parks across the country, there could be six empty seats between them. Another unprecedented economic result of a virus.

That would take the average attendance of an MLB game down from 28,660 fans to 4,776. Just 1,000 more than the average attendance per game in the minors last year.

The search volume for the term “social distancing” is still up 100-fold on Google. An amazing stat considering its rather simple definition is one of the only certainties most can agree on right now – “maintaining six feet of distance from others when possible.”

If they are not now, then both face coverings and social distancing should be an important part of your company COVID-19 response plan. We know that for sure.

If you do not rename that plan “Infectious Disease” after COVID-19 is behind us, you really should. This will be the template moving forward from here. No one will have an excuse for not being prepared if and when another disease pops up.

So where is the faith that is supposed to ensure the Stockdale Paradox is balanced? If you search for it, I promise it is there, although true optimism has already proven faulty. That point came way back in February when some wishful people thought a virus could only affect third world countries.

Our hope for the best has quickly changed course. The best case now is that COVID-19 does not go into extra innings due to the complacency that comes from not giving an opponent their due respect. That, in every sense of the word, is Bush League.

The best case now is that the virus does not play out like some experts warn in the form of a double header, bouncing back worse than before, just as life as we thought we knew it returns to normal.

If that happens you can forget the World Series. Our conversations will quickly switch to the other side of the plate. Playing the Big Game in February with no fans in the stadium? Not sure what that would look like, but I do know the economic impact would be almost impossible to calculate.

For all our sakes, let us hope that does not happen.

Billy Ross Hill is president of Hill Electric, a family owned company located in San Antonio, Texas.

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