Weed barrier landscape fabric needed for gardening hasn’t been in stock for five months. Lumber prices are through the roof. Tradespeople are booked months in advance and appliances are on back order. Last week, my neighbor complained that the price of a $250 flight to Phoenix is now $900.
Fear of inflation is here. We are seeing a surge in demand for products and services, offset by a limited supply. The result is a sharp increase in cost, and in many cases, the consumer’s willingness to pay more. For some, this trend reflects a euphoric release of pandemic spending restraint, or purchases that indicate heightened confidence due to a new, higher-paying job. Others simply have more bank savings after sheltering in place for over a year, or are experiencing a bump in personal net worth – the result of an increase in home prices or savvy stock market investing since March 2020. Many were recipients of COVID-19 relief.
On a recent flight home from Tampa, I watched as two servers valiantly tried to serve travelers flooding into the terminal cafe to grab snacks. Dishwashers couldn’t keep up, so food started coming out on paper plates. An exasperated Southwest Airlines gate attendant announced that he’d only just been assigned to our gate minutes ago, and needed time to get things in order. The disintegration of shelter-in-place guidelines coincided squarely with the long weekend at hand – a situation that could have been avoided with good planning, since the uptick in travel was foreseeable. It was then I realized that this overwhelming state was likely the outcome of a labor shortage.
Drained after emerging from the uncertainty of the pandemic, small businesses now find themselves in the crosshairs of a juicy labor shortage. And, in an era of Zoom fatigue, many owners could use some “real” versus “virtual” thought partnership about how to tackle it.
Times like these offer stellar opportunities to grow your tax business. Take a friendly, simple step by reaching out to a prospect or client by phone and offering help.
No one knows how high the inflation rate will rise or how enduring it will be. However, by virtue of previous inflationary cycles, or simply because you witnessed successful work-around tactics in action by other business clients, you have a remarkable ability to extend advice beyond that of being a tax advisor. Having all the answers is not required! Just help clients get back to feeling confident and focus on their big picture.
Start out as a sounding board, and inquire about perceived or real labor shortage or cost challenges. Consider offering A/B scenario planning assistance and clarifying tax implications around “what if” events before they occur.
One reason why some employees are not yet returning to work is their child or eldercare challenges. Although this situation might soon shift, for businesses particularly in the service sector – where onsite attendance is critical – think about ways for them to be flexible. Could job sharing or cross training bridge any labor shortages or help with retention?
Here are some additional conversation starters for clients facing labor issues:
- Is it possible to reward productivity more by incentivizing employees who help standardize or innovate to reduce cycle times and output, or finding new ways to improve a process or program?
- Can hiring be postponed until the end of the pandemic-related unemployment benefits this September, or sooner, depending on the state?
- Would new product bundles that camouflage price increases help the bottom line?
- What additional technology investments should be made now? For example, isn’t this the best time to do the following:
- Transition to cloud solutions, including tax preparation software such as Intuit® ProConnect™ Tax, to improve access, security of software updates, and the ability to work anywhere, any time.
- Sign up for project or team management platforms that track progress, handle scheduling, and provide communication features – all for increased efficiency.
- Save time by implementing portals to exchange information with clients and employees digitally.
- Amp up convenience by adding on the ability to get electronic signatures for documents and accept payments remotely.
Consider proactively reaching out to potential clients who might be straining under the weight of increased labor costs or a labor shortage. If sincere, this could be a well-timed way to grow your tax practice. The good news is that this labor shortage might be short lived. I’m keeping my fingers crossed.