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What Our Customers Can Teach Us About Supplier Management

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By: Don Lynch, Senior Project Manager, TDO

Are you struggling with increased component lead times, price increases, and quality issues? You’re not alone.  The COVID-19 pandemic has caused interruptions in staffing all over the world.  This has led to late supplier deliveries, increased commodity prices, and unpredictable transit times.  Some of these supply challenges are trending back toward pre-pandemic levels, but many challenges remain.
 
So, what can we do to improve the performance and predictability of our suppliers?  The answer will depend on each business’s unique needs; however, there may be a rich source of ideas within our midst. Please think for a moment about what makes a great customer.  Your list may be different than mine, but here are some of the things that have defined great customer relationships for me:
 
1. Clearly documented requirements.
2. Predictable demand.
3. Few expedite requests.
4. Collaborative approach to resolve delivery and quality issues.
5. On-time invoice payment.
6. Opportunities to win new business.
 
 
These attributes create and maintain relationships that are built on openness, collaboration, and trust.  Great customers not only allow our businesses to grow in revenue and profitability, but they also help us to improve our operations so that we can become even more competitive.  Keeping in mind that every buy-sell relationship has a customer and a supplier, how do your suppliers perceive you as a customer?
 
• Do our purchase orders and specification documents clearly provide all the information that your supplier needs to meet your expectations?
 
• Is our component demand predictable?
 
• Do we often ask suppliers to deliver within their stated lead times?
 
• How do we engage with suppliers to resolve delivery and quality issues?
 
• Do we pay our invoices on time?
 
• Do we invite our best suppliers to help us develop new products and services?
 
If great customers can help our businesses grow in revenue and profitability, are there similar opportunities with our suppliers?  Can our suppliers’ expertise help us become a great customer?  Will becoming a great customer help improve our suppliers’ performance?
 
This all sounds nice, but what about getting the best (lowest) price?  My list defining a great customer doesn’t include paying more than other customers.  Great customers want best-in-market value from their suppliers.  This helps them earn acceptable margins so that they can continue to make investments to innovate, improve, and grow.  We want the same thing for our businesses, and so do our suppliers.
 
Being a great customer doesn’t mean that you pay more than best-in-market value for products and services.  Instead, investing in supplier relationships can lead to maintaining best-in-market value while fully leveraging our suppliers’ capabilities to help us improve. Are you less than satisfied with your suppliers?  Consider asking yourself how becoming a great customer may improve their performance.
 
If you are a small or mid-size manufacturer and would like to further the discussion, TDO’s team is fully certified to help. Reach out today to learn more and schedule a free consultation!

Construction Career Aspirations Are Achievable

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By: Earl Hall, Executive Director, Syracuse Builders Exchange

Long before governmental entities began to focus on “inclusivity” and other “workforce development” initiatives targeting minority, women and “disadvantaged” groups of people who may not have had a presence in particular segments of the economy, construction industry employers have tried for decades to include all people into the industry, including immigrants.
 
The United States of America provides all people equal opportunity to participate in the economy, including the regional construction industry.  Determination, self-motivation, hard work, perseverance, and the will to succeed are human attributes necessary to be successful in life and business.  Gul Ahmad Hamidi is an example of how an Afghanistan immigrant successfully entered the local workforce and pursued a career in the construction industry.
 
Hamidi was born in Afghanistan, earned a degree in Civil Engineering in New Delhi, India, and was a civil engineer and a construction project manager in Kandahar, Afghanistan.  While his career accomplishments were impressive and his future full of opportunities, it all ended on August 31, 2021, when he escaped Afghanistan on a United States military C-17 cargo plane, leaving his family behind.  
 
As an interpreter for the United States military, Hamidi was taken by the United States military and hidden for the month of August, before being rushed to one of the final C-17 cargo planes leaving Afghanistan.  While on board, he assisted pilots by communicating important instructions and information to those on the plane, which was headed for Germany.  Hamidi would spend the next several months at United States military bases in Germany and in Philadelphia, preparing to begin his new life in the United States.
 
In March of 2022, InterFaith Works of Central New York introduced Hamidi to me via an email.  He expressed a strong interest in working in the construction industry as a project manager.  After meeting Hamidi during two different interviews, it was apparent that he had all the characteristics necessary to not only become a successful employee, but a productive member of society as he embraced the United States’ way of life, freedom, and culture.  
 
After interviewing with local construction companies and having nothing more than the clothes on his back and documents from the United States government, Hamidi was hired by one of the area’s premier general contractors.  Today, Hamidi is enjoying the infancy of his construction career and the many wonderful benefits of living in central New York.
 
Hamidi is a shining example of one’s ability to pursue the American dream by applying the human attributes necessary to be successful in life and in one’s career.  He escaped Afghanistan on the very last day before the Afghanistan government collapsed, now controlled by the Taliban.   Arriving in central New York with nothing, Hamidi today has a car, an apartment, clothes, and money to enjoy the many entertainment opportunities central New York has to offer.  He continues to send money back home to his parents in Afghanistan and saves money to someday own his own business or to buy a home.
 
Hamidi’s story reinforces the notion anyone can be successful in entering and participating in the construction workforce.  Being successful in a career is not a right – it is earned.  It is earned by self-motivation, hard work, perseverance, and the will to succeed.  Overcoming adversity is something most people experience at some point in life, whether it is personal or career.  
 
Hamidi’s story is compelling and is a prime example of how citizens in New York who really desire to enter the construction industry workforce can do so, if they have the drive and commitment to be successful in life and with their chosen career.

Dannible & McKee, LLP:45 Years of Success

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By: Elizabeth Landry

Front: (sitting left to right) Victor Vaccaro, Jr., CPA/ABV, CFF, CDA, Partner-in-Charge of Audit and Assurance Services; Nicholas Shires, CPA, Partner-in-Charge of Tax Services Back: (standing left to right) Christopher Didio, CPA, CFE, Managing Partner; Joseph Chemotti, CPA, CCIFP, Audit Partner and Chief Financial Officer; Peggy Rowe, CPA, CFE, Audit Partner and Partner-in-Charge of Accounting and Advisory Services

As the firm approaches its 45th anniversary this coming May, the team at Dannible & McKee, LLP is reflecting on the company’s evolution, growth and many successes over the years. Today, they are a leader among full-service CPA firms with headquarters in Syracuse, New York and additional offices in Schenectady, Binghamton and Auburn. The firm serves clients located not only in New York but across the United States and internationally. During its history, the team at Dannible & McKee has grown to over 100 professionals and support personnel, including 22 partners.

While the company has experienced much change and expansion throughout its history, the central foundational philosophy of providing high-quality service that places the client’s needs first was cultivated early on by the two founding partners, Anthony Dannible and Lance McKee. These pioneers in the CPA world broke away from a separate firm to begin their own company, because they saw that local businesses weren’t getting the quality of service they deserved. The client-centric service model they developed in 1978 laid the groundwork for success that has lasted decades into the future.

Christopher Didio, CPA, CFE and Managing Partner at Dannible & McKee, explained how the founding partners set up the firm for growth. “Lance was the audit partner, and Tony was the tax partner. They were a great combination, very hands-on workers with excellent marketing skills. Under their vision, they grew the firm to over 20 people in the first 10 years. Seven of our current partners have been with the firm for over 30 years, including Ken Gardiner and Mike Reilly, who served in key management roles that helped continue to grow the firm which they are still an important part of today. Tony and Lance also laid the foundation for key internal department meetings that we still maintain. We spend a lot of time making sure we keep people properly scheduled to balance the workload and effectively service our accounts. Many principles they brought into place 45 years ago are still followed today. That’s made our firm a great place to work,” he said.

Hands-On Service Model for Client Success

Similar to other international accounting firms, Dannible & McKee is structured into three separate departments: audit and assurance, tax and accounting, and advisory. Additionally, professionals in the firm focus on industry niches that allow them to provide specialized knowledge for each unique client engagement. Some specific areas of expertise include business valuations, ownership transition plans, mergers and acquisitions, forensic accounting, federal acquisition regulation (“FAR”) audits, employee benefit plans, trusts and estate planning, and many more.

Due to the wide array of services offered, the firm is able to serve a diverse client set of large and small entities in many different fields, including, but not limited to, manufacturing companies, construction contractors, architecture and engineering firms, professional service firms, auto dealerships and nonprofit organizations. As a registered firm with the Public Company Accounting Oversight Board (“PCAOB”), Dannible & McKee has become a recognized leader among PCAOB accounting firms by providing accounting, auditing and tax services to publicly-traded companies.

Although Dannible & McKee offers many services to a plethora of organizations, the firm is diligent in ensuring its high quality of service and attention to each client’s unique needs remains the same regardless of which specific services clients utilize.

“The biggest differentiator for Dannible & McKee is the quality of our service and our dedication to our clients. It’s one of the things that every CPA firm likes to say and put on its website, but we see that for us, it’s true. The quality of the work we do for our clients is unmatched among the other CPA firms we compete against. We provide hands-on service, going out into the field as a team with our clients, and that level of service is really what sets us apart. We tell clients that they’ll receive this level of service, but then they’re surprised when they actually do,” explained Victor W. Vaccaro, Jr., CPA/ABV, CFF, CDA and Partner-in-Charge of Audit and Assurance Services.

The firm’s emphasis on hands-on service is demonstrated by the fact that every engagement involves both a tax partner and an audit partner. Additionally, the professionals in the tax department demonstrate a high level of partner engagement year-round, rather than only at the traditional “tax time.”

“Part of the client-centric approach is that we’re proactive throughout the year. Many folks think of accounting as ramping up only after year-end, preparing the financial statements and the tax returns, and that’s the end of it. However, that’s not the way we operate. For us, it’s a year-round approach. We take the time to understand the intricacies of a client’s business and the issues affecting their tax position. This allows us the opportunity to provide thorough, timely and tailored tax planning and compliance services,” said Nicholas L. Shires, CPA and Partner-in-Charge of Tax Services.

True Ownership Transition for Employee Success

Of course, without strong professionals on the team, Dannible & McKee wouldn’t be able to deliver a high level of value to its clients. Remaining true to another standard put forth by the firm’s two founding partners, Dannible & McKee offers a clear career path and follows through on the transition of ownership to reward and retain its strongest employees.

“Some of our competitors don’t transition ownership. They have people that grow through the firm and receive new titles, but they don’t make them equity owners in the firm. As a result, they just don’t retain the strongest people. By truly transitioning ownership, we’ve been able to maintain a really strong team, including those at the partner level and also those under the partner level that see the opportunity in the future to be owners in the business. It’s a plan that has a defined path that our personnel can move along so they know they’re making progress. That progress helps them to perform well for the firm and also shows them that they’re taking steps to achieve their professional goals,” said Vaccaro.

For the majority of the current partner group at Dannible & McKee, the beginning of their career path with the firm started right out of college. To continue this trend, the firm’s emphasis on recruiting and retention of strong, dedicated employees starts much earlier on than is traditionally seen among similar companies. Dannible & McKee’s college internship program is available to college students as early as the second year of their five-year-long education program.

Didio explained how the firm has seen much success from structuring the internship program in this way. “Last summer, we had seven interns on the accounting side that were in their fifth year of school. We gave job offers to all of them, and all seven accepted. That shows the strength and success of our internship program. We’re not just looking at college seniors for internships – we’re being a bit more proactive than other firms. We commit to that investment earlier on in the interns’ college careers,” he stated.

Once hired onto the team, employees at Dannible & McKee experience many benefits, such as flexible work schedules, remote work, continuing education support, employee gathering events and bonus opportunities.

Joseph Chemotti, CPA, CCIFP, Audit Partner and Chief Financial Officer at Dannible & McKee, shared how this emphasis on elevating the employee experience at the firm has been an intentional effort. “One thing we’ve truly focused on over the last five-plus years is our group of employees. It’s the employees that put us where we are. They are what has helped us grow to where we are today and are what help us continue to succeed and grow,” he explained.

Continued Expansion Into the Future

The firm’s focus on the well-being of its employees has contributed to much of Dannible & McKee’s continued success in the New York State community and beyond. In many ways, the flexibility enjoyed by the firm’s employees has led to a natural growth of the company’s physical locations outside the boundaries of Syracuse.

Peggy J. Rowe, CPA, CFE, Audit Partner and Partner-in-Charge of Accounting and Advisory Services, recalled how one employee’s journey led to the firm putting down roots in the Capital Region. “The expansion into Albany started with one of our tax managers wanting to move back to Albany because of personal family reasons but didn’t want to leave Dannible & McKee. She worked out of her home for quite a few years until she was able to grow the business in the capital region and eventually became a partner at the firm. As a result of that success, we now have an office in Schenectady with several key professionals on our audit and tax team,” Rowe said.

Another way Dannible & McKee continues to grow is through referrals from other local businesses and mergers with other CPA firms. The firm recently merged with Buffington & Hoatland CPAs, PLLC, a smaller firm based in Auburn, New York, gaining two new partners and five accountants in the process.

“Buffington & Hoatland could have picked any firm in Central New York to merge with. They came to us because of our reputation. They knew the quality of our work and how we treat our employees, and they picked us as the firm they wanted to merge with. They’re successful partners and now they’re members of our team. That’s the message out in the community – we’ve gotten several client referrals from other CPA firms, as well,” stated Didio.

Dannible & McKee has also received many referrals over the years via its affiliation with the GGI Global Alliance (“GGI”), a world-wide alliance of well-established and experienced accounting, consulting and law firms. The firm has been a member of GGI for over 10 years, and this membership has brought many opportunities to work on international engagements.

In the future, the team at Dannible & McKee hopes to participate in additional mergers and acquisitions, further expand into New York State and beyond, and continue to broaden the scope of its service offerings. The firm plans on growing its services provided to publicly-traded companies, specifically, since it is one of the only local CPA firms registered with the PCAOB.

Certainly, no matter what’s in store for Dannible & McKee over the next 45 years, the firm intends to remain firmly rooted in the philosophy of its founding partners that have delivered so much success already. As Didio puts it, “For our founders, there were two key principles: servicing your clients and technical expertise.” With these principles guiding the way, Dannible & McKee will continue to flourish for years to come.

Attracting & Retaining Top Talent

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By: Mike Metzgar, Business Development Manager, TDO

Nationwide, the US manufacturing labor market is facing significant challenges. With approximately 10,000 baby boomers retiring every day until 2028, the situation is only set to worsen over the next five years, creating a significant skills gap, loss of tribal knowledge, and a shortage of experienced workers. This will result in fierce competition among companies for top talent and will make it more challenging for businesses to attract and retain employees. Here in Central New York with Micron moving in and the I-81 project getting underway, the future workforce challenges are arriving sooner. While compensation is important, it is not the only factor that motivates employees. Here are a few strategies to attract and retain employees that do not rely solely on money:

  1. Provide Opportunities for Growth and Development: Offering opportunities for growth and development is
    an effective way to attract and retain employees. This includes training, mentorship, and professional development programs that enable employees to enhance their skills and advance in their careers.
  2. Build a Positive Company Culture: A positive company culture is a critical factor in attracting and retaining employees. Building a culture that fosters teamwork, respect, and communication can make employees feel valued and engaged. Encouraging a healthy work-life balance and recognizing employee contributions can also help build a positive company culture.
  3. Offer Flexible Work Arrangements: Offering flexible work arrangements, such as remote work options or flexible schedules, can be an effective way to attract and retain employees. This provides employees with greater flexibility and can help them achieve a better work-life balance.
  4. Focus on Work-Life Balance: Work-life balance is a top priority for many employees. Companies that prioritize
    work-life balance by offering generous vacation time, paid time off, and parental leave policies are more likely
    to attract and retain employees.
  5. Create Opportunities for Employee Engagement: Employees who feel connected to their work and company
    are more likely to stay. Creating opportunities for employee engagement, such as team-building activities
    social events, and volunteer opportunities, can help employees feel connected to their company and their
    colleagues.

Obviously, the practicality of these strategies is highly contextual to your particular work environment. If remote or flexible work is impossible, there are always more strategies (e.g., prioritize communication and feedback, emphasize employee wellness, recognize and reward employee achievements, offer meaningful work, provide a sense of autonomy, etc.). However, the good folks at the Arbinger Institute would argue that deeper than any of these strategies is your mindset. If you consistently view your employees as individual people with lives, families, obligations, hopes, and dreams, things will generally have a way of working out even when you make mistakes. Conversely if you view your employees more as objects, even if you pay them well, you will find attraction and retention increasingly challenging in a worsening market.

In conclusion, attracting and retaining employees has always been important for the success of any business. However, over the next few years, this very well may be the biggest issue for your company’s success/survival. Companies that already do this well can weather the coming storm. Those that do not should begin working on their culture and practices now to ready themselves. Remember, while compensation is important, there are several other strategies that companies can employ to attract and retain employees. The key in selecting the best strategy for your environment is to consider the people themselves and make your decisions with them at the forefront of your mind. If you are a small or mid-size manufacturer and need some assistance with this (or really any) issue, TDO’s team is fully certified to help. Reach out today to learn more and schedule a free consultation.

The Financial Services Industry is Yet Again Under Fire, And it Should Be…

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By: Jason D. Nickerson, CFP®, EA, President & Chief Operating Officer, John G. Ullman & Associates

When will we learn? When will we as consumers take matters of choice back into our own hands? Choice is about the only thing in our control and yet we make decisions fleetingly with minimal research. We make choices about our financial lives based on 30 seconds of research or quickly trust companies twisting and turning the latest industry compliance buzz words meant to protect us as sales pitches. The recent news of bank failures and other financial services companies being questioned has me troubled, infuriated, angry.

I am not in the banking industry so I have no business using this article as a platform to attack those in the industry. However, I am a 25-year vet of financial services and I am going to use this platform to take a stand. Enough with the over use of the term “fiduciary” and the phrase “comprehensive wealth management” if that is not what is provided. How does this tie to recent troubles in financial services? Because I believe that our personal financial matters tend to rank second on our life priority list only behind our family’s mental and physical health. And with that level of importance placed on that area, we quickly enter into relationships with financial services firms being sold on something that is not there.

I want to start with fiduciary. The technical definition includes the word trust. My favorite analogy comes from one of my industry hero’s, Michael Kitces. He talks about it like this; “Suitability means selling a suit that fits you. Fiduciary duty means it actually has to look good on you too.” Anecdotally, I hear professionals recommending things that, in their minds, can make a case that they fit this description. Then when the consumer actually figures out the recommendation, some amount of time later, they see that they do not like what they got. Stop mixing suitability and Fiduciary Duty. They are different, very different. I like to use the phrase “a true fiduciary relationship.” Why? Because I know in the end the only thing I have to sell is a relationship. Yes, we benefit the longer the client stays with us, but then again, we both do.

Comprehensive Wealth Management. Used in pieces or all together, it is often used wrong. Maybe vainly, I will quote a blog I wrote a few years back called “What is CWM?”

“We find that this is more than the returns in our portfolios and cutting edge tax strategies. It is about the decision making that goes into creating a path for us that leads to comfort and peace of mind. It’s about protecting that for which we have worked so hard. It is about optimizing what we have and what we will build. It does not mean getting the most, but making the most of what we get and making decisions that are suitable for what we are hoping to achieve.
Some companies will say they offer this approach. If you come across them, I ask that you dig in and understand what they are offering. Is the first thing they ask for your account balances or what insurance policies you own? Or do they ask about you, and what is important and valuable to you? Do they run all sorts of fancy calculations and hand you a big binder and send you on your way? Or, do they partner with you to implement the decisions you have made after discussing various options and providing education on the pros and cons.”

And I continue…

“Wealth denotes how we hope to help our children in various phases of their life be it education, embarking on a career, or starting a family. Wealth refers to peace of mind knowing our aging parents are well taken care of as they move into their “golden years.” As you can see, Wealth is not just about our account balances; it is about the things we have a high value for and obtaining peace of mind around them.”

For a bonus round, I will attack cost or pricing. First, most consumers don’t know or don’t understand the full cost of their financial relationships. Do your research and ask your questions. Second, I don’t think anyone would choose a surgeon based on how low the cost might be.

Why do we do this with our financial matters? I have a colleague that puts it in a “digestible” way (pun totally intended). “We can eat the low cost food from a fast food chain for every meal, but we know that is not healthy for us.”

Rant over. Don’t expect financial services firms to change their ways, you as consumers need to change yours. Your personal financial well-being is important. Stop making choices based on buzz words and cut rate pricing. Stop chasing more return and fancy schemes. Find a partner that understands protecting what you have built is more important than growing it. You can’t grow what isn’t there. Find someone that understands that financial freedom is about choice of how we spend our time and not dollar signs and investment returns. Take back the power of choice, especially in your financial relationships.

Mental Health in the Workplace

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By: Elizabeth Landry

Over the past several years, many in the U.S. have suffered poor mental health and suicide rates have remained steady. Working people tend to be affected by these issues at a high rate. A rise in remote employment leading to feelings of isolation as well as high-stress, fast-paced work environments are contributing factors to these patterns.

According to Dr. Omar Colon, Medical Director of Behavioral Services at Oswego Health, there are several warning signs employers can monitor for to help recognize workers who may be suffering and at risk for suicide. Arriving late to work, working excessive hours, increased stress at work or at home, mentioning access to weapons and generally any behavior out of the norm for a specific person are all red flags indicating an employee may be suffering poor mental health.

Addressing these issues in the workplace can seem daunting due to the unfortunate stigma that often surrounds mental health and suicide. However, Dr. Colon emphasized it’s important for gatekeepers in the workplace, such as managers and HR personnel, to help break down this stigma by simply asking their employees how they’re feeling and offering a welcoming environment where workers can feel comfortable having discussions about what’s happening in their lives.

“When we see these red flags in our work, we have to pay attention as gatekeepers and be ready to receive these messages. We need to be thinking, ‘Wait a minute – does this person need some help? Are we making it easy for this person to access the help they need?’” explained Dr. Colon.
In addition to identifying when employees may be at risk for poor mental health or even suicide, employers can strive to boost mental well being in the workplace by encouraging employees to practice good mental health habits when they encounter stressful situations.

“We’ve been focused on creating a culture where it’s OK to take a break from stress at work and come back refreshed, even if that means just a five-minute walk,” said Alissa Viscome, Employee Engagement Manager at Oswego Health.

The COVID pandemic has also created additional mental health-related difficulties in the workplace. An increase in remote employment, virtual meetings, masks and physical occupancy limitations have all made it more difficult for employees to create important bonds with one another.

The staff at Oswego Health has been working to create more opportunities for employees to connect with one another, even if those connections must be virtual. Employees at Oswego Health have participated in activities like sharing photos of pets with one another on National Pet Day and collectively taking part in self-care opportunities during the different themed months of the “Action for Happiness” calendar. Although these initiatives may seem simple, they can make a big impact that encourages interpersonal connections and helps boost mental wellness among teams in the workplace.

Residents of Oswego County and beyond can find treatment resources at one of several inpatient and outpatient facilities, including the brand-new Lakeview Center for Mental Health and Wellness. Additionally, the Oswego Health website offers a Wellness Library where employers can find educational awareness articles about mental health and suicide as well as practical tips to help support general mental well being both in the workplace and at home.

Insurance Rates –What Is Really Going On?

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By: Pierre Morrisseau, CEO, OneGroup

I’m sure you have noticed that the cost of insurance has been rising rapidly, far outpacing the general inflation rate. Understandably, business leaders are not only upset about this, they are downright angry. Some may feel their local agent is not working hard enough to find lower cost coverages. Others believe their insurance companies are gouging them. So, what is really going on?

First, your agent typically works hard to find the best risk protection for your unique circumstances at the best possible price. Still, in the end, your agent is only the messenger. While a competent agent can impact coverage and price by doing their homework to put your company in the best possible light with insurance companies, they are at the mercy of the carrier’s pricing or its decision to provide any coverage at all.
On to the insurance companies. They exist as businesses specializing in spreading the risk across a very broad market. As businesses, they need to make a profit to survive and to keep future premiums in check. In turn, they also require purchasing insurance for the risk they assume from their customers. This is known as reinsurance. Reinsurance companies face the same challenge as the carriers they underwrite. When their losses increase due to climate change, wars, catastrophic events and higher interest rates, those costs are passed on to the insurance carrier who in turn passes them on to the consumer.

The question still remains: why are insurance rates going up so fast and so high? The short and simple answer is inflation. Continuously rising inflation in everything from labor to home values to vehicle cost to product pricing—combined with quickly rising interest rates has dramatically increased the value of each loss. Those payouts must be recouped through higher premiums. But that is only half of the story—literally.

The insurance industry is indeed coping with high general inflation, but it is also greatly impacted by what is known as social inflation. While not new, the impact of social inflation has spread rapidly over the past decade and more dramatically since the pandemic.

The “social” component of the name defines the nature of shifting societal perceptions such as negative views of corporations, insurance companies and business leaders through perceived earnings gaps and the belief someone must pay. As a result, juries and judges are awarding larger and more frequent awards in suits against both companies and their insurance companies. Trucking is a prime example of the direct impact of social inflation. Commercial trucking is a sector most affected by frequent lawsuits and higher awards. According to a recent study by the American Transportation Research Institute, from 2018 to 2021, the size of awards grew 33% annually even as general inflation only grew 1.7% and healthcare costs grew just 2.9% annually.

Additionally, social inflation has advanced in the form of third-party litigation and third-party litigation funding. According to Bloomberg, the funding of lawsuits by international hedge funds and other litigation funding/lending with no stake in the outcome except to collect a portion of the settlement, has become a $39 billion global industry.

Third-party claims of a different flavor are badly damaging the Florida insurance market and stressing Florida homeowners. Assignment of Benefits (AOB) is an agreement that transfers the insurance claims rights and benefits of the policy to a third party that can file a claim and collect insurance payments. This has led to rampant fraud as contractors and public adjusters scramble to collect AOBs then work with a lawyer to bring suit against insurance companies if they refuse to pay exorbitant repair and replacement costs. According to the Insurance Information Institute, there were about 1,300 AOB lawsuits in Florida in 2000. By 2013 there were 79,000 suits and projected to be about 130,000 property claim lawsuits excluding any impact from Hurricane Ian. All told, as of January 22, six Florida insurance companies had failed and several others were being watched closely or downgraded.

Putting this all into perspective, we are likely to see continued general and social inflation which will further drive up the cost of all forms of insurance. Still, there are ways of controlling the cost to businesses by fully investigating your cost drivers attached to risk, mitigating or eliminating risk where possible, and working with a competent insurance professional who can craft a compelling, positive assessment of your risk to present to your insurance carrier.

Training the Next GenerationConstruction Worker

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By: Earl Hall, Executive Director, Syracuse Builders Exchange

Earlier this year I reported on the opportunities and challenges in the industry over the next few years. With an abundance of anticipated work and labor shortages impacting employers’ ability to bid or perform the work, project owners will rely upon the innovative solutions construction contractors adopt to deliver completed projects on time and within budget.

My last article touched upon the labor shortage but did not provide details or solutions on what leaders in our community and industry are doing to address how to attract and retain the next generation construction worker.

Years ago, the Syracuse City School District (SCSD) launched their Career and Technical Education (CTE) program, with approximately 14 career pathways supplementing core class requirements such as math, science, etc. One of the first pathways was Construction. As a SCSD CTE Advisory Board member, helping SCSD start the construction curriculum was rewarding and timely. Today, the SCSD’s construction curriculum is being recertified by the New York State Department of Education, and used as a model for other suburban school districts which will launch their own construction career pathway program beginning in the fall of 2023.
Beginning in the fall of 2023, the SCSD will add to the construction curriculum a replica of the Syracuse Builders Exchange’s (SBE) electronic plan room, courtesy of Barryhund, SBE’s e-plan room software developer. This educational platform will include all of the features of the e-plan room, but will only have a few projects for the teachers and students to work with, including actual SCSD building projects which have already been completed.

The new STEAM (Science, Technology, Engineering, Art, Math) is scheduled to open in September 2025 for students from the SCSD and suburban school districts. Over the past year, executives from construction management firms have been working with SCSD curriculum writers to develop the new construction management career pathway curriculum which will be launched in 2025. This curriculum will also include SBE’s e-plan room technology which is used by over 900 companies and thousands of their employees throughout the year.

Union training funds have been investing in attracting and retaining future construction workers into their trades, evident by the increased use of technology to identify and attract candidates. Many of the trades training funds have turned to social media, internet marketing, on-line hiring applications and other technologies to reach the younger generation. The investments have paid off with new entrants into apprenticeship programs, which is leading to new investments into enhanced training facilities. Such examples include a 12,000 square foot expansion to the Carpenters Local 277 training facility in Liverpool and the anticipated new construction of the Laborers Local 633 training center in East Syracuse.

It remains a pleasure to be heavily involved in the many exciting initiatives throughout central New York that are leading to new and younger people entering the construction industry. While there remains much more work to be done, including working with the Utica Central School District later this year to launch their new construction career pathway program, the measurable results from the above efforts and programs remain encouraging. Collaborating with school administrators, construction industry executives and utilizing technology have all enhanced the construction industry’s ability to become more attractive to high school students who have a desire to begin a career as a next generation construction worker.

In my next report, I will share an amazing story about an Afghanistan immigrant who came to the United States legally, with nothing more than the clothes on his back and an incredible desire to achieve his dream of becoming a project manager of a premier construction company.

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Wilkins Mechanical: ‘I accept this challenge’

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By: Tami Scott

Susan Heffernan- Owner, President & CEO

Condensate Repair Manhole #3, Farrell Hall SUNY Delhi

Science III Chiller Upgrades, SUNY Binghamton University

When Susan Heffernan was presented with a chance for change, she grabbed it. It wasn’t part of her plan though it certainly served its purpose.

Heffernan had just enrolled at the Whitman School of Business at Syracuse University to further her education. She had been working as an accountant but felt an inner tug to do something different. Earning a master’s degree in her field was a sensible, safe route to start.

One phone call changed everything.

She learned through a friend that the owners of Wilkins Mechanical were looking to retire and sell their business. Her friend, who was aware of her current discontent, encouraged her to inquire. And so, she did.

“The broker asked if I’d ever considered owning my own business and I said ‘well, not consciously,’” Heffernan said, noting that for years she always worked hand-in-hand with business owners. “I guess you could say in a way, I’ve always been in training for this very moment, it didn’t take long for me to realize that this was the right path to take, so I gladly accepted the challenge and the process began.”

On Dec. 30, 2021, Heffernan became a business owner. For 11 months leading up to that moment, she embraced every occasion to learn from the people who built it.

“I worked alongside the previous owners for a few months with the intent of hitting the ground running a little faster upon closing,” Heffernan said. “That experience certainly helped me gain some insight on what challenges they faced and what I might expect.” 

Heffernan credits her mom and grandmother — her biggest heroes — for instilling the strength to take challenges and leaps of faith because, “if you don’t you never really know what you are capable of, and without risk, there’s no reward, right?”

Looking back, Heffernan said never once did she feel like she couldn’t do it. “I had the attitude of ‘yes, you can do this.’ The experiences I’ve gained over the years have prepared me for this.’”

Heffernan is in the process of working on obtaining her WBE certification, which she hopes to achieve by the end of 2023. “Through research, webinars, and speaking with other certified WBE business owners, I know the process is quite extensive,” she said.

Challenges and rewards

When asked what are the challenges and rewards of this new venture, Heffernan responded by saying that everything is rewarding and challenging all at once.

“They feed each other,” she said. “It’s exciting to be faced with a challenge or obstacle, and finding the solution or resolution to those situations are the reward.”

Before pursuing a shift in her career, Heffernan worked in finance for almost ten years at Martin-Zombek Construction. “We were all encouraged to “think like a business owner,” “think like an entrepreneur,” she said. “At that time, it was practice; now, it’s the real deal.”

Stopping the “I’m an employee” thought process was one of Heffernan’s biggest challenges. Her background at Martin-Zombek, however, prepared her well for the new path she walks today.

“I’m grateful to have had the experience at Martin-Zombek,” she said.

Though Heffernan is the new leader of this female-owned business, she’s mindful of each team member’s purpose within the establishment.

“We all have a very important job to do here and none of us can do it [alone],” she said. “The kind of culture I’m trying to create and build off of [is] the foundation that the Wilkins’ [had] so tirelessly built. We’ve got a solid crew, in the field and in the office.”

Aside from the employee-to-employer transition, Heffernan is also conscientious of continuous learning and the value of networking. The Construction Financial Management Association (CFMA) and the Syracuse Builders Exchange (SBE) — had both served as substantial resources for her in the past. She plans to engage with each again.

 

“[CFMA] and [SBE] were huge for networking and were resources when I was in my previous position in construction,” she said. “I miss that education because [not only] would I learn something new, but it also validated what I knew [already]. That’s how I can be most helpful to my team, by making sure I’m continually learning and knowing  the best way to account for all the hard work my team is doing.”

Though it’s been less than a year, the rewards so far, she said, are seeing the teams come together and watching the business develop.

A little history

Wilkins Mechanical Inc. was formally incorporated in 1997 and family-owned for 41 years. That’s a history that would make anyone who succeeds the founders feel both secure in their acquisition and apprehensive about filling their shoes.

“Many people dislike change,” said Heffernan. “There are times when it’s even uncomfortable for me. So, I understood there was going to be some apprehension [and] potentially some resistance.”

Heffernan noted how oftentimes when a new owner takes over, they decide to build their business from scratch. “It makes sense that there would be some concern,” she said, “but that was definitely not my plan.”

In fact, the only changes she sees on the horizon are newer technology and more staff. For herself, Heffernan implemented an accounting software program within the first six months to keep organized in job costing and project tracking. Her next focus will be organic expansion — growing the business in a way that makes sense.

“I hope to increase employment over the next few years,” she said. “New York State has been a very good customer; we have had success in bidding OGS, DASNY and SUNY projects. ”

Heffernan looks forward to having internal conversations with employees on exploring other gainful avenues, too.

What should their customers know?

Sometimes change can shake up customers’ confidence if they’re uncertain about what to expect. At Wilkins Mechanical, Heffernan exudes a commitment to excellence.

“I carry the same values, work ethic, and pride that the former owners had,” she said. ”I respect that. I want to continue to preserve the reputation that the previous owners worked so hard to build — that’s my goal.”

Does that mean there won’t be any “oh shoot,” “oh darn,” or “I’m sorry” moments? Of course, there might be, she said, because learning curves are a natural — and healthy — part of a new process, and show humility. Heffernan advocates for customer conversations to bring her up to speed on current happenings.

“I appreciate our customers and I am thankful for their patience in our growth,” Heffernan said. Our customers have been wonderful to work with. I’ve very much enjoyed getting to know them.”

In essence, Heffernan’s view on success for everyone is about collaboration. “We’re very prideful in the work that we do because we do a knockout job. We’re welders, we’re pipefitters and nobody can weld as good as we can,” she said. At the same time, feedback is critical, too. “If our client is unhappy with a certain situation, we entertain that. We’re open to that conversation.”

“I see everything as a team,” she added. “Everybody needs support, whether it’s on a project from a project manager to the foreman to the client’s project manager — we all need to work together and that’s the kind of culture and philosophy that I’m trying to build.”

Heffernan may not have ever consciously thought about owning a business, but her experience, philosophies, and can-do attitude, together with team-building principles, appears to have put her on the path she had been seeking from the start.

Main Boiler Plant Combustion Ventilation & Reverse Osmosis System, SUNY Upstate Medical University

Wilkins Mechanical Apprenticeship Program

The Wilkins Mechanical Apprenticeship Program is accredited through the National Center for Construction Education & Research (NCCER), which is recognized by the New York State Department of Labor.

“We encourage anyone, at any age, to join our organization and learn the plumbing, pipefitting, and steam-fitting trade,” Heffernan said.

The typical program is five years. The work processes that an individual is trained on and the minimum required hours are set by the DOL. A newly hired individual who enters the program will “test in,” which will determine their knowledge and skills to influence their entry level.

AmeriCU: Setting the Stage for Success Through Uncertain Times

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By Alycia Schick

Ron Belle, President & CEO

Grand Opening, Liverpool NY Branch

Operating a business in an ever-changing economic climate can be challenging. Being in the financial services industry, credit unions are certainly attuned to shifting economic environments. Despite rising costs in 2022 and economic uncertainties ahead for 2023, AmeriCU Credit Union has continued to grow.

Established in 1950 on Griffiss Air Force Base in Rome, New York, AmeriCU has grown to serve more than 160,000 members across Central and Northern New York. The credit union also specializes in working with over 850 business partners with whom they offer financial solutions and services to their workforces.  

Ron Belle, President and Chief Executive Officer of AmeriCU Credit Union, discusses AmeriCU’s “Stay Connected” strategies that can apply to businesses of any size. 

  1. Stay Connected to Your Markets

AmeriCU understands the importance of staying connected to its members. Identifying trends and changing needs of your market is not just important, it’s critical.  So is knowing how customers want and need to connect and interact with your business. Having this level of knowledge can ensure you are providing the services and technology capabilities necessary to remain relevant as well as could provide your business an opportunity to expand. Having a clear understanding of your market also provides a foundation towards developing a strategic direction.      

AmeriCU has found there are several ways to collect market data. The credit union regularly provides surveys and encourages member feedback to ensure the credit union understands what members are looking for in the way of product and service enhancements, member service expectations, and ease of doing business. AmeriCU has also found value in partnering with research companies who specialize in identifying industry and consumer trends across the region and nation.

  1. Stay Connected to Your Teammates

AmeriCU has strategically enhanced its self-serve technology capabilities for both members and teammates. “Our members require convenience of doing their banking how and when they choose – the same applies to our teammates,” says Belle. AmeriCU has enhanced internal capabilities so they can be more efficient, for example in gaining instant access to important business data. “Beyond any technology changes, our 400 teammates are who make us AmeriCU. We live our culture every day.”

Talent is hard to find and highly coveted. Retaining and promoting is just as important as hiring new teammates. AmeriCU makes it a priority to understand what individuals are looking for in an employer, while recognizing what motivates them to achieve success. This creates a culture that allows individuals to grow and thrive in their career at AmeriCU. The credit union also puts an emphasis on training and expanding the skills of teammates, leading to improved job satisfaction and more opportunities for internal promotions. Doing so helps to improve member experience and service levels that are industry leading.

AmeriCU conducts monthly all-staff meetings that supports transparency across the organization and keeps team members connected to the credit union’s vision and mission. AmeriCU offers a hybrid work schedule to attract and retain individuals, allowing for greater flexibility and balance, along with a generous paid time-off program. Regularly scheduled department and individual meetings along with a bi-annual review processes are in place. These practices keep teammates and management connected throughout the year while cultivating an environment of learning and personal development.

  1. Stay Connected to Your Community

Being a good corporate steward is paramount to success. Research shows individuals want to do business with companies that make a difference and leave the world in a better place for future generations. AmeriCU is committed to giving back to the communities it serves. The credit union supports local charities and community organizations and understands the importance of giving back financially and through volunteerism. AmeriCU regularly engages with community leaders to understand their needs and how to partner together. Teammates are also encouraged to spend time in the community and build connections that make a difference. A benefit at the credit union is a Personal Day of Meaning, giving each teammate the choice of a local organization important to them to volunteer their time. 

  1. Stay Connected to Your Vision, Mission & Strategic Plan

AmeriCU believes that by keeping its vision and mission at the forefront along with annual strategic planning allows them to be flexible and achieve desired outcomes. “The economy has been through a difficult period these last few years with a pandemic and high inflation. We had to plan and prepare more than ever,” says Belle. “Having a strategic plan provided us the ability to adapt during these times.”

When formulating a plan, it is important to identify what you do well, understand market trends, and try to anticipate needs.  These questions, along with direct feedback from the markets it serves, helped AmeriCU develop a strategic plan that teammates can embrace and track progress towards achieving goals. From this, AmeriCU formed a strategic plan and created a business strategy focused on six key pillars to sustain success and growth. Within each pillar are goals that are specific, measurable, achievable, realistic, and timely (SMART). 

AmeriCU has project management tools in place and holds regular check-ins with key stakeholders to measure progress against the plan. Strategic planning sessions are conducted to evaluate and adjust plans in response to business needs, shared or new learning opportunities, or external factors. This plan is available to the AmeriCU team and serves as a guiding light for decision making. AmeriCU has found greater structure and documentation allows it to better respond to shifting market conditions.

AmeriCU recognizes every business is different and the future can be uncertain. “In an increasingly disconnected world, real connections matter more than ever. Connecting to our members, our teammates, our communities, and our vision has truly been key to our success,” says Belle.  As a local, member-owned organization and full business service provider, AmeriCU takes pride in helping other businesses achieve their goals and is always there to offer tips and lend a hand.

AmeriCU & You. Let’s Connect. 

For more information on AmeriCU, visit AmeriCU.org or call 800.388.2000.