New ASA Quarterly Market Survey shows members continue to

battle modern-day business realities

Tough labor market, wages, work/life balance and volatile operating conditions top of mind.

By Brianna Baresel, Manger of Data and Market Intelligence, bbaresel@asa.net

“We have had to be nimble and give some spot raises at times in order to keep vital talent,” one respondent wrote. “Our pay ranges also have been creeping upward in order to keep up with market trends.”

“We added a small cost-of-living adjustment to our normal once-a-year wages,” another distributor moted. “We have also, in situational instances, made one-off adjustments to wages in certain competitive markets.”

Others pivoted in areas such as operational costs and technology.

“Focusing on innovation, technology and quality processes to help lower operating costs,” one respondent stated.

The latest American Supply Association Quarterly Market Survey shows member distributors continue to tackle modernday business realities, both the good and the challenging.

The survey, produced by ASA’s Business Intelligence Unit, asked association distributor members what questions and topics they would like asked in the survey. Both multiple-choice and open-ended questions were asked, allowing respondents to further elaborate on their responses. This time, more openended questions were requested to be asked of members.

Full results of the survey were sent to ASA distributor members and can be found in the MyASA members-only portal at www.asa.net/myasa (log-in credentials required) or by emailing ASA Manager of Data and Market Intelligence Bri Baresel at bbaresel@asa.net

The data below is but a snippet of the overall survey contents and members are strongly encouraged to access the full report.

Questions in the survey ranged from inflationary adjustments to post-pandemic business approach to more HR-centric topics such as the continued challenging labor market, health care for employees, employee wage discussion, commissions and employee work-life balance.

Current market conditions

ASA-member distributors were asked how they have dealt with inflation in the last year. Most responses quickly turned to employee wage levels.

“Wage increases, market adjustments, increased pricing passthrough to customers, combined with a reduced margin level to remain competitive,” another distributor summarized. “2022 has been a harder year in terms of margins and controlling costs.”

Distributors also were asked what the biggest change has been since the pandemic slowed. Almost all pointed to increased interactions with customers.

“More in-person events and activities,” one distributor said.

“The return of vendors and customers to our buildings,” another noted.

One distributor noted a nice change in showroom operations. “More people walking into showrooms to purchase high-dollar remodel products,” that person wrote.

With this question, talk also turned to the topsy-turvy labor market. “Bcause unemployment numbers are so low, it’s hard to find good, quality workers for the positions we do have open,” one distributor said.

“More candidates applying for open positions, however, none of them want to come to work every day,” one respondent bluntly noted.

“Hiring competent employees that are willing to work 40 hours a week,” another distributor added.

One respondent said the pandemic has made his staff more aware of potential future business disruptions. “It seems like we are getting back to something closer to a semblance of normal,” the distributor stated. “It seems though that employees know to expect the unexpected and that the other shoe could drop at any moment. There is an air of uncertainty that was not there before the pandemic.”

The labor quandary

Staying with the labor topic, multiple questions were asked specifically related to the continued challenge that is hiring/ retaining employees.

When asked what their most effective hiring tool is, 67% of respondents to the survey said word of mouth, while 25% mentioned online and 8% said the use of recruiters.

“We have an internal employee referral program and bonus that tends to bring great candidates forward,” one distributor wrote.

“We offer a bounty of $3,000 to the referring employee,” another distributor revealed.

One distributor noted it uses a combination of temp agencies and referrals, but “with the tight labor market, it’s been more referrals.” Another distributor explained it has employed a fulltime talent acquisition manager for the last six years.

Chatter was strong when distributors were asked if their 2022 employee turnover was higher or lower than 2021. The good news is more than 2/3 of respondents said that number remained flat last year, while nearly 21% said their quit rate went up.

“We had more competition this year in warehouse positions and more turnover there because of competition,” one distributor wrote.

“Our turnover rate seems to hover at about 20%, which is not great,” another distributor noted. “However, we have not seen the effects of the great resignation that other companies have experienced.”

Nearly three-quarters of respondents to the survey said they track the reasons employees leave their shops, while the average time it takes for a distributor to fill open positions currently ranges anywhere from two weeks to six months, based on survey results.

“It’s too long,” one distributor lamented. “Ninety days is a good average right now, and that is way too long.”

Distributors also were asked what initiatives and incentives they have in place to retain good employees — another question that generated plenty of responses.

“New hires are getting paid holidays before their 90-day probation is over,” one distributor explained. “Regular bonuses, more liberal scheduling, covering sick days above PTO days, providing lunches on a regular basis, cellphone allowance, more correcting in the best, positive way and being more thankful to the employees.”

Let’s talk HR

A host of human-resource-related questions were asked of distributor members, including how companies are handling the inflationary environment related to sales commissions.

“We have fallen short in this area,” one distributor admitted. “We did not get ahead of it, and it is costing us. We are rolling out a revised commission plan (this month).”

“No change. We pay off by margin,” another distributor responded.

“We haven’t adjusted commissions, but more base income and a bigger car allowance,” another distributor wrote.

“Percentage still based on gross profit and net profit for managers,” was another distributor response.

Along those lines, more than 70% of respondents said they do not cap wages for specific positions.

“Inflation doesn’t cap, why should employee wages?” one respondent asked.

One interesting question posed by a distributor member was if companies pay commissions on collected sales and how are they doing it? Reponses ranged from commissions not being paid if a sale goes unpaid beyond 90 days to another distributor noting the commission goes out the window at 150 days in AP.

“All commissions are based on shipped and paid sales,” one distributor said.

On the topic of health care for employees, 28% is the average respondents to the survey are asking their employees to contribute to their health-care plan.

Additionally, distributors were asked what the average PTO/ vacation/sick time accruals they have in place. Responses were again all over the board on this one and warrant further examination by readers.

And finally, distributors were asked how they are best handling work/life balance with employees.

“Just like we always have, there is nothing new about recognizing and valuing the importance of work-life balance,” one distributor wrote.

“Life balance is a core value of our company,” another distributor noted. “We have specific business hours and we stick to those hours. Life balance can be more challenging in corporate or sales roles, but we try our best to practice what we preach, even in these roles.”

What questions do you have?

If you have a question(s) you would like posed in the next quarterly market survey set to launch in Q2 2023, email Bri Baresel at bbaresel@asa.net