Last year at this time, planning for the New Year was a tricky task for many business owners, having just come off an unprecedented year of shutdowns and COVID.
This year, COVID is still raging, but widespread vaccinations have reassured many, and business owners continue to adapt on that front. Meanwhile, they are now contending with supply chain issues and labor shortages.
While there’s more economic activity to buoy business than there was last year, said Jeffrey Bass, managing member of Plainview-based Executive Strategies Group LLC, inflationary pressures, supply chain issues and labor concerns will carry into the New Year, and businesses have to plan accordingly.
"I wouldn’t [set goals] out too far because the environment is still tenuous," Bass said, noting goals need to be revisited every quarter and adjusted if necessary.
According to the latest Fortune/Deloitte CEO survey, done in autumn, nearly three-quarters selected labor/skills shortage as one of the top external issues they expected to influence or disrupt their business strategy within the next 12 months. That was followed by epidemics/pandemics (such as future COVID-19 variants) and then cybersecurity risk.
Despite these challenges, the difference between going into 2021 vs. 2022 is that "the uncertainty to some degree is more understandable," said Benjamin Finzi, the Manhattan-based managing director with Deloitte Consulting LLP and global leader of Deloitte’s Chief Executive Program, a resource specifically focused on matters of concern to CEOs.
CEOs have gone from the early mindset that the pandemic was a passing thing to "this will probably stay with us awhile," he said.
And almost two years of pandemic has taught them they must stay nimble when it comes to strategies, he said.
Still, in this quick-changing world of COVID caution, crises and regulation, "you need more of a fast-cycle planning process," Finzi said.
Teresa Ferraro, president of Ronkonkoma-based East/West Industries Inc., which designs and manufactures aircraft seats and aircrew life support systems, has had to adapt to the supply chain crunch.
Like most manufacturers, East/West Industries' suppliers have been waiting on materials, including aluminum and steel.
"The pricing and delivery times all doubled and tripled on metals from U.S. mills," Ferraro said, noting that, for example, deliver time on some of the metal tubing for the company's aircraft seats went from 20 weeks to 52 weeks.
Leverage and timing
Earlier this year, East/West started having conversations with customers about deliveries being impacted and asked bigger customers like Sikorsky to use some of their leverage to expedite delivery from suppliers by writing key U.S. mills on their behalf.
They also encouraged customers to expedite contracts on items with a longer lead time.
Ferraro hopes the supply chain backlog will lessen in the New Year, especially as the company hopes to ramp up production and is expanding its 50,000-square-foot space by an additional 27,000 square feet.
With plans to grow, finding workers is another challenge as they look to fill up to eight positions in 2022, Ferraro said.
Finzi said the ongoing labor shortage is due to multiple factors including an aging population, some workers still fearful to return to work and others wanting remote options.
Still, Ferraro said despite challenges, planning will be a bit easier going into 2022 than during the earlier days of COVID.
Seeking broader customer base
Raj Mehta, CEO of Plainview-based Raj Technologies, a Plainview-based information technology company agrees, noting that businesses including his own are more experienced and equipped to deal with COVID.
Last year at this time, "it was more new and there was a different mindset," Mehta said.
Some priorities for his firm going into 2022 will be to more aggressively target new customers in areas such as health care and federal contracting. He wants to refocus efforts on working on securing federal contacts, noting it’s been a few years since his firm has placed an emphasis on that.
He sees some potential opportunities for smaller firms snagging contracts in the new year, with President Joe Biden signing the Infrastructure Investment and Jobs Act in Washington that will mean $550 billion in new federal infrastructure investments, including broadband.
Overall, he said, he’s optimistic — as is Matthew Cohen, president and CEO of the business group Long Island Association.
"2022 can’t be worse than what businesses endured since the onset of the pandemic," he said, noting spending is up and unemployment is down.
But that’s not to say there aren’t challenges, said Cohen, noting "headwinds remain" with issues like supply chain and labor shortages.
"Businesses are resilient and will continue to adapt," Cohen said. "The most nimble businesses are usually the most successful."
CEOs expect the effects of the pandemic to linger. In this fall's Fortune/Deloitte CEO survey, 11% said they anticipated the business effects of the pandemic to be over for their organizations by the end of 2021, 23% said by mid-2022, and 35% say by the end of 2022. Nearly a third said they didn’t see business effects ending in the “foreseeable future.”
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