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It’s Time to Grow Your Electrical Distributorship, Part I

By Bridget McCrea

The U.S. construction industry is booming again and economic indicators are largely positive despite the cloud of uncertainty that’s hanging over the nation during the initial months of the new presidential administration. Despite this volatility, at least one thing is for sure:  this is no time to sit on your hands, batten down the hatches, and hope for the best. There’s new business to secure, new employees to bring onboard, and new expansion opportunities waiting right around the next corner.

In this article series you’ll hear what business experts have to say about three different growth approaches that all distributors should be thinking about right now—hiring new employees; finding new customers and market opportunities; and expanding by opening new branches, merging with other companies, or simply getting a few more square feet under an existing roof.

Read parts 2 and 3 of this series here:


Take a step back, look at the big picture, and figure out a few new ways to fill that sales pipeline.


While the payoffs of physical expansion can be apparent, the actual act of expanding is anything but easy.

Don’t Just Hire Out of Pain, But Do Hire for the Future

Any electrical distributor that relies on the U.S. construction market as a mainstay probably has more work than it can handle right now. And those distributors aren’t alone. As indicated by the recent reports, the U.S. economic outlook is healthy according to the key economic indicators. The most critical indicator is gross domestic product, which measures the nation’s production output. The GDP growth rate is expected to remain between the 2 percent to 3 percent ideal range, according to The Balance.

U.S. GDP growth will rise to 2.1 percent in 2017. That’s better than the 1.9 percent estimated for 2016 and the same as 2015’s growth rate of 2.1 percent, the publication reports in US Economic Outlook: For 2017 and Beyond
Experts Forecast Steady Growth. The increase in gross domestic product will remain at 2.1 percent in 2018 and drop to 1.9 percent in 2019. That’s according to the most recent forecast released at the Federal Open Market Committee meeting in March.  This forecast begins to take into account the impact of Trump’s policies, which include a proposed $1 trillion in national infrastructure improvements.

Overall, the U.S. Bureau of Labor Statistics (BLS) expects total employment to increase by 20.5 million jobs from 2010-2020. While 88 percent of all occupations will experience growth, the fastest growth will occur in healthcare, personal care and social assistance, and construction. “The BLS assumes that the economy will fully recover from the recession by 2020 and that the labor force will return to full employment or an unemployment rate between 4-5 percent,” The Balance predicts.

Tight Labor Market Woes
Companies across many industries are also seeing signs of a tighter labor market, where skilled and technical workers have become more and more difficult to find and retain. With thousands of baby boomers heading into retirement daily, and with the new generation of millennials making their way into the workforce, 2017 is the year that distributors should sharpen their pencils and leverage human capital as a growth tool. “Don’t just hire out of pain or wait until the last minute to start filling out your stable of employees,” says Linda Henman, Ph.D., of Henman Performance Group in Chesterfield, Mo. “Instead, take a calculated, well-thought-out approach to finding that new salesperson or project manager.”

Put simply, Henman says distributors that have been taking a “wait and see” approach to hiring—and only fill open positions when absolutely necessary—should think about contingency planning. In other words, what if the four requests for proposal (RFP) that you submitted last week all come to fruition at once? Do you have adequate staff to manage those orders and the associated technical or customer support needed to service the accounts? Or, will you have to pull resources from other areas to meet those new needs?

“In a lot of cases, small to midsized firms operate with an ’emergency hiring only’ mentality, and that just isn’t going to cut it in today’s labor market,” says Henman. “Employees have a lot of choices of jobs in front of them, and thinking that you can just get out there and handpick the best ones whenever you need them is a flawed approach.”

One good strategy that Henman advocates is hiring for the future, and not just for the here-and-now. Look for promotable employees who may be willing and able to take on more responsibility in the future, she adds, and utilize cognitive tests and other “vetting” measures to ensure that you’re putting the right people in the right jobs. “When you get beyond entry-level positions and into more senior-level responsibilities,” she says, “look for people who have solid critical thinking skills and who can manage shifting complexities and responsibilities.”

Courting Millennial Employees
Matt McCarron, VP of LEDVANCE’s Industrial Commercial Channel in Wilmington, Mass., says that his firm has upped its efforts to attract millennial workers who may not otherwise consider jobs in the industrial/manufacturing field. He says the biggest hurdle on that path are the eager, energetic candidates who get onboard, receive the training, and then leave for another job within two to three years.

“A lot of companies are looking at how to address that issue, and putting more effort into figuring out what truly motivates millennials versus any other generation,” McCarron says. For example, he says electrical distributors should take a particularly hard look at the way they do business and communicate in today’s high-tech workforce, where traditional phone calls and in-person ordering have quickly gone the way of the eight-track tape.

“Both distributors and manufacturers need to put systems in place that allow them to interface with younger workers on their terms,” says McCarron, noting that such efforts will, in turn, help companies work better and faster with their own customers (i.e., next-generation electrical contractors). “Having an employee base that understands the ‘new’ contractor will be an invaluable piece of the puzzle for distributors in 2017 and beyond.”

People Want to Work for Good Companies
Heidi Pozzo of Pozzo Consulting in Portland, Ore., says distributors that want to hire new workers this year should put some time into developing their corporate cultures while also getting as many current team members as possible involved in the process. “People across all departments should have a say in who is being hired, how they’re being trained, and where their talents will be put to best use,” says Pozzo. “The more people who get involved, the better the team works as a whole.”

With economic signs pointing in a good direction right now, and with infrastructure spending bills currently under discussion, the future looks bright for electrical distributors that view 2017 as a growth opportunity. “Depending on where you are in the country, construction is pretty hot right now,” says Pozzo. “The good news is that—despite the tighter labor market—the bottom line is that people still want to work for good companies. Focus on your firm’s reputation, develop a great team, offer good pay and benefits, and you’ll be able to attract the talent to support your distributorship’s growth.”

McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.

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