There is no easy way to avoid economic pressures, hiring and retention challenges, or supply chain issues. However, with a good plan and strong partners, today’s MRF operators can mitigate these pressures and optimize the construction and performance of the plant.
By Jeff Eriks and Mike Huycke
MRFs are not immune from the inflation and labor market challenges faced by other industries today—inflation is at a 40-year high, and at 3.6 percent the unemployment rate is at historically low levels, and there are more jobs in nearly every sector than there are people willing to work. These facts create risks for organizations that are planning construction of new MRF facilities and those with ongoing operations.
Overcoming today’s inflation and workforce obstacles is daunting, but not impossible. Proactive management can keep projects on time and on budget and maintain positive client relationships. There are four key steps that can help any MRF project achieve its construction, operating, and productivity goals.
#1: Plan Ahead
Labor shortages impact every aspect of a MRF construction project. Consider this: without qualified CAD operators, drafting time for drawings and material submittals can be delayed. A shortage of permit review and inspection staff at local building departments can slow down a project at each phase of construction. Availability of skilled tradespeople onsite cannot only take the construction schedule off-track but also create risk and can negatively impact quality if a builder hires less qualified workers just to get the job done.
Today, builders and project managers must account for delays at every step of the project. Taking time to plan can avoid problems down the road:
• Give local jurisdictions plenty of lead time to review your project. Build relationships with staff members and communicate that you understand the pressures they are facing.
• Keep designs simple. We know of manufacturers who are turning down more complex building shells and projects because they do not have the time or the people to get them done in a timely manner. Work with your design/build team to explore ways to “dress up” a building while keeping the design simple.
• Work with a reputable design/build partner whose relationships with contractors and subcontractors can provide and schedule reliable skilled tradespeople for the job precisely when they are needed.
#2: Order Early
Suppliers are also facing the downstream effects of inflation and labor shortages. A smart hedge against inflation is to lock in prices early whenever possible. Items like building materials, fabricated parts, overhead doors, HVAC controls, and even pre-engineered metal buildings are all long lead time items that should be ordered well in advance to mitigate inflation risk and ensure an on-time delivery.
Take a proactive stance. Consider ordering direct from the supplier to slice away a bureaucratic layer. Stay well ahead of ordering so you have what you need, when you need it, at a cost that is in line with the original proforma. Some suppliers may even agree to take early delivery or store materials (potentially for a fee) until they are needed.
Ordering early also applies to MRF systems, equipment, and vehicles. Manufacturers are facing their own labor and material shortages that can layer on costly delays. The design/build specs should call out system requirements as well as mobile equipment like loaders, forklifts, and excavators. These are big-ticket items where even a small price increase could be a big blow to a project’s proforma. Identifying and ordering these things early in the process can protect the project from inflationary pressures.
#3: Engage a Specialized Employment Firm
Labor costs are a juggling act between what today’s workforce expects and what the business and market have historically borne. Job seekers have ready access to market-specific wage data and what companies are offering terms of sign-on bonuses and other perks. In-fill development near many recycling plants and the ‘Amazon factor’ are resetting wage levels and as a result, there is often a disconnect between what job seekers expect and what a MRF has budgeted.
A common labor practice is to use general “temp” help, but that is not always a cost-effective solution. It can be expensive, particularly when considering turnover, throughput, material quality, safety, and other key performance indicators.
An option is to work with a specialized workforce partner with expertise in the recycling industry. In this model, teams of full-time, permanent associates are employed by the labor partner, ensuring a stable, reliable workforce. A dedicated onsite manager is embedded at the MRF to manage the team and handle the day-to-day HR responsibilities that can easily bog down a site manager’s time. The onsite manager also provides a layer of oversight that protects against co-employment and workers’ compensation risk. Finally, a specialized workforce partner can help a MRF mitigate risk, improve system performance, and lower overall operating costs per ton.
#4: Work with Reliable Partners
A key to a successful project—one that effectively manages today’s inflation and workforce headwinds—is respect, patience, communication, and clear alignment of goals. Working with the right design/build and workforce partners can free up time for MRF operators so they can run their business, focus on their customers, and handle other daily responsibilities.
A top criterion when choosing partners is whether they understand the nuances of the waste and recycling industry. Ask potential partners about their experience and expertise in projects like yours. Make sure they know your business as well as their own, and that they can bring perspective to the job from other projects and markets where they have worked.
MRF operators should expect their design/build partner to create a solid project plan, coordinate with suppliers on early ordering to lock in prices and bring existing relationships to the project.
Operators should expect their workforce partner to collaborate daily with the site manager on matters like safety, employee morale, retention, system performance, and material quality. These topics are typically covered in a Scope of Work or business agreement and can evolve as the relationship grows.
A Good Plan
There is no easy way to avoid economic pressures, hiring and retention challenges, or supply chain issues. However, with a good plan and strong partners, today’s MRF operators can mitigate these pressures and optimize the construction and performance of the plant. | WA
Jeff Eriks is President of Cambridge Companies, a leading design/build firm serving the waste industry for more than 30 years. Cambridge carries licenses in more than 40 states and has completed 170 solid waste design/build projects, including new construction and repairs, upgrades and modifications to transfer stations, recycling centers/MRFs, maintenance facilities, landfill entrances and shops, office buildings, and more. With operational headquarters in Griffith, IN and Scottsdale, AZ, Cambridge continuously monitors the broader industry to determine needs, changes, or improvements that will benefit its clients and improve its design/build solutions. Jeff can be reached at [email protected] or visit www.cambridgecompaniesinc.com.
Mike Huycke is Vice President of business development at Leadpoint, a leading operating partner for the recycling industry, helping facilities and their people succeed. Mike is an industry veteran with nearly 25 years of experience including positions like general manager, area president, and senior VP of human resources at Republic Services. At Leadpoint, he leads the company’s business development efforts and develops mutually beneficial relationships across the waste industry. Mike is based at Leadpoint’s headquarters in Phoenix, AZ. He can be reached at [email protected] or visit www.leadpointusa.com.