Chuck Kuhn has been president and CEO of JK Moving Services for almost 40 years, but he’s never faced a test quite like this. Kuhn’s company, a medium-size independent moving service headquartered in Virginia, is inherently reliant on drivers to make the business run, but when COVID-19 hit, finding them became near-impossible.
“Prior to the pandemic, by no means was it easy to recruit and retain quality drivers,” Kuhn told Modern Shipper, “but it was nowhere near as difficult as it is today.”
Calling it a driver shortage might be a bit of a stretch, but hiring and retaining drivers is still the No. 1 concern among transportation companies, according to findings of the American Transportation Research Institute.
Watch: How SMB shippers are building resilient supply chains
But that’s just one of the many pandemic-related challenges facing small and medium-size businesses. With consumers migrating to digital channels, Keewa Nurullah and her Chicago-based small business Kido initially struggled to keep up with rising demand for her products amid supply chain hiccups that disrupted the company’s sourcing.
“Even starting in the summer, we started to notice on the product lists for some of our toy manufacturers that there were some items that wouldn’t be coming back until 2022,” Nurullah said.
JK Moving and Kido are two very different businesses. Kuhn’s company is a midsize moving service based in the rural South, and Nurullah’s is a small children’s apparel store in the heart of a bustling city. But both are SMBs, and COVID-19 doesn’t discriminate when it comes to making the lives of independent business owners difficult.
In Kuhn’s case, demand was no issue. An established business and one of the country’s largest independent moving services, JK Moving suffered a two-month decline in business at the start of the pandemic before seeing demand skyrocket.
“We’ve been taking people out of Chicago, New York, Los Angeles, and moving them to Florida, Texas, Colorado, at a pace that we’ve never seen before,” Kuhn said. “So the demand for our service, the demand for our drivers, has been higher than ever during the pandemic, and we do not see or anticipate it slowing.”
That all sounds great, but it created a problem for Kuhn: getting enough drivers to meet that demand.
Businesses and their carrier partners across the country are almost universally in need of more drivers. But that heightened competition has starved out many players since drivers have more options than ever when it comes to pay, benefits and workplace conditions, and they’re no longer settling.
So Kuhn decided to give his current and prospective drivers an offer they couldn’t refuse.
JK Moving implemented a policy that guaranteed its new and existing CDL Class A drivers a minimum annual compensation of $100,000, well above the U.S. median rate of around $53,000. But Kuhn didn’t stop there.
That’s exactly what Kuhn did. He emphasized the workplace experience of his employees by offering training programs, career counseling and development, tuition assistance, and even a wellness program complete with trainers and workout sessions, tailoring his company’s benefits to their needs.
“I’ve always viewed our drivers and movers and helpers as the most critical component of our organization there,” he said. “They’re facing our customers every day. If you’re not viewing your driver talent as a critical asset to your success, I would reevaluate quickly.”
According to Doug Ramsthel, executive vice president of Burnham Benefits, SMBs like JK Moving have much more than salary increases at their disposal when it comes to attracting drivers, or workers of any kind. For example, companies without the resources to offer hyper-competitive pay can implement things like employee assistance programs or telehealth plans tailored to the specific needs of their employees.
“Don’t just offer the best benefit package, because the best benefit package is different for everyone,” Ramsthel explained to Modern Shipper. “What you need to do is to sit back and ask yourself, ‘What employees do I want to attract to my business that I know are going to help me grow over the next two years?’”
Ramsthel noted another trend among employer benefits: an increasing focus on mental health.
“Whether it’s working alone, whether it’s struggling with the stress of the pandemic, many of those items have really brought mental health to the forefront of employers,” he explained.
Kuhn has prioritized that, too. JK Moving rolled out an employee assistance program aimed at helping employees work through any mental health issues and established a 24/7/365 live dispatch to support his fleet on the road. Kuhn and his employees also found comfort in an unlikely place: the 150-acre JK Community Farm, where drivers volunteer their time planting, growing and harvesting produce for the local community.
“Our drivers along with our employee base take a lot of pride in that program, and they enjoy seeing what we’re doing, giving back to the community and helping people that are struggling with food insecurity,” Kuhn said.
According to Andres Lares, managing partner at Shapiro Negotiations, it’s important to emphasize those unique benefits when talking to potential candidates. Hiring is more individualistic these days, he explained, and whereas people used to primarily want compensation, security and benefits, priorities have changed.
For example, one of Lares’ clients, a finance company and investment bank headquartered outside the finance hub of New York City, pitched prospective hires on the idea that working outside of the city was a way for them to differentiate themselves from their competitors in the New York City rat race. Rather than pay and benefits, the company focused on something competitors couldn’t offer.
“I think the drivers being treated with care and respect, the 24/7 live dispatch, providing them great support, making sure that they’re treated like the assets that they are –– that’s making more of a difference in retention than the $100,000 guarantee.”
With companies across the board emphasizing better pay and benefits, SMBs need to get creative in the ways they make themselves attractive to employees. Kuhn’s offer was about more than just the money –– it was about treatment and respect.
“People use the comparison apples to apples,” said Ramsthel, “but let’s say, ‘We’re not an apple, we’re an orange. And an orange is better, and here’s why.’ What that means is, maybe we don’t offer the same pay as this big company, but your experience here is going to be better. And let’s define that for you.’”
Out of stock
About 600 miles away in the South Loop of Chicago, a small business struggled at the start of the pandemic, but for a different reason. Whereas Kuhn struggled with his supply of drivers, Nurullah contended with her supply of product.
Kido, a children’s apparel brand that sells clothing as well as sustainable toys and books with a focus on cultural representation, offers a diverse range of items, but with supply chain disruptions shaking up sourcing networks worldwide, Nurullah had to pivot.
“I would say late spring, early summer, we were starting to wrap our heads around trying to find replacements for some of the best sellers that weren’t coming back, or trying to pre-order as much as we could,” she recounted.
But with the holidays fast approaching and e-commerce volume showing no signs of slowing, Nurullah was forced to get creative with her sourcing to avoid shortages of her bestselling products.
“We’re looking at Etsy for smaller sellers and people who are producing unique gift items on a smaller scale and just saying, OK, how much can we order from you? Are you open to creating a new relationship?’” she said.
Kiel Harkness, vice president at UPSCapital, the shipping insurance division of UPS, explained that the importance of sourcing partnerships during the pandemic cannot be overstated. Sourcing partnerships can help SMBs take some of the uncertainty out of keeping their shelves stocked, and partnering has never been easier.
“SMBs have the ability to be connected to millions of partners at any given time, almost at the push of a button, with widgets and apps,” he explained. “So having the right partner right now, I think, is going to help them compete on customer experience.”
Speaking of customer experience, Nurullah has transformed hers to help Kido drive sales. As the business has grown throughout 2020 and 2021, Kido has slowly moved away from being a local shop and toward a nationwide e-commerce model. Before the pandemic, the majority of Kido’s e-commerce sales were concentrated in Chicago, and while Illinois is still the business’s top online market, New York and California are now close behind.
“From the perspective of an SMB, it’s never been cheaper or easier to go to market,” Jason Stuckey, general manager at e-commerce fulfillment company Linnworks, told Modern Shipper. “When I started, we had to build everything from scratch, which took months and a lot of money. Now you can spin up an online store and get to selling online in one to two days.”
Stuckey said that adding an e-commerce channel can revolutionize sales for SMBs –– just look at Kido, which went from selling in just Illinois and Indiana to delivering to every U.S. state.
“Retail will become more of a ‘digital-first’ medium moving forward. It won’t function as the breadwinner in the relationship,” Stuckey added. “Rather it will complement the online experience. SMBs should look to get a centralized view of their customers online and leverage this viewpoint to drive a better experience in their retail stores.”
With new technologies and trends beginning to blur the line between what SMBs and larger retailers can offer, the opportunity for small business success is greater than ever –– but so is the opportunity for failure. Harkness pointed out that consumers view SMBs and large retailers differently.
“I don’t think SMBs have the luxury to expect that the consumer will in fact have a different expectation in terms of customer experience, and particularly what we’re talking about is that post-purchase customer experience,” he explained.
Shipping mishaps are inevitable, especially with e-commerce pushing order volume through the roof. According to a survey of over 1,000 SMBs from UPSCapital, 80% said that mishaps are happening more frequently and 60% said they recently had to go through the claims process for a lost or damaged shipment.
In another UPSCapital survey, Harkness found that while 35% of consumers claimed they would be more motivated to buy with an SMB if it offered a guarantee on lost, stolen or damaged shipments, 44% of respondents said that if an SMB failed to resolve a shipping mishap to their liking, they would never shop with them again.
“I think SMBs have been empowered with amazing tools to level the playing field when you talk about demand generation with marketplaces, when you talk about fulfillment options,” Harkness said. “But this post-purchase piece, SMBs who don’t have a ton of working capital to just hold extra inventory, that don’t have a ton of working capital to just refund you because you said you never received a sweater, that don’t have money to invest in CRM [customer relationship management] technology –– they’re sitting there saying, ‘What do I do?’”
Getting insurance on those shipments is one way to work around consumer dissatisfaction and the lengthy claims process, Harkness said.
So too is building a personalized relationship with customers, which Nurullah and Kido have emphasized. Kido holds monthly events and initiatives that involve the local community and give the business a face, and its social media presence brings customers from around the country and the world inside the vibrant store.
Nurullah has learned a lot since Kido was founded in 2016 as a wholly online shop.
“When we started out online, without a physical presence, it kind of felt like you were speaking into a long, dark tunnel. … It felt impossible sometimes to connect with the customer we knew was there somewhere,” she explained.
But the pandemic has taught her a thing or two about how to run a small business during a global crisis.
“Be flexible,” Nurullah said. “Try something new. I think we have benefited from being a relatively new company, and so we aren’t tied into a way that we’ve always done things. And I think that has really helped us; we’ve been very nimble.”