I started to write this article as an article about the top trends for 2010 in the land surveying and design world. After approximately 2-seconds, this is what I came up with:
- The Economy.
- The Economy.
- The Economy.
- It's the Economy, Stupid....
It really was the overriding, all encompassing and number one (through ten, or more) issue this past year. And, if it was only an issue for this past year, then that would be bad enough, but this being the third year of recession for many, a turn-around sure would've been nice.
In my mind, 2010 was the year that many finally fully came to grips with the severity of, and paradigm shift of, the Great Recession. For those who only took a minor hit in the recession's beginning, the scourge of anemic sales, tight to non-existing credit, and unemployment took hold. Even those of you with jobs still may have experienced underemployment due to reduced work weeks and the lack of work coming in the door.
If you're a business owner, 2010 may have been either the year that broke you, or the year that sets you up for future success. In either case, 2010 was a difficult year for many professional land surveyor business owners. Those that are surviving have mastered lowering their expenses, and debt load, while learning to become lean by making the most of the small amount of revenue being generated. For me, in 2010, I did experience an uptick in business, with more new projects than in any of the past three years. The projects tended to be a little bigger, too.
Unfortunately, getting paid has been as difficult, if not worse so, than at any time during the recession. Cash is king, and people are holding on to it as long as they can, if they even have it in the first place. Vendor lending, whether recognized as such or agreed to beforehand, is becoming the de facto source of funding for getting projects started. As the surveyor is often one of the first professionals in on a project, they are often brought in early to "seed" the project, if you will, with the hopes that more robust funding will be available later in the project. This often leads to hiring the land surveyor without any reasonable expectation to pay him or her when the work is done - which has always been the case, it's just gotten much worse lately - in effect leaving the land surveyor to "fund" the project initiation by carrying the expenditure of materials and services while waiting to be paid.
So, while the lousy economy is the overarching issue in 2010, within that funk, these are a few of the major economic issues for land surveyors and development/design professionals.
- The Collapse of the Housing Market - The economy just hasn't flushed itself of the overblown "bubble" pricing and over-supply. This is very evident by the record number of foreclosures still happening, length of time houses for sale remain on the market, and the dismal new home starts.
- The Lack of Lending - OK, if you listen to the banks, they claim to be lending more freely, but from what I hear and see, the only people who are "qualified" to be lent to don't need the money. The other week, I was talking to a closing attorney, who said that his business was way up. However, he went on to say that this was mostly due to wealthy well-off individuals taking advantage of the low mortgage refinance rates, and not by the average working Joe looking to refinance their existing mortgage or buy a new home, because the banks won't lend to them (or at least make it very difficult). Regardless, the average Joe isn't very likely to jump into the housing market if he or she is worried about housing prices further dipping and possibly losing their jobs.
- The Decline of Consumer Spending - While consumer spending is finally starting to pick up, the basic business problem for 2010, like all of the recession, is lack of demand. Consumers have simply pulled back and are spending less, with an eye on reducing or eliminating their debt. Of course, those out of work are simply spending as little as they can, just to survive. Less money in the economy simply translates to less business.
- Unemployment -Add up the effects of 1-3 above, and businesses have slashed their workforces, or limited their hours worked, to reduce overhead and survive. This creates a downward spiral for the economy. I've read where it's estimated that over half of all land surveyors are unemployed. I think when you factor in those that are unemployed in addition to those who are underemployed, the cumulative effect is much, much, worse. It would not surprise me at all if the total number of unemployed/underemployed land surveyors was much higher, at least during the first quarter to half of 2010. I do think that employment for land surveyors did increase during the second half of 2010, but it was nothing to be impressed by.
That was 2010, now what's in store for 2011?
I think that in 2011, things will stay much the same. It's not that the economy won't improve. I think it will; it's just that things got so bad that even with improvement, it's going to be a difficult business and employment environment. Will the housing market "double dip"? I think it might. But, even if the housing market improves next year, which I hope it does, I don't think that that's going to be enough for many of you. If you're waiting for the housing market to return to the pre-recession "bubble" prices, you're deluded. It's going to take a long time to get back to those levels, which weren't real in the first place.
In 2011 I predict that business will still be lean and businesses will need to keep lean to survive. Employment will improve, but I think that fundamentally our industry will not ever be the same. And, I don't think that's a bad thing! With the need to keep overhead (employee costs) low and the implementation of technologies to facilitate doing that, you could surmise that the land surveying industry will not return to anything considered to be "normal" levels of employment. This may be true, we'll see.
However, we are at a crossroads where we can either wallow in the past, or we can find opportunities for today. Life and business are not about being static - everything changes and so must you! I suggest that you embrace change and grow. If you are an unemployed surveyor you must first assess if land surveying is for you. Jobs are only going to come back slowly at first, and quite frankly, I see so many surveyors who work as surveyors because it was available to them, not necessarily what challenges and fulfills them. In today's survival mode, any job is a good job, so I'm not suggesting quitting your land surveying job, if you have one, for greener pastures. Nor, am I suggesting that if you're out of work that you don't look at surveying, or any other available job, for now. Survival is good. However, now is the time to think about where you want to be in 5, 10, or more years from now? We're all trying just to survive right now, but life is short and if there's something else you'd rather be doing and the land surveying jobs aren't coming back, then now's a great time to start reinventing your future!
For those of you that are passionate about being a land surveyor, I can't stress enough that there is a transformation going on in our industry. While the past few years have focused on everyone (business and personal) is being lean to survive, being lean from now on will not be enough to survive, even if the economy gets better. Keeping overhead and costs as low as possible will still be important, but more so, so will be being smart!
Companies not hiring or retaining the smartest of workers and don't implement the best surveying and business practices and systems, risk failure from crippling productivity losses. The margins will just continue to be too tight for some time to come. You see, it's probably enough to just slash overhead and employees when work is dwindling, but, when you have to cover the cost of doing business as more and more new work comes in, you put yourself and your business out on a limb waiting for that return on investment. I predict that more businesses will fail as the economy initially gets better, just for this reason. The outlay of time, money, and materials may cripple inefficient businesses struggling to stay afloat.
“In knowledge work….the task is not given; it has to be determined.”
The important thing to remember is that land surveying, at its core, is knowledge work by knowledge workers. As a professional land surveyor and business owner, you'll need to apply the very best practices at both - surveying & business. As employees, you need to advance your skills at becoming a knowledge worker. In doing so, you will become an asset to your company and not a cost.
From a business owner's perspective, costs are both easily and happily eliminated, whereas assets are very reluctantly given up.
Wishing You a Very Happy New Year!
The struggles that we endure create the strength and experience that success is built upon. As difficult a year that 2010 was, I remain optimistic that things are beginning to turn around and I see better times on the horizon.
I'm looking forward to 2011. Please feel free to contact me to discuss how our working together can help you to meet your goals and obtain success in this new year. Here's wishing you a very Happy New Year!
Thanks and be brilliant,
Eric D. Colburn, PLS
Professional Land Surveyor Revivalist & Adviser