Savvy property managers know that finding the right year-round commercial landscaping service provider can bring tremendous value to their facilities.
With proactive communication and a partnership approach, a trusted landscape and snow removal firm can beautify your property, while keeping it safe and attracting new residents, shoppers, and other customers.
As you search for a new commercial landscape maintenance contractor or reevaluate your current provider in 2022, it’s a good time to learn more about the key drivers affecting the commercial landscape industry. While some are perennial challenges for the landscape market, others are new factors caused by the COVID-19 pandemic and the subsequent shifts to the economy.
Read on to learn more about the State of the Commercial Landscaping Market 2022, as well as what you can do to mitigate the challenges and leverage the opportunities for the properties you manage.
Table of Contents
Challenge: Supply Chain
Opportunities: Technology & Sustainability
Demand is strong for commercial landscape services due in part to a renewed appreciation for the outdoors brought on by the COVID-19 pandemic. In their homes, workplaces, and communities, people are eager to add mask-free space and fresh air to their environments.
Despite an increase in demand for landscaping services, commercial landscape contractors are not immune to the economic pressures the rest of the business world is facing. Anyone who works in property management is probably not surprised to hear that cost-related concerns are top of mind for landscaping companies.
According to Lawn & Landscape’s State of the Industry Report, published in October, the top five issues of concern for landscape contractors were:
“Labor is still a top concern, but for the first time in years, fuel costs ranked slightly higher,” the report said.
Landscape contractors are understandably concerned about fuel, although relief may be on the horizon.
U.S. regular gasoline retail prices averaged $3.02 per gallon in 2021, compared with an average of $2.18 per gallon in 2020, according to the U.S. Energy Information Administration. That’s a nearly 40 percent jump. The good news is, the agency forecasts gasoline prices will average $3.06 per gallon in 2022, up just 1 percent.
U.S. diesel fuel prices averaged $3.29 per gallon in 2021, compared with $2.56 per gallon in 2020 — an increase of almost 30 percent. The agency forecasts diesel prices will be $3.33 per gallon in 2022, also up just 1 percent.
Beyond fuel, the overall Consumer Price Index is a reflection of what commercial landscape companies — and their customers across all markets — are experiencing. From December 2020 to December 2021, consumer prices for all items rose 7 percent, the largest December to December percent change since 1981, according to the U.S. Bureau of Labor Statistics.
Despite the challenges the commercial landscape market is seeing, there are opportunities, as well. In each section below, we’ll review the key challenges and opportunities commercial landscaping providers are facing, how Schill Grounds Management is tackling them, and what property managers like you can do about them to get the most out of your commercial landscape service provider.
Labor has been one of the top issues for the landscape market for the last decade, and the economic changes brought on by the pandemic have only exacerbated the issue.
In fact, 81 percent of landscape businesses were affected by a worker shortage in 2021, according to the Landscape Management (LM) State of the Industry Report, published in December. Likewise, respondents to the National Association of Landscape Professionals’ 2021 Financial Benchmark Study pegged “finding qualified employees” as their No. 1 concern.
Of course, with worker shortages comes a dramatic increase in wages. On average, companies across the economy expect to increase salary budgets by 4 percent for 2022, the highest growth rate since 2008, according to a report from The Conference Board. “It is likely that severe labor shortages will continue through 2022,” the report said. “Wages for new hires and workers in blue-collar and manual services jobs will grow faster than average.”
We treat hiring and retention like a toolbox, using a variety of tools to remain an employer of choice. At SGM, we:
Whether you’re up for renewal or you’re looking for a new landscape provider, be ready to sign your commercial maintenance contract as early as possible.
With the challenging labor market, some contractors will take your business but may end up in a situation where they can’t service your account the way you agreed to. Reputable companies understand their capacity, will set and adhere to production limits, and will turn clients away when they’ve reached capacity. Always remember to check references before signing a commercial landscaping contract.
Additionally, make time for proactive discussions with your landscape service provider so you can plan ahead for your property’s needs. Finding room in your budget for extra enhancements is a good thing, but only if you can get the work done.
Finally, like all essential businesses across the economy right now, landscape contractors are still experiencing the effects of COVID-19 with team members being out sick due to quarantine. As a result, there likely will be times when landscaping schedules are disrupted or changed throughout the season. Please be courteous and show grace to our team members who are showing up for work on a daily basis.
Whether you’ve seen empty shelves at the grocery store or had trouble buying a new or used vehicle, it’s difficult to ignore the supply chain disruptions in our daily lives. The commercial landscaping market has not escaped product shortages.
More than three-quarters of landscape businesses were affected by supply chain issues in 2021, according to the LM report. These availability issues often affect work schedules and project timelines.
“While COVID-19 has driven the demand for lawn care and landscape services, it has also thrown a wrench in the supply chain when it comes to meeting customer desires,” according to the National Association of Landscape Professionals’ “Landscape and Industry Trends for 2022” report. “The availability of products like drainage pipes to hardscaping pavers has all been affected.”
Ken Thomas, a landscape industry consultant with Envisor Consulting, told LM that he doesn’t know when the supply chain issues that plagued the industry for most of 2021 will end.
“We’re looking at backlogs … from trucks to mowers to even apparel these days,” he said. “We’re going to have to make do with some of the equipment we have for a little bit longer while we wait on that supply chain to loosen up a little bit.”
Of course, with limited supply and increased demand comes an increase in prices. The commercial landscape industry is seeing price increases in many cost categories: vehicles and equipment, fertilizer, herbicides, plant material, hardscape materials and more.
Limited product availability and rising costs are a real concern. At SGM, we’re here to help our clients meet their budgets while still providing a high level of service.
For example, our team is trained to find alternative schedules or flexibility within the scope of work. For example, perhaps you’re used to 32 visits per year, but we can meet your needs with 28 visits? When it comes to plantings, maybe a different plant palette would still wow customers but require less maintenance and fewer inputs? We’ll help you analyze various options.
Not to mention, we’re always looking at ways to improve our efficiency and in turn pass along the savings to our clients. For example, we employ technology like GPS and routing software that allows us to more effectively plan our service schedules, meaning more time supporting your needs and greater cost savings. Our mower fleet is 70 percent propane, which offers cost savings and price stability compared to gas or diesel. And the fact that we specialize in the commercial landscape maintenance market allows us to work smarter to continuously improve the service, quality, and value we deliver to clients in our niche.
Again, the sooner you can secure a commercial landscape maintenance contract with your provider of choice, the better. Gone are the days of locking in pricing on proposals or 30 days. Costs are too volatile.
Additionally, consider truly partnering with your landscape service provider by opting for a multi-year contract. This format continues to be the smartest play for property managers. You realize the benefits of long-term planning and pricing, and we get better at servicing your property along the way.
Lastly don’t forget the benefits of old-fashioned relationship-building. Sit down with your account manager or potential landscape service provider to review your current needs. We often encounter outdated scopes of work that were written years ago and never revisited. There are many new and better ways of doing things. Spending 30 minutes proactively communicating with us may yield you savings — and even better results for your property.
Often our greatest challenges lead to our greatest opportunities, and that’s the case with today’s economic situation. Inflationary pressures, a limited workforce, and supply chain disruptions are prompting commercial landscape maintenance companies to work smarter and adapt to new, more sustainable products and services perhaps quicker than they would have otherwise.
On the heels of attending a national landscape industry trade show late last year, LM Editor-in-Chief Seth Jones observed that “batteries and robots” were the theme of the convention. When it comes to batteries, he means battery-powered handheld equipment as well as larger equipment like mowers. In terms of robots, he means robotic and autonomous mowers — from Roomba-style units to large, commercial machines.
Why are these equipment categories gaining popularity? There are several factors, including regulations and market challenges.
“It seemed like the [contractors] who have a hard-line attitude of ‘the way dad used to do it’ have softened,” Jones said. “Maybe … it’s California law AB 1346, banning the sale of new small gas engines in 2024. Other popular topics include the challenging supply chain, rising prices and labor.”
These technologies intersect with sustainability in a few ways. They reduce the industry’s reliance on fossil fuels, allowing contractors to apply less water and fewer chemical inputs, and overall lessen our impact on the Earth.
We investigate, test, and adopt cutting-edge products and services that will help us run a more efficient, sustainable commercial landscaping company. As a firm founded in Northeast Ohio, we value our proximity to Lake Erie. We believe it’s our duty to protect our precious natural resources everywhere we operate.
Here’s a look at some of our technology and sustainability efforts:
Additionally, our commitment to the environment is upheld through our values: C.A.R.E. (Consistency, Accessibility, Reliability, and Expertise). C.A.R.E. is the promise behind everything we do at Schill Grounds Management.
When it comes to technology and sustainability, the E for “expertise” leads the way. We consider ourselves protectors of your property and the environment. We ensure our team operates sustainably thanks to ongoing training and the industry’s highest credentials. In addition to meeting state requirements for licensed pesticide applicators, we are proud and active members of national and state professional organizations for landscaping and snow and ice management contractors.
As you vet and select commercial landscape maintenance companies, consider their core values, expertise, credentials, track record, and how those things may impact the company’s ability to adopt new technology and sustainability efforts. Ask the following questions to discover whether the contractor aligns with your values and needs.
Remember to keep your account manager apprised of your property’s goals and considerations around sustainability, whether you’re looking to become a LEED-certified facility or you’d just like to be more environmentally friendly. Schedule a meeting, call or walk-through to learn more about ways your provider can use new technology to green up your landscape and lessen your environmental impact.
As you can see, the State of the Commercial Landscaping Market in 2022 presents challenges, but it also offers some opportunities for your property. To learn more about how Schill Grounds Management can help maintain and enhance your landscaping year-round, contact us today.