Brooke Chase

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So far Brooke Chase has created 28 blog entries.

Director of Plant Operations – Georgia

An exceptional opportunity for a dynamic plant operations leader to plan and implement manufacturing growth and help scale the business with a strong team of executives.

Assignment: 4316
Title: Director of Plant Operations
Industry: Cabinetry
Reports To: Sr. Vice President of Plant Operations
Location: Georgia

Our Client:

Our client is a rapidly growing cabinetry manufacturer with a forward-thinking approach and commitment to empowering people.  This privately owned company believes in rewarding the people who bring the business vision to life.

Principal Duties and Responsibilities:

  • Maintain manufacturing P&L responsibility, provide leadership and vision, increase production and reduce total cost outlay
  • Create and sustain a highly effective and efficient operational infrastructure that will support and scale with the company’s rapid organic growth
  • Work in tandem with VP of Operations to positively impact plant layout, equipment, and handling systems
  • Drive accountability through all processes and roles in manufacturing
  • Set and maintain production schedule to achieve daily production targets
  • Ensure supply chain efficiency and stability
  • Create and oversee safety and employee training with an emphasis on productivity and resource conservation
  • Establish team KPIs
  • Establish effective top-down communication between employees, management and executives
  • Communicate and maintain company core values
  • Develop additional shifts, expansion plan, and reduce manhour/product

Position Requirements:

  • 5+ years of manufacturing leadership in kitchen cabinetry
  • Previous successful operational leadership with turnaround or rapid expansion experience
  • Experience producing frameless cabinetry
  • Strong organizational skills with plant processes, layout, and efficiency improvement
  • Literate in modern ERP and online tools
  • Data and metric driven leader able to drive objective accountability across the organization
  • Excellent communication skills at all levels and in every format
  • Excellent team building and development skills


Ben Durshimer
Research Recruiter

By |2023-04-26T11:56:08-04:00April 26th, 2023|Categories: Current Searches|

EVP – Chief Operations Officer – Pennsylvania

A fantastic opportunity for a seasoned operations leader to implement a culture of continuous improvement and guide their team to tremendous success.

Assignment: 4315
Title: EVP, Chief Operations Officer
Industry: Cabinetry
Reports To: Partner
Location: Pennsylvania

Our Client:

Our client is a family-owned and growing cabinet operation with a deep commitment to quality, craftmanship, and customer satisfaction.  This company is positioned for further growth and investment in innovation and its team.

Principal Duties and Responsibilities:

  • Develop and successfully execute strategic and operational plans for the business, short and long-term goals – Sales, Programs, Capital Projects, Product, Profitability, Quality, Complete and On-Time, Budgets
  • Collaborate with the President and the board to determine annual and quarterly goals
  • Develop and maintain continual evolution model, measuring the success and direction of set goals
  • Guide the development of processes, structure, product, service, program plans, and objectives
  • Lead and coach senior management team on execution of strategy
  • Drive innovation and culture of continuous improvement
  • Develop, monitor, and implement policies in cooperation with Human Resources
  • Maintain quality and safety throughout all working areas
  • Oversee all personnel and staffing levels required to support profitable business growth
  • Ensure ethics and culture in all company practices and relations with customers, suppliers, and general public
  • Responsible for all state, federal and other compliances, including OSHA, EPA and Labor
  • Increase throughput and on-time delivery and installation
  • Materials management – inventory, purchasing, warehouse and distribution
  • Grow sales and EBITDA

Position Requirements:

  • 10+ years operations experience in an executive position
  • Excellent people and communication skills in all areas
  • “Can Do” attitude – determination to achieve goals on schedule
  • A continuous improvement mentality
  • Strong decision-making skills – sound judgment and accountability
  • Business partner mindset
  • Proactive problem solver
  • Creative, bold, innovative outlook
  • IT/ERP/SAP familiarity
  • Collaborative and consultative leadership – maintaining family and team atmosphere
  • Bachelor’s degree in related field


Ben Durshimer
Research Recruiter

By |2023-04-18T09:28:48-04:00April 18th, 2023|Categories: Current Searches|

Director of Operations – Florida

A phenomenal opportunity to develop processes, instill excellence, and provide operational leadership to a strong team with a company dedicated to culture and growth.

Assignment: 4313
Title: Operations Manager
Industry: Cabinetry
Reports To: COO
Location: Florida

Our Client:

Our client is a dynamic, fast-growing cabinet company, nimble in its approach to market demand and offers a breadth of products to reach multiple segments of the industry.

Principal Duties and Responsibilities:

  • Recruit, select, train, assign, schedule, coach, counsel an discipline employees
  • Maintain safety codes and procedures and an overall accident-free workspace
  • Analyze and improve organizational process and workflow
  • Establish operations systems and processes for receiving, equipment utilization, inventory management, and shipping
  • Prepare annual budget, manage expenditures, and initiative corrective actions
  • Meet or exceed operations labor budget expectations
  • Manage staff levels, wages, and hours
  • Maintain effective management of department leaders, with review/approval responsibility for all operations employees
  • Establish contractors and pricing, ensure proper maintenance, and serve as the primary liaison with utilities and local government agencies
  • Manage relationships with key operations vendors
  • Track vendor pricing, rebates, and service levels
  • Serve as primary point of contact for customer issues related to quality, on-site safety, and customer service
  • Work cross-functionally with the executive team to improve customer experience
  • Ensure compliance with OSHA and other governmental regulations
  • Work closely with inventory management team to perform analysis and reduce expenses
  • Communicate all operating policies and concerns at department meetings

Position Requirements:

  • 7+ years of operations leadership in cabinetry
  • Understanding of the import market
  • Excellent problem solving skills
  • Strong work ethic and dedication to task completion
  • Proven track record of successful operations experience
  • Strategic thinker with practical hands-on implementation skills
  • Excellent communication skills at all levels and in every format
  • Bachelor’s degree in related field


Ben Durshimer
Research Recruiter

By |2023-04-17T09:20:24-04:00April 15th, 2023|Categories: Current Searches|

National Sales & Marketing Manager – Cabinet Group

This is a career growth opportunity for an outstanding sales professional to achieve sustainable profitability and expand product through a robust network of branches.  This leader will drive sales and marketing initiatives with no ceiling for growth.

Assignment: 4312
Title: National Sales & Marketing Manger – Cabinet Group
Industry: Cabinetry
Reports To: Regional Vice President(s)
Location: Near any major airport

Our Client:

Our client is leading wholesale distributor of specialty products, whose long history of success and continuous growth is backed by a commitment to the highest quality goods and impeccable service.  They have invested time, capital, and all other resources in growing their business and the people involved.

Principal Duties and Responsibilities:

  • Responsible for the growth of cabinet sales throughout US network of branches
  • Utilize customer engagement data, market trends, and sales and business insights to conceive multi-channel marketing campaigns
  • Work with regional and branch leadership to develop sales and marketing strategies
  • Develop key relationships with Vendors and Customers
  • Lead strategy, planning, and execution in all relevant area of sales and marketing

Position Requirements:

  • Revenue-centric, data-driven marketer with proven success in designing and executing marketing strategies to support business objectives
  • 10+ years of relevant sales experience, managing national accounts in the building products industry (cabinet experience preferred)
  • Track record of producing strong, consistent sales growth within a rapidly growing company
  • Experience negotiating with large customers and aligning on mutually beneficial solutions
  • Entrepreneurial mindset (i.e., wiling to think creatively to find effective methods for getting the job done with limited resources and a willingness to pitch in wherever and whenever the team needs help for the betterment of the overall business)
  • The ability to “self-generate” leads and sales opportunities in the marketplace
  • Willingness to do whatever it takes to get the job done – even if it falls outside of the candidates’ job description


Ben Durshimer

By |2023-02-22T12:10:16-05:00February 22nd, 2023|Categories: Current Searches|

Region Manager HVAC – Southeast

The opportunity to operate with the freedom and passion of an entrepreneur and lead the company’s fastest growing segment to further success.  Build talent, champion culture, and win financially.

Assignment: 4311
Title: Region Manager HVAC
Industry: HVAC & Plumbing Distribution
Reports To: Division Manager
Location: Southeast US

Our Client:

Our client is the nation’s largest privately held wholesaler of plumbing & HVAC products, dedicated to a culture of core values, high performance, and relentless focus on people.  As an organization of energized leaders, they have demonstrated a long history of growth and profitability and remain a world-class employer and business partner.

Principal Duties and Responsibilities:

  • Select and recruit a world class team of Profit Center Managers through performance feedback and inspirational leadership
  • Promote a culture of high expectations, consistent practice of our core values, and a deep understanding of our Key Business Principles and Strategic Priorities
  • Manage key business and financial expectations
  • Develop key partnerships with Vendors and Customers
  • Identify and promote strategies to increase sales, improve financial results, and expand market relevance with the Region/Division

Position Requirements:

  • 10 years leadership and management experience in HVAC Distribution
  • A work history demonstrating progressive responsibility in the areas of P&L, growth initiatives and strong reputation for ethics and integrity
  • Willingness and ability for business travel 60% of the time, primarily within the region
  • Strategic thinker who possesses excellent general management, sales management and business development skills coupled with strong financial acumen
  • Strong history of sales and sales management while building influential relationships
  • Excellent written and verbal communication skills
  • Is driven, energetic, well-organized, entrepreneurial, disciplined, unpretentious, resilient, courageous, and influential


Ben Durshimer

By |2023-01-30T12:25:17-05:00January 30th, 2023|Categories: Current Searches|

Chief Marketing Officer – Southeast

We are looking for a passionate Chief Marketing Officer to join our executive team.  You will report directly to the COO and lead our superb in-house marketing team.  Your duties will include managing all marketing operations, assessing, and improving existing initiatives, and devising new strategies to increase revenue.  To be successful in this role, you will be able to tailor marketing strategies to complement the organization’s objectives.  You will have excellent leadership and communication skills to successfully provide guidance to your team, and you will have a vast knowledge of current marketing trends.

Assignment: 4310
Title: Chief Marketing Officer
Industry: Woodworking
Reports To: COO
Location: Southeast

Our Client:

Our client is a well-established, highly respected, privately-owned manufacturer, this profitable company is experiencing its highest ever level of sales.  Its current investment in innovation and capital projects to expand into new markets and opportunities, and its long-standing commitment to the workforce ensure continued growth.

Principal Duties and Responsibilities:

  • Planning, implementing, and overseeing all marketing and advertising campaigns
  • Liaising with sales and public relations teams to align objectives
  • Growing and developing the in-house marketing team
  • Building a network of reliable external agencies and marketing professionals
  • Conducting market research and staying abreast of competitor positioning
  • Contributing to new business development initiatives
  • Budget management

Position Requirements:

  • Bachelor’s degree in business, marketing, communications, or related field
  • A Master’s degree in marketing or a related field or an MBA may be highly desirable
  • More than 8 years’ proven experience in a marketing manager or business development role
  • Excellent analytical and leadership skills
  • Creative and entrepreneurial spirit
  • Exceptional knowledge of marketing techniques and platforms


Mark Otto

By |2023-05-13T12:06:07-04:00January 23rd, 2023|Categories: Current Searches|

Employers Take Note: FTC Releases Notice of Proposed Rulemaking Banning Worker Non-Competes

The Notice would ban all existing and future non-compete agreements with workers, with a narrow exception in connection with the sale of a business by any individual holding at least a 25% interest in such business.

January 9, 2023
Thanks to Pillsbury Winthrop Shaw Pittman LLP


  • The FTC has published a proposed rule for a nationwide ban on non-compete agreements with workers, including non-employees who perform work for employers.
  • The proposed rule includes an exception for owners of at least 25% of a business in connection with the sale of such business, but the FTC is soliciting comments on whether the final rule should include additional exceptions.
  • Any final rule is likely to include additional changes and face legal challenges to the FTC’s authority.

Citing its interest in promoting competition and opening up “better employment opportunities” for workers, the Biden Administration is moving forward with a proposal to prohibit a feature of many U.S. employment relationships valued by employers and of significant importance in M&A transactions; non-competition agreements.  Rather than looking to Congress to enact legislation to achieve this goal, the Administration is relying on the authority of the U.S. Federal Trade Commission (FTC) to enforce and engage in rulemaking under existing antitrust laws.

In July 2021, President Biden signed an Executive Order directed at promoting competition in which he encouraged the Chair of the FTC “to exercise the FTC’s statutory rulemaking authority, under the Federal Trade Commission Act, to curtail the use of non-compete clauses and other clauses or agreement that may unfairly limit worker mobility.”  The FTC was listening.  In November 2022, the FTC releases a policy statement to reinvigorate Section 5 of the Federal Trade Commission Act (FTC Act), which bans unfair methods of competition.  Then, on January 4, 2023, the FTC announced that it found that three firms had engaged in unfair competition by using illegal non-compete agreements with their workers.

The very next day, on January 5, 2023, the FTC released a Notice of Proposed Rulemaking (NPRM) proposing to ban all non-competes entered into between employers and workers.  If ultimately adopted, the rule will apply both prospectively and retroactively, including with respect to the estimated 30 million Americans who are currently subject to non-compete agreements.  This proposed rule has implications for companies across the entire country – even companies operating solely in jurisdictions like California that already ban non-competes – and for the merger and acquisition process.  The proposed rule contains only a single, narrow exception for non-competes in the sale of business context: a person selling a business entity, or otherwise disposing of all of their ownership interest in the business entity, may be bound by a non-compete only if they own 25% or more of such business.  This narrow exception is far more restrictive than even California’s sale of business exception.  The proposed rule also applies beyond the employment context, covering workers who fall outside the traditional definition of “employees.”

The FTC voted 3-1 to publish the NPRM, with Commissioner Christine S. Wilson voting no and issuing a dissenting statement attacking the rule as a departure from “hundreds of years of legal precedent” and arguing that the rule “will trigger numerous and likely successful legal challenges regarding the Commission’s authority.”:  The FTC seeks public comment on several topics, including whether the rule should impose a categorical ban on non-compete clauses or a rebuttable presumption of unlawfulness, and whether certain categories of workers should be exempted from or treated differently under the rule, such as senior executives or higher wage workers.  Comments are due within 60 days of the rule’s publication in the Federal Register.

The rule proposes an effective date of 60 days, and a compliance date of 180 days, after publication of a final rule in the Federal Register.

The Substance of the Proposed Rule
According to the FTC, researchers have found that use of non-competes has negatively affected competition in labor markets, resulting in reduced wages for all workers across the labor force, both those with and those without non-competes.  The FTC estimates that the proposed rule could increase workers’ earnings across industries and job levels by $250 billion to $296 billion per year.  The FTC further asserts that researchers have found that non-competes have negatively affected competition in product and services markets and innovation.The FTC, therefore, pursuant to Sections 5 and 6(g) of the FTC Act, deems employers’ use of non-competes an unlawful “unfair method of competition.”  Specifically, the proposed rule provides that it is an unfair method of competition for an employer to enter into or attempt to enter into a non-compete clause with a worker, to maintain with a worker a non-compete clause, or, under certain circumstances, to represent to a worker that the worker is subject to a non-compete clause.  In addition, the FTC intends for this to be the governing law of the United States.  The proposed rule contains an express preemption provision noting that the “Rule shall supersede any state statute, regulation, order, or interpretation to the extent that such statute, regulation, order, or interpretation is inconsistent with the Rule.”

Significantly, the proposed rule applies to “workers,” broadly defined to include any “natural person who works, whether paid or unpaid, for an employer,” even if not a statutory employee.  The term “worker” includes “without limitation, an employee, individual classified as an independent contractor, extern, intern, volunteer, apprentice or sole proprietor who provides a service to a client or customer.”

The proposed rule focuses only on non-competes governing work restrictions post-employment and only on those between employers and workers and not, for example, on non-competition agreements between businesses.  The Department of Justice, however, already takes the position that business-to-business agreements not to poach each other’s workers may be considered unlawful under the Sherman Act.

The proposed rule prohibits non-competes and their functional equivalents.  The Preamble to the proposed rule states that the definition of non-compete clause “would generally not include other types of restrictive employment covenants – such as non-disclosure agreements (NDAs) and client or customer non-solicitation agreements – because these covenants generally do not prevent a worker from seeking or accepting employment with a person or operating a business after the conclusion for the worker’s employment with the employer.”  The Preamble cautions, however, that “such covenants would be considered non-compete clauses where they are so unusually broad in scope that they function as such.”

In addition to prohibiting employers from entering into non-compete clauses with workers, the proposed rule would require employers to rescind existing non-competes and provide notice to applicable workers that their non-compete clause is no longer in force and effect.  The proposed rule includes model language that satisfies this notice requirement and establishes a safe harbor whereby an employer can satisfy the rule’s requirement to rescind existing non-competes by simply providing relevant workers with a notice in compliance with the notice requirement.

As noted above, the proposed rule includes a limited exception for non-competes between the seller and buyer of a business where the party restricted by the non-compete is an owner, member, or partner holding at least a 25% ownership interest in a business entity.  This exception is likely to send shockwaves through the private equity world and will have a profound impact on mergers and acquisitions if the rule takes effect.

The proposed rule unfortunately leaves many questions unanswered.  For example, it is not clear if:

  • A partner in a partnership, such as a worker who holds profits interests in an LLC taxed as a partnership and receives income reported on a K-1, would be deemed a covered “worker.”
  • A distinction can be made between a post-employment non-compete and a non-compete that has a fixed time-based duration applicable regardless of employment status.
  • Companies could still impose restrictions on competitive acts in exchange for the grant of equity or deferred compensation to an employee, and, if such employee engages in competitive acts, whether companies would be able to claw back such grants.

Commenters should request that the final rule address these more nuanced issues.

The Proposed Rule’s Uncertain Future
The substance of this proposed rule is likely to change given the FTC itself is soliciting input on the several key matters, including whether non-competes for senior level or high-wage employees should remain viable.  Moreover, as Commissioner Wilson notes in her Dissenting Statement, the rule is likely to trigger numerous legal challenges.  Indeed, the U.S. Chamber of Commerce almost immediately issued a statement questioning the authority of the FTC to promulgate such a rule: “Today’s actions by the Federal Trade Commission to outright ban non-compete clauses in all employer contracts is blatantly unlawful.  Since the agency’s creation over 100 years ago, Congress has never delegated the FTC anything close to the authority it would need to promulgate such a competition rule.  The chamber is confident that this unlawful action will not stand.”

Commissioner Wilson highlights three likely arguments in response to the proposed rule in her Dissenting Statement: (i) the FTC lacks the authority to engage in “unfair methods of competition” rulemaking under the FTC Act; (ii) under the major questions doctrine, the rule is a major question requiring clear Congressional authorization to impose a regulation banning non-competes and such authorization does not exist; and (iii) under the non-delegation doctrine, Congress cannot delegate its legislative power to the FTC.

These legal challenges could take months, if not years, to reach an ultimate resolution, leaving employers in a difficult position with how to manage non-competes.

Employers Must Ensure Current Compliance with Applicable State Law
Non-competes are not only under attack by the FTC; they are increasingly under attack and disfavored by legislatures across the country.  While waiting for a final answer on the applicable federal non-compete law, employers must ensure that they are compliant with the increasingly varied non-compete state laws across the country.

California, North Dakota and Oklahoma, for example, each have general prohibitions of non-competes (and California and North Dakota also prohibit non-solicits of customers and Oklahoma permits only non-solicits of an employee’s established customers).

An increasing number of states permit non-competes only for exempt employees or employees making more than a statutory minimum.  As of the date of this Alert, these states include Colorado, Illinois, Maine, Maryland, Massachusetts, Nevada, New Hampshire, Oregon, Rhode Island, Washington, and Virginia as well as the District of Columbia. Some of the statutory minimums are quite high.  For example, as of the date of this Alert, employees must make at least $150,000 to have a non-compete in the District of  Columbia, $101,250 in Colorado, and $116,593.18 in Washington.

An increasing number of states also have laws prohibiting forum selection and choice of law clauses designating any jurisdiction other than their own state.  Such laws are currently in place in California, Colorado, Massachusetts, and Washington.

In addition, an increasing number of states have enacted laws prohibiting employers from enforcing non-competes without pay during the restricted period, such as Massachusetts and Oregon.

Next Steps for Employers
In this current climate of remote work and employees working across the country, employers are well advised to work with their employment counsel to ensure that their current restrictive covenant agreements comply with all potentially applicable state laws.

In addition, in preparation for the possibility of a nationwide ban on non-competes, employers should work with their employment and intellectual property counsel to ensure that their existing agreements independently offer sufficiently robust protection of their confidential, proprietary and trade secret information.

By |2023-01-13T14:07:27-05:00January 13th, 2023|Categories: Articles|

What Business Owners Should Know About Financial Forecasting

Courtesy of Kerkerin Barberio

Is your business ready to tackle the challenges and opportunities that lie ahead in 2023?  Financial statements show how a company has performed in the past.  But historical data doesn’t necessary predict future performance, especially in an uncertain, volatile market.  As part of your planning, it’s important for management to prepare forecasted statements.

Make Reasonable Assumptions
The purpose of forecasting is to obtain the most realistic picture possible of a company’s future performance for as far out as management can look.  Forecasts provide important information that can be used to make decisions, such as:
  • When working capital shortages are likely to take place – and whether the line of credit is sufficient to bridge cash flow gaps.
  • How much inventory, including raw materials, parts and finished goods, the company should purchase each month.
  • Whether the company has the right mix of employees to meet its operational goals – and how it should remedy any deficiencies (or excess capacity)
  • Which fixed assets should be retired (or acquired).

A forecast is typically organized using the same format as the company’s financial statements: an income statement, balance sheet and cash flow statement.  Most conclude with a statement of assumptions that underlie key numbers in the forecast.  A detailed forecast of revenue drives many of these assumptions.

Roll with the Punches
Mangers use forecasts in their annual budgeting and strategic decision-making processes.  But many budgets and business plans are out of date before the end of the first quarter.  That’s because today’s complex, dynamic markektplace is almost impossible to forecast with certainty.  As a result, many companies have replaced traditional annual budgets with rolling 12-month forecasts that are adaptable and look beyond year end.

Creating a meaningful rolling forecast necessitates ongoing comparison between forecast and actual results.  This enables management to unearth and respond to weaknesses in forecast assumptions and unexpected changes in the marketplace.  For example, a retails store that suffers a data breach could experience an unexpected drop in revenue.  If the company maintains a rolling forecast, it would be able to revise its plans for temporary inventory decreases, as well as technology and marketing cost increases related to remedying the breach.

Consider External Market Conditions
Almost all forecasts begin with historical financial results, but that’s only a starting point.  These days, you can’t automatically assume current revenue and expenses will grow at a constant rate commensurate with inflation.  Management needs to evaluate the marketplace for emerging external threats and opportunities.  For example, health care providers need to anticipate how emerging government regulations, including the CDC and FDA guidance, will affect their future revenue and expenses.

Examples of other external obstacles that management can’t change, but may need to factor into forecasts, include rising energy costs, evolving weather patterns, and changes to tax and labor laws.  On the other hand, changes in technology – including the growing popularity of social media and smart devices – may create marketing opportunities that proactive businesses can use to their advantage.

Savvy managers watch how competitors are performing under the same market conditions.  In an evolving market, the performance of competitors – especially market leaders – is often more meaningful than historical results.

Evaluate Forecasting Risks
Once you’ve developed your preliminary forecast for 2023, consider performing a sensitivity analysis to identify which components are most critical to your business’s success (or failure).  Sensitivity analysis starts with a base case scenario.  Then assumptions are changed – one at a time – to see how the changes flow through the financial statements.

An input is more “sensitive” and, therefore, has high forecasting risk if a small change in the assumption has a large effect on the bottom line (or asset values).  If the most sensitive variables in your forecast are also the most unpredictable, you may need to monitor the situation closely to minimize problems.

Team Effort
Forecasts that employees perceive as dictatorial mandates are doomed to fail.  Reliable ones are based on input from all functional areas, including finance, sales and marketing, operations and human resources.  Cross-functional collaboration on forecasts can help you balance predicting demand with planning for supplies, catching errors and omissions, and achieving companywide buy-in.

Getting input from your financial davisor helps, too.  In addition to providing objective market data, experienced financial professionals understand financial reporting and offer fresh perspectives that can breathe new life into your company’s budge tor business plan.

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forecasts vs projections sidebar image
By |2023-01-09T15:13:30-05:00January 9th, 2023|Categories: Articles|

Breaking Down the Myths of Housing, Affordability, and Supply

By:  Matt Meyers, CEO of Yesler
Yesler CEO Matt Meyers takes a in-depth look at the state of U.S. housing and how we arrived at the current state.

The housing market.  To many, it’s crazy and unknowable.  It always seems in flux and getting more expensive, usually.

The widely accepted narrative is that homes are not affordable, because prices are so high.  But, high prices and affordability are two different things, with the majority of buyers borrowing to purchase their homes.

Can historic data help put our current market circumstances into perspective?  I think so.  Seeing the data will give you a different perspective on the housing market.  For example:

  • What is the underlying demand for housing?
  • What impact do interest rates have on the housing market?
  • Do we have a housing shortage?  Do we have an affordability problem?
  • Is it increasing or decreasing?

With an open mind and data, you may come to new conclusions about the current state of the US housing market and what the future holds.

Data sources
Most pundits, forecasters and consultants use U.S. Census Bureau or Housing and Urban Development (HUD) data.  In this article, I rely exclusively on The Federal Reserve Bank of St. Louis (FRED) data, which pulls from these government sources.  They provide an excellent interactive site to review all kinds of U.S. data.

Historic housing starts
About 25 years after the GI bill supported veterans in buying a home, their children, the Baby Boomers, were in need of housing.  The year was 1971, and by that time the US was well suited to supply it compared to the rest of the war-impacted cities of Europe and Asia.  The increase in demand from new households for the Boomer class showed up in new home construction.

Observe the peaks of the market since the 1960s, and you may be surprised to see that the peak wasn’t 2006.  The Baby Boom created the biggest housing boom.  Now draw a line connecting all the peaks since the early 1970s and you’ll see that line is down.  Draw a line connecting all troughs, and that line is down too.

That begs the question: Has the housing market been underbuilding for 50 years through 7 recessions and widely varied fiscal policy?  Or has demand for new U.S. housing starts been declining for decades?

What has happened to home prices over the same period?

Up, up, and up, with a few dips along the way.  How is this possible over a very log period?

Incomes must have risen too.

Note that this chart starts in the early 80s, not the 70s.  Examining the numbers, it looks like home prices (prior chart) have risen faster than incomes.  That must mean homes have become less affordable.  Unless, there is another factor – interest rates.

And interest rates?

The dramatic decline in interest rates created cheap money, for those borrowing on 30-year mortgages.  The recent spike to 6% or slightly higher is still low, from a historical perspective.

One chart that combines the three prior charts.

Here is the narrative: income has risen gently, interest rates have fallen dramatically, and home prices have risen faster than income!

The critical question:
Which has a greater impact on housing prices in the US?

1. Household income,
2.  Interest Rates

Based on this view of the data, I’d guess B – Interest rates.

What has happened to affordability in the US?
The following chart illustrates the relationship between the three variables of US Median Household Income, US Median Home Price, and interest rates.  The data is the same FRED data downloaded into a spreadsheet to calculate what can a buyer afford (the GREEN LINE) under the following conditions:

  • 20% down payment
  • 28% housing debt to monthly gross income ration (good assumption for mortgage approval) using US median household income reported for the year
  • Prevailing interest rate on the first FRED reported day in January of the year

The green line, what a buyer can afford, is higher than the median US home price (black line)!  Prior to 2007, the median sale price of a US home was closely matched to what a buyer could afford.  After 2007, homes became much more affordable due to lower costs of borrowing, even though prices were higher!

What about 2022?
What happens to the green line under the following hypothetical circumstances:

  • If median household income increases 5% in 2022 due to inflationary pressures.
  • If US Home prices slow their pace of escalation and only increase 5% in 2022.
  • If interest rates climb to 6% average for the year.
Then home prices relative to buying power become matched again, just like they were from 1985-2006.

Finally, what about the underlying demand for housing?  Don’t we have a shortage?

History tells us (back up to the first chart for reference) that the demand for housing was about 1.5 million annual housing starts until the 1980s, and since then, it’s been about 1.3 million.  That’s simply taking averages for those periods.  The number of recessions and corrections indicate the market is working!  When there are too few or too many homes, the laws of supply and demand take over to clear the surplus or fill the deficit.

To predict the future, using the past, I suggest demand will stay at about 1.3 million units unless three principal factors that affect new demand change course.

First, the mortality rate.  With the onset of COVID, mortality rates rose, and thus, underlying demand for new housing fell.  We can hope this factor will return to normal.

Second, the rate of births in the country has been declining for several decades, reducing new household formation.  If we have another boom, history tells us it will take 25 years to show up in demand for housing.

Third, and politically controversial, is immigration.  More immigrants would bolster demand for new housing.

It’s not demand that has driven prices higher, because underlying demand factors are not in favor of increasing housing starts; rather, it is historically cheap money!  With historically low borrowing costs, more money has flowed into real estate, driving competition and prices higher.

What does the recent dip in US housing starts suggest about the economy?  Go back and look at the first chart in this article and decide for yourself by asking this question: Do recessions (shaded areas) precede or follow peak housing production?  It should be an interesting 2023 for the housing market!

(Matt Meyers is the founder and CEO of Yesler, the Seattle-based lumber and building materials digital marketplace.)

By |2022-12-14T18:16:42-05:00December 19th, 2022|Categories: Articles|

Bigger is Not Always Better When Selecting a Search Firm Partner

By:  Kelli Vukelic, CEO of N2Growth

Senior leadership hires can make or break an organization.  Various studies show that the failure rate of executives coming into new companies is 30 to 40 percent after 18 months.  In a hiring market, like the one we’re currently experiencing, finding a true game-changing leader is extremely challenging.  Furthermore, making a hiring mistake is extremely costly in terms of both direct and indirect costs.  So how do you find those top performers and disrupters that can take your organization to new heights?  Internal recruiters do not have the tools or abilities to fill these critical leadership roles, their ‘open requisition’ stack is too full, and all roles get equal attention, whereas the most critical ones need a dedicated team.  Once you recognize that an external search professional is needed, the decision for which one should be solved with a different calculus than in the past.

With demand for top executives outstripping supply choosing the best search firm to partner with can have a critical impact on the future of your organization.  There are thousands of U.S. executive search firms who are looking to help to place talent in organizations.  So how do you decide on which firm is the best fit?  Should you use a large firm whose name is familiar to you because of ads and billboards?  Or should you partner with a more niche, local boutique?  Or should you consider a new emerging category of super elite boutiques that give you the best of both worlds, international reach, and creative, disruptive thinking?  “I would caution that size is not always an indicator of success, and more importantly not a risk mitigator,” said Kelli Vukelic, CEO of N2Growth.  “A small elite class of boutique search firms is achieving this, providing you all of the executive search solutions of larger firms, but with a more hands-on, better resourced approach.  There is no one-size-fits-all solution to placing C-suite candidates.  One-size-fits-one and having worked at both ends of the spectrum, here are my points for your consideration.”

Plethora of Choices
There are countless options when it comes to executive search firms.  On one end of the spectrum are the incredibly large firms, which come with big brand name recognition, high overhead, and revenues reaching into the billions annually, according to Ms. Vukelic.  “Several of these publicly traded firms have good reputations, but they have historically catered to Fortune 500 companies,” she said.  “If your organization is not a Fortune 500 company, your search can easily get lost in the shuffle or pushed down below the partner level, and placement costs can quickly exceed your price range with antiquated administrative fees that cover big overheads.

On the other end of the spectrum, however, are boutique search firms.  “You may be skeptical of these smaller enterprises, fearing that they lack the resources and experience to find the right executive for your organization,” said Ms. Vukelic.  “But these fears are often unfounded – in fact, boutique firms are often better resourced, making them a better fit for your search.”

Personalized Approach
When engaging with a boutique firm, you are more likely to deal directly with the person or team leading your project.  Typically, Ms. Vukelic notes that boutique firms create team structures to work on projects, and their “top-to-bottom” approach offers the client extraordinary attention to detail.  “They can assess a client’s unique needs and then customize their approach accordingly,” she said.  “An agile process allows time for listening, connecting, coaching, and advising.  This personalized approach allows boutique firms to place candidates who are technically, academically, and culturally additive to the organization.  This sets both the client and candidate up for success on the first go-around, saving everyone involved valuable time, money, and energy.”

By working with a boutique search firm on your C-suite placements, it is highly likely that you will interface and deal directly with the senior leadership of the company, according to Ms. Vukelic.  “Direct interaction with the leader of the firm builds trust, allows you to voice any questions or concerns you may have, and get a real-time answer from a key executive,” she said.  “A boutique firm will invest in learning your culture and talent needs.  The senior engagement leader that works with you from the onset of the search will lead the process, speaking to every prospective candidate on your behalf.  In a noisy recruitment market, where candidates have the upper hand, who do you want to tell your story and be that extension of you in the marketplace?”

By contrast, when engaging with a large firm, Ms. Vukelic explains that you may only speak with a partner occasionally as they are likely busy chasing billings and not focused on your search day-to-day.”  Larger firms often delegate key work to less tenured associates that you have never met and who have only second-hand knowledge of your organization and its needs,” she said.  “They also have limited experience, meaning they bring a narrower perspective to the candidate process.  These are the people telling your story in the marketplace.  This can result in candidates whose resumes match your specification on paper but may not align with your goals or add anything new or different to your culture.  Large firms are usually in a constant state of growth, which limits the attention they can pay to your search.  A sizable client base may be great for them, but it might no be best for you.”

Boutique search firms take the time to learn the intricacies of their client’s company culture and goals.  They operate with the understanding that trust is built every day and with each interaction, not bought with brand name recognition.

Greater Candidate Pool
“Executive search firms have an ethical and contractual obligation not to recruit from clients,” Ms. Vukelic said.  “Because large firms conduct business with so many organizations, they have significant hands-off limitations which limit their recruiting strategies.  Candidates that are active on a search within a firm are also off-limits for other searches.  With large firms, this can equate to thousands of candidates who are unavailable to your search, severely limiting the talent pool.”

By |2022-12-14T18:17:03-05:00December 16th, 2022|Categories: Articles|
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