2 min read February 2022 — James Donnelly, founder and CEO of Castle Group, met with Invest: and discussed how the growth the county is experiencing is changing the way he strategizes. He highlighted the trends in Broward County that are driving growth. He also spoke on what employers can do to address the scarcity of workers and the strategies that can alleviate this stress on companies.
What were the key challenges you faced in the last year?
Our primary challenge in the last year has been the labor shortage. We have more open positions and fewer applicants than at any time in our history. It’s a great time to look for a job because you can be very selective. Over the last 25 years, the employer has been able to choose who they want to hire. The effects of the pandemic have flipped that power dynamic. It is a serious challenge for all industries.
What differences do you see in this post-pandemic power dynamic?
The demographic change in the country is that our population is not growing as fast as the economy. The key to solving that problem is immigration but we don’t have adequate policies to increase it. COVID did a couple things: one, our government decided to pay people to stay home. Two, couples who had two incomes reconsidered their priorities and decided that one parent would stay at home. We might see an inflection point where families take another look at how they allocate time and philosophically don’t see meaning to having both parents working full time. I see a movement back toward a little more balance of work and family. If a significant portion of families decide to have one parent stay home, the labor force will have permanently shrunk. Third, a lot of people over 60 years old decided to retire early. About 3 million baby boomers retired earlier than they would have if the pandemic had not occurred.
How are you realigning your priorities in the face of worker scarcity?
Whenever you face a problem, you start implementing different solutions, starting with the easiest one: give workers as much flexibility as you can. Millennials and younger generations have a very different outlook on work-life balance than my generation. We must adjust to be more flexible. That means remote work is available, we offer flexible hours and we’ve relaxed some of our policies to reflect the next generation of our workforce. The greatest benefit from this whole thing as an employer is that it doesn’t affect profits to be more flexible.
What’s the effect of the Florida political climate on your business?
In Florida, we have a huge net in-migration effect due to our climate, economy, and low taxes. People are moving to Florida at a pace of approximately 750 per day. On average we have 3 people per household so that means we need 250 new housing units per day! The average community is 250 units, which means 365 new residential communities that must be built and managed every year.
Another factor that is impacting us is the sea level rising. As chair of the Community Foundation, I have seen how climate change is affecting all elements of society. The South Florida counties have an economic resilience work group to create a coordinated response to climate change. Step one is figuring out how to fix it, and the second immediate question is: how much is it going to cost the business community to support those initiatives? You’re going to see dramatic changes over the next few years in real estate. Developers are going to have to change their communities to respond to climate change and that is going to impact the property management business.
The social unrest and spotlight on diversity, equity, and inclusion has caused companies to recognize the role business must play in doing its part to help with this chronic issue. At Castle Group, we have created a DEI committee and one of the specific recommendations was to create a floating holiday in addition to statutory holidays. This change was to allow our teammates to celebrate the days that are special to them. It came out of the discussion on recognizing Juneteenth day.
How are these trends affecting your operations?
Fort Lauderdale is experiencing an unbelievable in-migration of young professionals. This has resulted in a huge uptick in multifamily, residential development, especially in Downtown Fort Lauderdale. That has accelerated the development of Downtown and the Greater Fort Lauderdale area. But it has become a huge problem in terms of housing scarcity and prices. Broward County has done a lot for affordable housing, allocating more money than ever before but more needs to be done.
Another trend we are seeing in the condominium market is a shift from self-management to professional management. Historically about a quarter of all condos and HOA’s have been self-managed. Buildings are getting older and compliance with Florida’s increasingly complex laws is becoming more challenging for Boards. The Surfside tragedy made Boards realize how important it is to hire experts in all facets of managing their community.
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