Advice and Preliminary Policy From a Midsize Builder During the Pandemic

Al Trellis, president of Home Builders Network, gives his suggestions for how builders can respond to the pandemic and an example of a preliminary policy by a midsize home builder

By Al Trellis | March 16, 2020
three workers review COVID-19 precautions on the construction jobsite
Tap trusted sources, such as the Centers for Disease Control and Prevention, for information to create coronavirus strategies for your business, and then make sure all employees are kept up to date. | Photo: Photographee.eu

 

Several of our clients have reached out to us about our opinion regarding the coronavirus. Here are our thoughts:

1] Coronavirus' full impact 

The full impact of the Corona virus pandemic has yet to be determined. While the public’s anxiety is sky high, the facts are far from clear. The percentage of people who will be infected, the true fatality rate, and even the actual length of the contagion period are all still uncertain. The best strategy for now is to listen to reliable information sources (Centers for Disease Control and Prevention, World Health Organization), and based on the facts, as they become clearer, create policies and procedures for your employees and trade partners regarding work conditions and personal safety (see the example of such a policy, below). It is important that senior company personnel set a good example and remain calm and objective. As much as we all want to “do something,” at the moment we really need more clarity as the situation develops.

2] Backlogs and efficient building

Do a fairly detailed analysis of your sold houses in backlog, and to the greatest extent possible, do whatever you can to assure that these houses get built as quickly and efficiently as possible. This study should consider such things as price protection on materials, firm commitments from trade partners, and the availability (and possible stockpiling) of materials which may be affected by supply chain disruptions. Protecting your existing sales should be a high priority.

3] Competing drivers

Buyers may become more scarce and more skittish, but anxiety over the stock market and job security will be competing with low interest rates and potential purchasers who have a strong need to buy (changing health or family conditions, etc).

4] Remote work during coronavirus

If you do decide to encourage or require work from home, make sure you have discussions with those employees about what they can accomplish while not in the office. For many, this may be an opportunity to do or learn something that has been on hold for years because they were “too busy” to get it done. Set a high bar, and let employees know that while they are getting paid, if they can’t contribute in the way they normally do, then they can at least use some of this “extra available time” to enhance their value to the company by becoming better or accomplishing some long neglected task or project.

5] Importance of capital expenditures

If you have significant capital expenditures coming up in the next 45 days or so, evaluate their importance from both a short term perspective (cash required for example) and a longer term perspective (I will need these lots in 15 months). Guard against operating out of fear and anxiety. Good decisions are all about looking at the situation from multiple points of view and objectively evaluating all of the available alternatives.

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Example of a preliminary policy from a midsize home builder

 

Good morning everyone,

By now I’m sure you have all been watching closely as the world is changing rapidly around us and wondering how this may affect our lives and our businesses going forward. While we don’t know what all the impacts may be, we do have enough information at this point that we feel it’s important to take at least some basic initial steps to be prepared. Please take the time to read this entire email so you know what our first steps are for our companies.

Here are the resources we’ve found to be reliable and most up to date. These are the places we will be watching closely to make the most informed decisions we can in the coming days/weeks:

1. Centers for Disease Control and Prevention

2. World Health Organization

3. Johns Hopkins coronavirus map

4. The New York Times

 

Based on where things are right now, here is our initial plan of action for ABC Builders. Again, please stay tuned for more communication from your company leader because the response may very well be different based on locations, etc. These policies are in place starting immediately and will continue until further notice:

  1. Personal responsibility: If you are sick or showing any symptoms, do not come to work; wash your hands often and avoid touching your face, if someone in your family or that you come into contact with tests positive then self-quarantine and notify work (if quarantined, must be cleared by medical professional to return to work).
  2. Social distancing: Stay arms length distance (5 to 6 feet) from others as much as possible, avoid high traffic public places as much as possible.
  3. International travel: We prefer you don’t travel to foreign countries (if you choose to anyway, you will not be able to work in our offices for 14 days after you return, but you will be expected to work from home during that time).
  4. Work travel: No work travel that requires flying or large gatherings/conferences until further notice.
  5. Screening: Screen visitors at the entrance to each office for signs/symptoms.
  6. Cleaning: Each office will have a designated person responsible for wiping down door handles, copiers, conference tables, and other high touch areas at least once at the end of each day with disinfecting wipes (assuming we can keep them in stock), and each person will spray Lysol disinfectant in their offices each night before they go home.
  7. Sick days: We will have flexible sick day policies for the next few months. First use up your sick days, but if you run out, we will allow more as necessary.
  8. Remote work: If our offices are shut down for any period of time, you are expected to work from home the best you are able. If you run jobsites, we ask that you keep up with jobsite inspections as much as possible but avoid contact with trade partners.

We will be monitoring specific plans of action recommended by trusted sources and continue to provide updates to our plans going forward. Each company will go to its company leader to make decisions on a case-by-case basis for items not covered above. This is a very fluid and fast-moving situation, so feel free to ask questions and we will do our best to provide updates as necessary. At the same time, we do have lives to live and businesses to run. Let’s not allow this to be more disruptive than it needs to be, but let’s also respect the risks to ourselves and others and do our part to avoid spreading this infectious disease.

Stay healthy, be confident, and let’s all work through this together!

 

Al Trellis is President of Home Builders Network in Baltimore.

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