Here's why a worker shortage is a blessing and a curse for Steelcase
- A worker shortage has been a blessing and a curse for Steelcase.
- Executives increasingly see its sleek office chairs and tables as assets in the war for talent.
- However, customers have postponed orders as their new offices haven't been completed due to a lack of construction workers.
- US trade disputes with China, Mexico, Germany, and others have also hit customer confidence.
- Watch Steelcase trade live.
A worker shortage has been a blessing and a curse for Steelcase. Executives increasingly see its sleek office chairs and tables as assets in the war for talent, but customers have postponed orders as their new offices haven't been completed due to a lack of construction workers.
In the past, the biggest sales driver for Steelcase was companies hiring a bunch of people or opening a satellite office. As unemployment has fallen and mass recruitment has become rare, more and more businesses are buying office furniture to please their employees."Now, what we are seeing in terms of new momentum...building up over the last several years, more CEOs, more companies saying, 'Hey, we have plenty of space, we have plenty of furniture,'" said CEO Jim Keane on the company's first-quarter earnings call.
"It's not just working anymore. We can't attract the people we want. We can't retain people. We can't inspire people. We can't adopt new processes."
Decisions about office furniture have also moved from the facilities office to the C-suite, Keane said, as executives recognize the importance of appealing workplaces.
Steelcase may have benefited from a shortage of workers pressuring executives to refresh their office furniture, but it has also suffered from it, specifically in the construction industry.
"Some US customers asked us to delay shipments already planned because they're having problems completing construction of new office space on time because of labor shortages in their local markets," Keane said. "We saw many orders placed with requested shipment dates that were further out than what we typically see."
Keane flagged another potential headwind on the call: Customer confidence has been knocked by the Trump administration's trade disputes with China, Mexico, Germany, and others."Every one of these twists and turns is a distraction that pulls our people away from initiatives focused on growth and innovation," Keane said. "CEOs I've spoken with in the last few weeks talked about the difficulty in making long-term capital decisions without some sort of consistent framework for what the playing field will look like."