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Cover Story

Lessons Learned from COVID

It’s been said time and again that, for businesses large and small, the pandemic provided a number of learning opportunities. Companies learned new ways to do things — mostly out of necessity — while also learning that the ‘old’ way may not be the best way. Meanwhile, the pandemic provided opportunities that didn’t exist before — especially when it comes to hiring — and accelerated the pace of needed change. All that means the landscape has been altered for the long term.

Drew DiGiorgio, president and CEO of Wellfleet

Drew DiGiorgio, president and CEO of Wellfleet, in the company’s mostly unoccupied space in Tower Square.

They’re called ‘insurance bibles.’

That’s the name those at HUB Insurance have attached to the large binders — some of them containing 700 pages or more, in the case of large commercial accounts — that tell clients everything, as in everything, about what’s in their policy, what’s covered, what isn’t, and on and on.

As he held one up, Timm Marini, president of HUB International New England LLC, noted that, prior to the COVID-19 pandemic, bibles only came in the printed variety. Now, if a client wants one — and some of them don’t — a digital file is sent, in part because a client can’t pick one up, and HUB can’t drop one off.

And, by and large, things will stay this way, said Marini, noting that COVID has shown those at the company that they don’t need to kill trees and use up expensive toner to provide a client with their insurance bible.

“Now, you can do it all electronically,” he explained. “And you probably could before COVID, but COVID made us do it more.”

This is just one of the many things companies large and small have learned during the pandemic, lessons that will carry over to the time when COVID is referred to in the past tense. Others involve everything from not having to scan documents for tax preparers to not necessarily limiting a candidate search to those living in the 413, to not having people travel to a conference on the other side of the state if they can instead take it in via Zoom.

“It’s a mix, but many certainly want to come back. They’re lonely … they actually want to work in more of a community setting.”

In a word, the pandemic has shown area businesses and nonprofits that they have more options than maybe they thought they had, when it comes to how and where people work and just how things are done.

For this issue and its focus on the modern office, we talked with a number of business owners and managers about what’s been learned over the past 12 months or so and how COVID has actually made companies more efficient and enabled them to reduce costs in some areas. The observations were telling.

“The audit side of our practice generally required teams of people here to go visit on site at other locations,” said Sarah Rose Stack, Marketing & Recruitment manager at the Holyoke-based CPA firm Meyers Brothers Kalicka. “Because of COVID, we learned we could do these remotely, which is something we’ve never done; this was a first-time experience not just for us, but for people in our industry. We’ve learned that it’s fine, it is efficient, and with some businesses, we’ll keep doing it this way moving forward.”

Timm Marini holds up an ‘insurance bible’

Timm Marini holds up an ‘insurance bible’ — the printed variety. Those at HUB have had to send digital documents during the pandemic, and that trend will continue into the future.

For Springfield-based Wellfleet, now with offices in Tower Square, the pandemic has provided ample evidence that employees in many positions can work effectively and remotely, and this enables the company to expand its horizons when it comes to hiring.

“You can expand your pool when it comes to workforce; we can hire someone not from the Springfield area and have them be successful with the tools that we’ve developed,” said Drew DiGiorgio, the company’s CEO, adding that the company has already hired some people from other parts of the country. Meanwhile, it is working on plans to have other employees work a hybrid schedule, with some days in the office and others remotely.

Chuck Leach, president and CEO of Lee Bank, said that, prior to COVID, HR Director Susie Brown and IT Director Drew Weibel were already hard on work on plans to position the bank to be more flexible with its workforce in terms of where and how it worked. The pandemic served to accelerate that process.

“Even though we’re Lee Bank, a lot of our employees come in from other markets,” he noted, adding that these lengthy commutes prompted talk and then creation of plans for remote work and hybrid schedules. “We were already thinking about it, and COVID forced us to be more deliberate in our approach and our policies and procedures.”

But even with these options in place and far more flexibility with work schedules than ever before, the bank is tilting strongly toward having people work on site — with some exceptions — and it’s also seeing most of its employees want to come back, which is another thing companies are learning as they work their way through COVID.

“It’s a mix, but many certainly want to come back,” Weibel said. “They’re lonely … they actually want to work in more of a community setting. They want to come back, but some find it easier to work at home until the school situation is worked out and their children are back in the classroom.”

Stack agreed. “When the shutdown first happened, everyone was excited to work from home, so a lot of people exercised that option, and some people have found they’re more efficient from home, cutting out that commute,” she said. “But while some still work from home, the majority of people, like 97% of the people at MBK, choose to come into the office every day because they don’t want to work from home.”

Work in Progress

DiGiorgio said it’s somewhat frustrating to walk around his company’s offices in Tower Square.

More than 200 employees moved into the well-appointed space covering three full floors in the late summer of 2019, only to see pretty much everyone pack up and go home to work in mid-March.

“We love it — we wish we could be in it more,” he said with a laugh. “It’s great space — open-floor design, all the things you probably don’t want with COVID. It will be great to get back to it.”

Indeed, that’s a lot of fairly expensive (for this market) downtown Springfield real estate that is not being used. But DiGiorgio doesn’t dwell on matters that are out of his control.

Instead, he’s more focused on what the future will look like — and applying all the lessons learned during the pandemic.

As for that real estate … he said this is a growing company that took three floors with the intention of perhaps soon absorbing a fourth. Need for that additional space is less likely now, he acknowledged, but the company will still need the space it’s now leasing because he fully expects most of his employees to be back in that space.

But not all will have to come back, he went on, and some, as he noted, will never have to sit at a desk there.

“We have, over the past year, hired people in Florida, Tennessee, Atlanta, Minneapolis, Upstate New York … we have a pretty remote workforce,” he said, adding that some of these hires took place before COVID because the tools were in place, but the pandemic has highlighted how effective people can be working remotely, and thus, as he said, broadened and deepened the talent pool.

“We have a billing person who’s in Tennessee. I feel more comfortable now that she can hire people in Tennessee or wherever she needs to; they may not need to be in Springfield, which is what our initial thought was. COVID has opened up our thinking to where we hire people.”

Marini agreed. “We have employees in Wisconsin who work for New England,” he explained. “We have people who decided to move to Florida and still work for New England. We had a little of that before COVID, but what we realized was that, with our ability to get our automation up and running, our digital offerings, that really expanded our talent pool; there have been some relocations during COVID and some new hires during COVID that are not Western Mass.-based. And we have some people in Western Mass. who work for some of our Eastern Mass. locations and even one in New York.”

COVID has reinforced this premise, as it has many others, while accelerating some trends and pretty much forcing companies to do some things they never considered before.

Like those virtual audits at Meyers Brothers Kalicka.

Stack said the firm’s teams have undertaken a number of them, while, in other cases, it has adopted a hybrid approach for some audits, going to the client site for some of the work while handing the rest remotely. Thanks in large part to COVID, there are now several options for handling such work, she said, adding that other lessons have been learned and other new ways of doing things revealed.

“On the tax side of our practice, we used to have clients in the building all day, every day, from February 1 through tax day, and now, maybe three people a day drop off their boxes of papers; the vast majority of people just e-mail us their material,” she explained. “They’re happy with it, it’s efficient, and it saves us a step. Instead of having to take tons and tons of paperwork and scan it into our digital system, it’s already coming to us in that format.

“We used to have to hire a scanner for tax season — a whole person whose job was to take all this paper that people would drop off and scan it,” she went on. “We didn’t have to hire a scanner this season, and that was definitely a positive change.”

Will Dávila, executive director and CEO of the Children’s Study Home in Springfield, said the pandemic has led to positive change in many forms at his agency and most all businesses and nonprofits. He echoed others when he said that COVID has served to heighten the awareness of how technology can be used to improve efficiency and save time, such as when traveling to conferences or meetings in other cities.

Will Dávila, executive director of the Children’s Study Home

Will Dávila, executive director of the Children’s Study Home, says his agency has learned a number of lessons during the pandemic, many of them involving better use of technology.

“We now have more of a comfort level with working remotely and working via Zoom,” he said, adding that this technology existed long before COVID, but few businesses took full advantage of it. “The lesson for us, and I’m not sure we have it completely figured out yet — it will likely take us some time — is that we can do more with technology than we thought we could before. I’ve been in places where we would talk about technology and teleconferencing and telehealth, and people would balk at it. And now, we’ve been forced to take another look, and we’ve embraced it.”

Looking ahead, he said that, while most people look forward to the day when they can gather and attend conferences and meetings in person, they know there are options — there’s that word again — and they won’t be hesitant to take full advantage of them if the circumstances permit.

Caution Signs

As he walked with BusinessWest through HUB’s headquarters facility on Shaker Road in East Longmeadow, Marini pointed to a number of unoccupied workstations, some of them marked off with the yellow ‘caution’ tape usually associated with crime scenes and construction sites. Such tape can be seen throughout the suite of offices, he said, noting that the space — which was occupied by just over 50 employees prior to the pandemic — has hosted around seven a day on average, with a high of 14, by his count.

Sectioning off such areas became part of life during COVID, he noted, adding that there are myriad ways the pandemic changed the landscape for the company. Overall, there’s been a huge shift; a place once teeming with employees and visiting customers now sees very few of either.

And that has brought challenges — and some opportunities, mostly in the form of learning how to do things remotely and without reams of paper. As he talked about these opportunities, Marini gave a nod — sort of, anyway — to an organization his business works closely with, obviously: the Registry of Motor Vehicles.

“Even the Registry of Motor Vehicles here in the Commonwealth of Massachusetts has become more digitized, more automated, and more flexible, and that’s something I never thought I’d see after 33 or 34 years of doing this,” he told BusinessWest, adding that, in some ways, his company has been inspired by the RMV, as it automates and digitizes many processes that once involved paper and in-person sessions.

As for the challenges, they came in waves, Marini explained, from equipping everyone to work at home, which was expensive and difficult logistically, to helping employees cope with everything from feelings of isolation to simply filling their days with work, even though they were home.

CHuck Leach

Chuck Leach

“Even though we’re Lee Bank, a lot of our employees come in from other markets. We were already thinking about it, and COVID forced us to be more deliberate in our approach and our policies and procedures.”

“We were too accessible when we were home, so there were no breaks for our people,” he explained. “We started having big conversations and hiring professionals to come in to coach us to make sure we took breaks and that there was separation between home and work.”

What will things look like several months from now, especially if the pandemic continues to ease? Marini isn’t exactly sure, but he acknowledged that he spends a lot of time thinking about it and working with corporate to prepare for that day.

He does know that more business will be handled virtually in the future, and there will be little, if any, need for those printed insurance bibles.

As for employees, like others we spoke with, he expected that they will come back, because the company wants them back, but also because they want to be back in that office setting.

Such sentiments were echoed by many of those we spoke with. They noted that it seem logical that, after getting a taste of working at home, many employees would prefer that option, but what employers are generally seeing is the opposite reaction.

“People are sick of remote everything,” said Stack, noting that Meyers Brothers Kalicka has a younger team within the audit department that could do its work from home, but instead it has reserved the firm’s huge boardroom for the past six weeks so the members can work together, but safely and well spread out.

“They have music playing on Spotify every time you walk in there,” she said. “They just want to be in the same space — they think they’re more efficient that way, and they can ask questions of each other faster and stay on track better because they’re all together. It’s not something we told them they had to do; they’ve chosen to do it.”

Dávila agreed, although he noted that he has some employees who are quite happy working at home, and are “working on it” when it comes to returning to the office. By that, he meant he’s offering some flexibility on this matter and not rushing anyone back who doesn’t want to rush back.

“I think it’s partly generational — people who have been in the field for 15 or 20 years or more and are used to those in-person interactions, they’re used to having that time by the water cooler when they’re getting a cup of coffee. I consider those valuable interactions that help with morale,” he told BusinessWest. “But we also have younger staff who are very comfortable with technology and embrace the idea of working remotely.”

But, ultimately, they will come back, probably by the end of the calendar year. “I don’t want to say absolutely not,” he said when asked about hybrid arrangements that offer a mix of remote and in-office work. “But my preference is that we get people back to a schedule where they can see each other and interact.”

Lee Bank’s Susie Brown agreed. “When it comes to Lee Bank, I think everyone enjoys being together,” she said. “We don’t have a lot of people who are unwilling to come back; those that are unwilling are those that have other challenges at home with their children.”

Bottom Line

COVID is far from over, and there are certainly more lessons to be learned as companies large and small continue to cope with an unprecedented challenge.

But it’s already evident that this battle has prompted changes that will live on long after the pandemic is in the rear-view mirror. As they were forced to do things differently, companies learned that, in many cases, these different ways are better than the old ways.

Like the insurance bible. Clients, at least some of them, will still need one. But they won’t need to thumb through 700 pages of printed material to find an answer.

COVID has changed all that — and it keeps on changing the landscape.

George O’Brien can be reached at [email protected]

Opinion

Editorial

In some ways, it seems like it just yesterday. In other ways, it seems like years ago.

That’s what the last 12 months of COVID-19 — 12 months unlike anything any of us have experienced before — have been like. They’ve gone by fast, but it’s been a long, as in long, year.

As with the Kennedy assassination (for those of us old enough) and with the morning of 9/11 for those who are younger, everyone remembers where they were and what was happening when the governor put his stay-at-home order in effect. For many, it meant packing up (if they hadn’t already packed up) and leaving the office for what we all thought might be a few weeks, or a few months at most.

We soon learned that those projections were way off base and that we would be living with the pandemic and all the hardships that came with it for a long time.

In the months that followed, we would learn much more, as our roundtable discussion with six area business leaders (see story on page 6) reveals. We learned that we didn’t have to be in the office, necessarily, to get our jobs done. We learned new ways of doing things. We learned to embrace technology — well, because we didn’t have a choice. And we all wondered why we didn’t embrace it earlier.

We learned some other things, as well. We learned that life is hard, and not just during a pandemic. But COVID, by exacerbating things, made it clear that work/life balance isn’t just a buzz phrase; it is a serious, serious challenge and something that employers now understand better than they ever did before.

As our panelists indicated, we all learned to listen a little more than we used to, and we learned how to more empathic to the needs and challenges of employees. Many of us learned how to be better managers because, in short, that’s what had to happen. We learned that making sales quotas, hitting deadlines, and reaching quarterly goals are not the only things that keep people up at night.

We also learned how to pivot — again, because we had to — and look for new ways to carry out our missions, make payroll each week, keep people employed, and keep the doors open.

In short, we’ve learned a lot — about pandemics, business, life, and ourselves. This is not a silver lining to this horrible crisis — there are none of those. It’s simply reality.

What’s also reality is that the hard decisions and the myriad challenges are not over — not by a long shot. Now, we have to determine how we’re going to execute all these things we’ve learned when life and work go back to normal, or something approaching it.

We have to decide how our businesses will function when it’s safe for everyone to come back to the office or the classroom or the restaurant. We’ve learned that people can work from home, but is that the best place to work — for the company and the employee? And there are other questions, including those related to how we can continue to listen, understand, and be empathic when we’re no longer in crisis mode.

These are just some of the things we need to think about as we mark a dubious milestone — a year of coping with a global pandemic.

It’s been a year to learn, reflect, adapt, and change. And we’re far from being done with any of those things.

Banking and Financial Services Special Coverage

Pandemic Lessons

Rich Kump

Rich Kump says the pandemic has forced people who had been reluctant to bank remotely to give it a shot.

It’s the wave of the future, Rich Kump said — and the COVID-19 pandemic simply cast that wave in sharper relief.

“We’ve had a goal of moving routine transactions out of the branch,” the president of UMassFive College Federal Credit Union told BusinessWest. “We’ve been educating our members for three years, trying to move them out of the branch, and there’s still a percentage of America who just likes to everything in person. You need to take a thoughtful approach; you can’t force people into it … although COVID did that, to some extent.”

A widely held vision of the bank (or credit union) branch of the future — one shared, to some degree, by other local banking leaders we spoke with — does indeed promote robust online and mobile tools for routine business like deposits and withdrawals, leaving less traffic in branches, but a greater percentage of that traffic given over to more complex or consultative matters.

“We’ve had a goal of moving routine transactions out of the branch.”

And many people who have long resisted online banking are singing a different tune, said Paul Scully, president of Country Bank.

“Customers, just because of the nature of the pandemic, with people staying at home, started exploring technology,” he noted. “An amazing number of people are using technology who, for a number of years, fought it.”

In most cases, it’s just a matter of breaking old habits, Scully said — “and old habits are comfortable habits. But I think people are becoming better acclimated to technology and getting over their fears. There are still people who think, ‘I have to go into the bank to make that transaction because what if the money doesn’t get there?’ But as an industry and as a bank, we’ve been able to alleviate the concerns some people have.”

Florence Bank President Kevin Day agreed.

“Banking in general is going to change. The stuff you need to do is the same, but how you’re going to do it will change,” he said, noting that lobby traffic has been declining for years, and what was already a high adoption rate of mobile tools only accelerated over the past three months as banks closed lobbies to most routine business. “People are starting to realize it’s probably more secure, so they’re getting more comfortable. It’s also way more convenient.”

And gaining momentum in these shuttered times.

“Customers realized they really can do all their banking online,” Scully said. “We’re no different than Macy’s or Amazon. You realize you can sit down with your laptop or phone and purchase something from a retail outlet, and you can also do your banking that way. People are becoming more comfortable with it — so we need to keep upgrading and enhancing it.”

That’s not all they’re doing. Banks and credit unions, despite a much higher reliance on drive-up lanes and mobile platforms lately, never really closed during the pandemic, and while they continued to serve customers — in some cases, helping them navigate sudden financial hardships — they were also learning lessons and conducting internal conversations about where the industry is heading and what the bank of the future should look like.

Some were discussions that had begun years ago but, again, were suddenly cast in sharp relief as the wave known as COVID-19 came crashing down.

Staying Connected

People have been starved for human contact, Kump said. He knows that from UMassFive’s call center, as calls over the past three months are 25% longer, on average, than last year.

“A lot of it is, people just want to talk,” he noted. “Yes, they call for a reason, but then they want to talk. It’s a bit of a community.”

Bolstering the call center was one of the success stories of late March, which he recalls as a tough time.

“I don’t think anyone was ultimately prepared for this; we were scambling,” he said, explaining that many retail personnel in the branches began covering the phones, often from home. “Within two weeks, 70% of our staff was working from home. That’s when the chaos evolved into routine.”

Like the other institutions we spoke with, UMassFive didn’t close completely, staying open by appointment for services that couldn’t be done remotely, from notary signings to certain loan closings to instant-issue debit cards. The week Kump spoke with BusinessWest, the credit union was operating a soft opening of sorts before announcing a shift to walk-in business.

“Financial wellness isn’t just for people with means; it’s everybody, from somebody with an entry-level job to someone doing college planning or estate planning.”

Day recalls a similar experience.

“In that first week, everything was shutting down, and people were saying, ‘you’re a bank. You can’t shut down,’” he said. But Florence transitioned to drive-up service where possible while witnessing an expansion of remote banking — as well as phone-call volume that was up 100% early on.

“We helped a lot of people transition to mobile and computer options. People have used the drive-ups. We opened the lobbies for people who needed to do something in person. We went out to cars in some cases,” he recalled. “You couldn’t come and go as you wanted, but we never really closed. If you called and the only way to do something was in person, we did it in person.”

Kevin Day

Kevin Day says shifting most employees to remote work was one of the smoother transitions necessitated by COVID-19.

Still, the sudden, in many ways forced expansion of remote banking is just an extension of where the industry was already headed, Day explained. “We had already seen trends toward online, mobile, people doing much more on their computers and phones. The pandemic just really accelerated that.”

Scully said the transition to employees working remotely was one of the easier shifts.

“It wasn’t that difficult for us. We had all the technology in place that allowed us to immediately have all our non-branch staff working remotely, literally overnight. So that fell into place nicely for us; we didn’t miss a beat. Business was never impacted.”

For example, he said Country processed about 450 Paycheck Protection Program (PPP) loans remotely, while Zoom calls and Webex meetings became the order of the day. It has worked so well, in fact, that non-branch employees will continue to work from home until Aug. 31, even as branches begin opening up this week, which is a boon for parents still uneasy about — or unable to access — camps and day-care services.

“We closed a day or two before other banks, just recognizing what was happening, and moved people to drive-up or leveraging technology,” he said, noting that lines were sometimes long, but customers were able to access the services they needed, in some cases using interactive teller machines (ITMs) at two locations.

“We’ve walked a lot of people through the technology, and the customer care center reached out directly to help them. We had curbside service at some locations, and we also used that as an opportunity to talk about technology.”

Branch of the Future

All this enhanced technology goes hand in hand with what many banking leaders say is an evolving role for branches.

Branches are certainly needed, said Jeff Sullivan, president of New Valley Bank, which is opening a new branch on the ground floor of Monarch Place in downtown Springfield this summer. Like every other area bank branch, it will stress pandemic safety, with a mask requirement, six-foot distancing, and glass partitions between customers and employees.

But it will also reflect a move toward a role for branches that emphasizes financial wellness and consultative services more than routine business.

“That’s going to be the bigger component of what a community bank does — trying to help people navigate a lot of things,” he explained, before adding that there will be plenty to navigate in the coming year, when more customers than usual will be struggling to achieve stability. “Financial wellness isn’t just for people with means; it’s everybody, from somebody with an entry-level job to someone doing college planning or estate planning.”

The bank of the future will put greater emphasis on this consultative role, through personal interaction that can’t occur online.

Paul Scully

Paul Scully

“Customers, just because of the nature of the pandemic, with people staying at home, started exploring technology. An amazing number of people are using technology who, for a number of years, fought it.”

“Obviously, if it was just about technology, the big-city, money-center banks could meet the needs of every single person,” Sullivan said. “If you don’t have the technology, you’re going to fall behind, but the extra, community-focused efforts are what’s really going to make an impact.”

Kump said UMassFive has eliminated tellers — or, more accurately, it has eliminated branch employees who handle only that role. Instead, employees are trained to be “universal agents,” able to tackle multiple roles, from traditional teller business to loans and other matters.

To achieve that, the credit union has tripled its training budget over the past few years, seeking to identify not only financial skills, but empathetic personalities with a real desire to help people.

“The face of banking is changing permanently. Branches in the future won’t be as critical, with fewer transactions coming in. But they will always be needed for key parts of financial life,” he explained, citing anything from home and auto loans to opening memberships to simply seeking financial advice.

“We won’t need the huge teller line anymore. We won’t need as many branches, and the services we’re providing in the branches are changing, he added, noting that customers are also discovering they can conduct routine business face to face — sort of — through ITMs. “Someone could be at the Northampton drive-thru, talking to someone working from home in Belchertown.”

That raises the question of how many workers need to be on the premises, both while COVID-19 is still a threat and afterward, considering how effectively operations have continued during the pandemic.

Jeff Sullivan

Jeff Sullivan

“Obviously, if it was just about technology, the big-city, money-center banks could meet the needs of every single person. If you don’t have the technology, you’re going to fall behind, but the extra, community-focused efforts are what’s really going to make an impact.”

“From a back-office standpoint, about half are working remotely,” Day said. “Can they continue to do that long-term? Yes, but there’s still the human element, and people can feel isolated. Feeling part of a team is important to some people, while some people are loners. But technology is certainly giving us some options.”

And the bank, which recently broke ground on its third Hampden County branch, this one in Chicopee, has certainly been discussing those options.

“More transactions are going online, but when you want to talk to a person to problem solve, especially with more complex transactions, that can certainly be done over the phone — and has been during the pandemic — but the way we’ve designed our branch of the future, there’s more consulting. If you want to come in and consult, we’ll talk to you — a lot. So frontline people will still need to be there to handle questions and solve problems.”

Getting Through the Pain

In fact, banks and credit unions never stopped solving problems over the past few months. Scully said Country, like other banks, was able to accommodate deferrals of loan payments for individuals who has been furloughed or were generally dealing with greater financial stress.

“I felt like this was a watershed moment,” Day added, noting that more than 200 mortgage borrowers and 200 commercial borrowers took advantage of three-, six, or 12-month deferrals, the latter being the most popular option. “Having been through downturns in my career, I knew that we needed to give people some time. People are resilient, businesses are resilient, but they needed some time. So we worked with residential and business customers on deferred payments.”

Kump said UMassFive issued forebearance on nearly 1,000 loans for people who were “furloughed or just worred,” as well as launching a small-loan program for those who just needed a little cash. “If you were furloughed, that didn’t change the decision to make a loan for you.”

That was in addition to PPP loans, which the credit union approved for members and non-members in the community alike, 96% of those loans issued to employers of five workers or fewer. It also looked for other ways to support community needs, such as donations to food banks and organizations like Community Involved in Sustaining Agriculture, as well as donating meals to first responders.

Although those needs still exist, banks and credit unions are beginning to get back to normal operations, expanding branch operations under enhanced safety protocols — “it’s a great time to be in the plexiglass business,” Scully said — while considering the lessons learned during the months when most business was conducted remotely.

“Was there frustration at first? Absolutely,” he added. “At first, people were like, ‘what do you mean, a bank is closed?’ But as every industry started to close and people started working remotely, people began to understand.”

After all, a bank that saw a fire ravage its headquarters in 2008 and a tornado rumble through its home region in 2011 has no problem posting social-distancing reminders and directional arrows and getting back to branch business. “This is bigger than a tornado,” Scully said. “The lesson we’ve learned is to always be prepared and remain nimble.”

Even as it moved from a soft-opening week to broader branch service — where walk-in traffic is allowed but appointments are still advised to reduce the wait — Kump marveled at how the credit union’s members have adjusted to remote business. Especially new members, 90% of whom have been joining online, compared to 40% to 50% in a typical year.

“There’s a percentage of customers who will still be reluctant to walk into a business,” he added. “We’re seeing that with restaurants opening and people still not coming.”

It helps, of course, that many have discovered the power of digital banking.

“For a lot of folks, it’s generational; they’ve been intimidated by technology, of depositing a check with a picture on their phone,” Kump continued. “Now they’ve been forced to do it, and they’re asking, ‘why was I taking time out of my day to run over to the credit union to get cash or transfer money? I don’t have to do that.’”

Day also expects people to keep using those tools, but for those ready to return to the branch, even for matters as basic as depositing a check, they’ll do so protected by masks, shields, and any number of other precautions. “The pandemic isn’t over, and people are still going to get sick. We want to keep people safe.”

Bottom Line

Usually, when BusinessWest talks to local banks and credit unions, it’s about their own business outlook for the year ahead, but this is not a typical year, and talk of asset growth and loan portfolios has been pushed aside to some degree by the need to simply stay afloat — and keep customers afloat, as well.

“The outlook is generally positive, but it will not be without pain,” Day said, speaking for both Florence Bank and its customers. “We know it will get better. It’s just a matter of when.”

Joseph Bednar can be reached at [email protected]

Coronavirus

Supply Chain of Events

Supply chain.

That’s a two-word phrase that had rarely made its way into the lexicon of most area residents before the COVID-19 pandemic; it was generally assumed that the shelves in the stores would be crammed with product — because they always had been.

But in a year when there have been shortages of cleaning supplies, surgical masks, beef, fish, hair coloring, paper towels, ice cream, rice, frozen pizza, and, yes, toilet paper — a product that has become a metaphor for a crisis — people can no longer take supply chain, and full shelves, for granted.

This has been a learning experience — on a number of levels.

So too for those who work to keep the shelves stocked. For them, it’s a time of relationship building, finding new ways of doing things, and providing ongoing proof that, while the supply chain has been bent — severely and repeatedly — it hasn’t, in their minds, been broken.

“The supply chain has definitely been tested through all this, and there have been shortages of some things, as everyone knows,” said Michael D’Amour, chief operating officer at Springfield-based Big-Y, the fourth-generation, family-owned grocery chain. “But, overall, I think this crisis has shown just how resilient the supply chain is.”

 

Michael D’Amour

Michael D’Amour

“The supply chain has definitely been tested through all this, and there have been shortages of some things, as everyone knows. But, overall, I think this crisis has shown just how resilient the supply chain is.”

 

Doug Baker, vice president of Industry Relations for the Food Marketing Institute, (FMI) agreed.

“Almost weekly we’re getting back numbers, and we’re still seeing double-digit growth across many categories — and you can’t have double-digit growth if inventory is not available,” he said, referring to specific product lines ranging from cleaning supplies to frozen foods. “It’s just a matter of matching inventory with consumer demand, and that’s been the challenge.

“And that’s why we’ve seen shortages — because that inventory output hasn’t been able to rise to the level of consumer demand,” he went on, adding that recent numbers show a slowing of demand that is giving many producers at least a chance to catch up.

In March, on average, the industry was seeing 35% to 40% increases in overall sales volume, Baker said, while in late May, the number was closer to 20% to 25%.

“We’re seeing sales slow, which is helpful because it allows the supply chain to catch up to an extent,” he explained. “But we also have to understand that those are still pretty significant increases, and we’re not going to go back to pre-COVID days, because the public still has yet to engage in a livelihood that they engaged in before the pandemic, and that’s based on where you see them spending their food dollar.”

D’Amour agreed, noting that, as May turned to June, a good number of people were still in something approaching lockdown mode. They were eating most meals at home because restaurants were only open for takeout. They were also still working at home and, therefore, eating lunch at home. Meanwhile, children are home from school, and college students are home as well. This all adds up to people buying more at the supermarket.

As phase 2 of Gov. Charlie Baker’s reopening plan takes effect on June 8, restaurants will be opening for curbside dining, and preschools and day camps will be reopening. And as more and more people go back to their offices — the ones they left in March for space on their dining room table — the ratio of food dollars spent out of the home will start to rise higher.

How long it will take to reach pre-COVID levels — when 54 cents of each dollar was spent outside the home — remains to be seen, said Baker. However, what is certain is that the situation is fluid at best and it could change in a hurry if cases start to surge, a second wave arrives, and people start spending more time working — and eating — at home.

Doug Baker

Doug Baker

“We’re seeing sales slow, which is helpful because it allows the supply chain to catch up to an extent. But we also have to understand that those are still pretty significant increases, and we’re not going to go back to pre-COVID days, because the public still has yet to engage in a livelihood that they engaged in before the pandemic, and that’s based on where you see them spending their food dollar.”

Meanwhile, this new normal has essentially forced chains like Big Y to forge new alliances with suppliers, said D’Amour, noting that as restaurants, colleges, and schools of all kinds closed earlier this year, this created an enormous surplus of inventory, but put the demand on grocery stores, while also creating an opportunity to redeploy goods and resources to grocery retail to meet demand and reduce waste.

One such alliance, one that typifies how suppliers and grocers are working together to forge solutions, involves Little Leaf Farms in Shirley, a local partner and grower of lettuce that saw demand decline dramatically as schools and restaurants closed a few months back and was looking for new opportunities to sell product and reduce the kind of waste that was seen almost nightly on major news broadcasts.

“They’re one example of so many local partners who have sat down with us and worked to figure out how to maximize business between us and keep their stuff growing and moving through the pipeline when the restaurants were shut down,” D’Amour explained. “We worked with them on supply and hotter deals and pricing to keep it moving through the grocery channels.”

For this issue, BusinessWest talked with several players involved with supply chain about the lessons learned to date and how they will help the broad food industry through the uncertain months to come.

Food for Thought

As noted earlier, the laws of supply and demand generally take care of shortages on store shelves — in normal times.

But these are not normal times, said those we spoke with. Still, those laws have applied to items like surgical masks. Hard to find only six weeks ago, they are now seemingly everywhere, and in large quantities, as a number of companies started making them — and more of them.

“Everyone’s getting into the mask business now,” Baker explained, adding quickly that it’s much easier to convert machines to make those products than it is to supply more canisters of Lysol or make more rolls of toilet paper, as simple as that might sound.

“Paper manufacturers have been putting in additional lines,” he said. “But the challenge the industry is facing now is that there two types of fiber used to make toilet paper — there’s recycled fiber and there’s virgin fiber, and with recycled fiber, the supply is low, and not every machine can be converted to use virgin fiber, so you’re going to have less output if you can’t convert.”

And sometimes, because of the pandemic, producers simply cannot meet demand.

That was the case for several weeks — although matters have improved — when it came to supplies of meat and chicken, said Baker, noting that, early on, plants were shut down temporarily. And when they reopened, to keep workers safe, production lines were altered in ways that actually slowed production.

Such specific cases help explain shortages of particular items, said those we spoke with, adding that, overall, many of the empty shelves result from unprecedented demand and panic buying that is starting to wane in many instances. But as the year continues, more lessons will certainly be learned, said D’Amour, adding that there have been plenty of learning experiences already.

Elaborating, he said that, from the beginning, those at Big Y have been watching what’s happening globally, anticipating, and “trying to get on top of things” — a phrase he would use many times — when it comes to everything from employee and customer safety to creating efficient traffic flow in the stores, to keeping items on the shelves.

This has obviously led to new policies and procedures — from the directional arrows on the floors to special hours created for seniors to the plexiglass screens at the check-out counters.

“For us, the biggest component is the people part, and that continues to be stressed by our suppliers, wholesalers, and others,” he said, adding that, while much of that panic buying and hoarding is being talked about in the past tense, the need for diligence remains, and chains like Big Y can’t let their guards down.

Getting back to the supply chain, D’Amour said it has been a struggle in some well-documented areas, but suppliers are responding by trying to increase supply and also reduce the number of overall SKUs to help put some product on the shelves.

“Where people are used to walking down the paper aisle and seeing 150 different choices of bath tissue and paper towels, now they’re seeing far fewer,” he said. “But products are coming back; we’re working with all our partners to get them back in.”

Perhaps the biggest key to providing quality service to customers during the crisis has been efforts to forge new partnerships and stronger relationships with those within the food-service industry, said D’Amour. He mentioned ongoing work with Springfield-based Performance Food Group as one example.

“They’ve done a phenomenal job working with us, working together, to figure out what food they have stuck in the pipeline that we can use,” he explained, adding that, over the past several months, PFG, as it’s called, has even helped with trucking and labor for either Big Y’s warehouse or at wholesale partners. “Most of these partnerships we’ve had have been mutually beneficial, but there are strategies and tactics that we’ve never done before; everyone’s been very open and ready to fight the battle, work together, and think of new ways to partner for the benefit of the consumers.”

Which brings him to Little Leaf Farms. Paul Sellew, owner and founder of that facility, which began operations just four years ago, said it is now part of a larger local-food movement that not only puts fresher produce on the shelves, but in many ways helps ease flow of product through the supply chain.

“People don’t realize that 95% of the leafy greens that you see in the grocery store are grown in California and Arizona,” he explained. “And when you have this global pandemic, an unprecedented situation, that puts stress on the supply chain, so imagine managing a supply chain from Selinas, California to Springfield, as opposed to my supply chain, from Devens, Mass. to Springfield.”

Little Leaf has historically seen much of its business fall into the broad category of food service — restaurants, schools, and other institutions. But with the pandemic and the sharp decline of demand on that side, the company, like many other suppliers, has shifted into retail grocery, which has been a win/win/win, for those growers, the grocers, and, ultimately, consumers.

“When you get these unprecedented events, you really want to make this region stronger and more resilient, and food is such a strong, fundamental component of that,” he went on. “And that’s why we’re so grateful for partnerships like the one we have with Big Y, which has supported us from day one.”

Overall, there is a ‘new normal’ within the grocery/food-service industry, a phrase now being heard in virtually every sector of the economy. It involves a landscape that could change quickly and profoundly depending on the pandemic and its impact.

No one really knows when there will be real light at the end of the tunnel, said D’Amour, adding that Big Y, like all those it is partnering and working with, needs to remain nimble and flexible, and continue to work in partnership with others to not only keep the shelves stocked, but also keep people safe.

Bottom Line

Summing up the past several months, those we spoke with said it’s been a challenging and in many ways difficult time, where, again, many important lessons have been learned that will serve consumers, suppliers, and retailers well in the uncertain months still to come.

“The United States is a country of abundance, and the supply chain is a beneficiary of this abundance,” Baker said. “Yes, the supply chain is strained, and some shortages will be experienced, but it’s not broken — there are not critical disruptions in the supply chain.”

The hope, and the expectation, said D’Amour, is that things will stay that way.

George O’Brien can be reached at [email protected]

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