Kelly Vlahakis-Hanks, President and CEO of ECOS, joined The Final Round to discuss the minimum wages increases going into effect on July first in Illinois, Nevada, Oregon and Washington, D.C. and what it means for the economic recovery.
- A total of 24 states are raising or have raised their minimum wages this year. Three states plus Washington DC are set to do so on July 1. Joining now for more on this, we have Kelly Vlahakis-Hanks, President and CEO of ECOS, a maker of laundry detergent and household cleaners. They're also a member of the Business For a Fair Minimum Wage. And Kelly, it's great to have you on the show this afternoon. Let's start with the fact that we are seeing so many states raise their minimum wage this year. A know your in support of this. Why do you think it's so critical for states to raise the minimum wage and do so right now?
KELLY VLANHAKIS-HANKS: You know, thank you so much for having me on the show today to talk about this. I think it's extremely important to have fair wages across our country. And I think it's not just the right thing to do for the worker. I think it's the right thing for business and, ultimately, the right thing for our economy. 70% of our economy is based on consumer spending. So we need to make sure that consumers have buying power. And as a business, I can tell you we've put $17 an hour as our minimum wage back in 2014. And that was up from $15 an hour that we had in place in 2012. And with that, we saw a 50% reduction in voluntary turnover, and pretty low. In our business, it was going from 3% to 1.5%.
But there's so many costs that hit the bottom lines of businesses that experience high turnover. And people that are paying low wages have a lot of high turnover. And those costs are recruiting, and training, and hiring, the loss of corporate memory, lower productivity. So we saw wonderful increases both to our bottom line, to morale, to commitment, productivity. So I think it's a real win-win for business, for our economy, and then, obviously, for the worker themselves. You know, as I sit here in 2020, I think that the poverty line for a family of four is set at $26,000. And at $10 an hour, you're just hitting $20,000. So we're just working our way up to what's truly a fair wage in our country.
RICK NEWMAN: Hey, Kelly, Rick Newman here. So I want to ask you the nuts and bolts of running a business. You know, a lot of times there is competitive pressure to get your prices down, which means get your costs down. So how do you keep wages higher than the competition if there's downward pressure on prices?
KELLY VLANHAKIS-HANKS: Thanks, Rick, for that question. You know, if you look at our ECOS products in the marketplace, we're oftentimes opening price points. And that's not just, you know, in the green space, that's even against our conventional competitors. And we've done that through a series of things. First of all, there's a bit of wage compaction in our business. So the executives on the top are paid fair salaries, but not inflated ones. At the same time, we manufacture everything ourselves, so there's no middle man.
We're manufacturing here in the United States. I've got four facilities across the country. I'm in California but I've also got the facilities in Illinois, in the state of Washington, and in New Jersey. So we're always shipping to our local marketplace. Our suppliers are also close to our facilities, so we reduce shipping costs. So we look at really sustainable ways to run our business so that we can keep our prices low and still take care of all of our team members.
RICK NEWMAN: So I should ask when you plan on running for office. But I'll ask instead, what about health care? So you you're all for paying what you might call a living wage. Or do you also find it in the budget to provide health care for your workers, including part timers and contractors?
KELLY VLANHAKIS-HANKS: Absolutely. So we have PPO insurance for all. We believe in really having a robust health care plan for our employees. Once again, I mean, to have employees that are productive, that are committed, that really care about your business, they need to be healthy. And they need to know that their loved ones are also taken care of. And so we've really put a wonderful plan in place here that I'm really proud of. And if you came and visited our facilities, you would see that we have team members here 20, 30, 40 years. I mean, we've been around 53 years. And that kind of commitment is only there when you truly take care of them. And health care is one of the basic needs that must be met.
- Kelly, I want to ask you a little bit more about your business and what you've seen over the past couple of months because you meet the laundry detergent, cleaning supplies. Obviously, these are items that many Americans have been stocking up on. What has demand been like for your products? How were you able to keep up with that demand? And, I guess, where did you make any changes to your business because of what you saw over the last couple of months?
KELLY VLANHAKIS-HANKS: Absolutely. It's really been an unprecedented time in our business as it has been everywhere in the world. I'll never forget March 16, seeing the orders come in. And at that point, they were coming in at almost eight times their normal levels. And so a bunch of things we did as a business, first of all, we scaled up our production. We added a second shift in each of our manufacturing facilities so that we could really rise to meet the global need for cleaning products.
I think you can argue that cleaning products certainly are the greatest weapon in the war against COVID, and so making sure that people had access to these cleaning products by partnering with our retailers to really get them there. And obviously, we're an essential business. So we stayed open throughout the entire pandemic, instituting a lot of safety features in our business as well, six foot spacing, masks for everyone, all of those types of things, temperature checks to ensure that our team members stayed healthy as well. And we really make sure to work seven days a week to ensure that our retailers stayed in stock.
- And Kelly, what was the response from your employees? Were they hesitant to come to work at all in the height of the outbreak? Or are they hesitant right now if you're located in some states where we are seeing a pretty significant surge in the number of cases?
KELLY VLANHAKIS-HANKS: And that's why I think communication and transparency is so vital and so important. So I held town hall meetings with all of my team members. Obviously, anybody who could work remotely on March 13, we sent all of those team members home so that I could lessen the numbers of people on-site at all of our facilities. Those people continued to work from home. And I've seen great results there, you know, with my sales, and marketing, and innovation, and purchasing teams, order entry and others that are working from home.
And then for our site production team members, we did a lot of training, a lot of auditing, just being really vigilant, and really making sure that we communicated effectively, over and over again, the great importance of following these protocols. And we've seen that if you're cleaning-- and I say cleaning first because if you look at the CDC guidelines it says first clean and then disinfect. So if you're cleaning and disinfecting, doing the mask, doing the temperature checks, really working the protocols, it's very effective.
And employees felt comfortable when they could see those things, those stringent protections really being in place, and that they knew that their voice mattered and counted. In all of those town hall meetings I took questions from all of our team members. Every single person in our facility who wanted to ask a question, I answered those questions. And it was a difficult time for all. But I'm so proud of the work that our team did. You know, I talk to my team a lot about, what is patriotism? And it really means rising up when your country needs you the most. And I would say that of all of our essential workers here at ECOS, they're really truly patriotic.
- Well, Kelly Vlahakis-Hanks, President and CEO of ECOS, we really enjoyed the conversation. We wish you and your employees all the best. Thanks so much for taking the time today.
KELLY VLANHAKIS-HANKS: Thank you so much for having me.