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byline: Gary Robertson

Staying on the move

Sometimes, it takes a soldier to know a soldier.

And Kevin Stump knows soldiers.

He has to. His business depends on it.

Stump is vice president/general manager of the training and logistics services division of PD Systems Inc., a service-disabled, veteran-owned business that trains soldiers. The company is largely staffed by veterans such as Stump.

PD Systems has its headquarters and other offices in Springfield, but it also has locations in Prince George County and in Michigan. Stump is in Prince George.

A Virginia Values Veterans-certified company, PD Systems has twice won the V3’s Governor’s Award for hiring veterans.

“I think employers are working hard to hire veterans. The military is seen in a better light than in post-Vietnam days,” says Stump, 62, who spent 26 years in the Army and retired as a lieutenant colonel.

PD Systems specializes in providing engineering, logistics and administrative services, as well as power systems and equipment.

Stump says veterans represent 62 percent of the company’s workforce, and 27 percent of those veterans are service-disabled.

Fort Lee, an Army base in Prince George County, is a primary client of the division Stump heads.

“I started out with three guys in 2011,” Stump says. “Then we won some contracts. Today, my division has 320 personnel on contract with the vast majority of them [317] supporting the Department of Defense.”

Stump was a petroleum and water officer in the Army. Soldiers in that field handle bulk fuels as well as water treatment and distribution.

Perhaps the most important contribution Stump made to his post-military career was making friends and keeping in contact with people he met along the way. When it came time to transition from active duty, Stump says he knew people he could call on for help.

“You make a lot of connections and you build a reputation. When I came out, I had three job offers,” Stump says.

He urges active-duty personnel to work hard every day, so they will have good references when they look for civilian jobs.

No matter what the nature of their military training, Stump believes, veterans who embrace their military experience can move into civilian employment with a lot of intangible assets.

“You have a capacity to learn, you have a work ethic and a passion to do well,” Stump says, emphasizing those traits are exactly what he is looking for in employees, as long as their skill sets match the job.

Fort Lee is home of the Army’s Quartermaster School and the Quartermaster Corps, where logistics is king.

“We are the trainers of the Army’s logisticians,” Stump says.

His division hires and trains technical instructors for machinists, welders, mechanics, cooks, gunsmiths, warehousing personnel and a variety of occupational categories dealing with transportation.

Because of the nature of the business (and the need to meet contract requirements), Stump is looking to fill his ranks with a heavy percentage of veterans.

Most of his employees have had years of experience in the military, which give them credibility as instructors. Stump says that a minimum of 12 years of military experience is typical for someone becoming an instructor.

PD Systems, through its subcontractor, Lean Insight, also has developed training for V3.

In March, for example, the company won accolades for developing a curriculum to train a variety of institutions — including colleges and apprenticeship facilities — on best practices in matriculating, retaining and graduating veterans, as well as placing them with employers.

Stump says V3 also hired the company to develop training for businesses on hiring veterans.

Stump says that, in moving to civilian jobs, stability for their families is high on the list of veterans’ priorities.

During a 22-year period, Stump and his family moved 17 times. For many military families, frequent moves and deployments — sometimes on very short notice — are part of the commitment they make.

Besides stability, veterans want a post-military job that provides good compensation and good health care, Stump says

To find and attract qualified veterans, PD Systems uses networking, job sites such as Indeed.com and job fairs.

“Now, we’ve got thousands of résumés in our data base,” Stump says. “When we need a particular skill, we know who to call.”

A voice for veterans

The day after Deshauna Barber buried her mother last year, she was due in New York to make back-to-back appearances on behalf of veterans’ causes, the focus of her reign as Miss USA 2016. Barber had to put on a happy face, because a sad Miss USA can’t do her job.

“I had to grieve while still chasing a dream,” she says.

A Virginia State University graduate, Barber, 27, is a captain in the U.S. Army Reserve and the first member of the military to win the Miss USA title. In May, she passed the crown to her successor, Kára McCullough, who like Barber had been Miss District of Columbia. 

Besides being African-American women representing the same city, Barber and McCullough also have both pursued careers in male-dominated, STEM fields (science, technology, engineering and mathematics).  Before becoming Miss USA, Barber was an IT analyst at the U.S. Department of Commerce, and McCullough was a scientist at the U.S. Nuclear Regulatory Commission.

Facing and overcoming adversity was one of the themes Barber planned to talk about at the Virginia Women Veterans Summit being held in late June in Chesapeake. The Virginia Department of Veterans Services sponsored the event.

She says women in the military know about adversity and the struggles involved in staying on the path they set for themselves.

During the Miss USA pageant in Las Vegas last year, Barber wowed the crowd with her answer to a question about women serving in combat. “We are just as tough as men,” she said. “As a commander of my unit, I am powerful. I am dedicated. And it is important that we recognize that gender does not limit us in the United States Army.”

Besides the loss of her mother, Barber says, she has had to face other struggles in her life, including rebuilding her self-esteem after suffering childhood sexual assault and bullying.

In connecting with business and industries throughout the past year, Barber says, she has been encouraged by their efforts to help and hire veterans. “Companies are doing what they can,” Barber says.

But she says there are still many unmet needs, especially in providing guidance for veterans as they transition from the military.

Too many veterans don’t know how to prepare for an interview, and most struggle in trying to explain how their military skills can meet the needs of civilian companies. “There aren’t enough mentors” to help vets through the process, she says, and too many vets are not finding jobs.

Mental illness, brought on by either post-traumatic stress, battlefield injuries or related reasons, plagues the veterans of several generations, Barber says.

“Mental illness contributes to the high homeless rate for veterans,” she adds, and also has been a factor in the growing number of suicides among vets.

Barber, who was promoted from lieutenant to captain in the Army Reserve during her Miss USA reign, will continue to make Washington, D.C., her home.

After joining the Army ROTC at 17, she was commissioned as a Reserve quartermaster officer in 2011 and was serving as logistics commander for the 988th Quartermaster Detachment Unit at Fort Meade, Md., at the time she became Miss USA.

Barber hopes to stay in the military an additional 14 years, until she reaches the 20-year mark and qualifies for retirement.

She is keeping up a military family tradition. Her mother and father, as well as her brother and sister, all served in the Army.

Taking the leap

With retirement looming after a quarter-century of service in the Air Force, Michael Burton reached out for help.

The rugged senior master sergeant contacted the Virginia Transition Assistance Program (VTAP), an arm of the state Department of Veterans Services. The program provides educational resources and employment help to veterans who call Virginia home, no matter where they may have been stationed.

Burton, 44, always has been a planner, and getting ready for retirement for him was not much different than preparing for a mission at an Air Force base in the U.S. or abroad.

“I don’t like waiting to see what’s going to happen to me next, especially with a wife and family,” he says.

Burton, the father of two children, also had applied for disability as the result of a severe sleep disorder that developed while he was serving in Afghanistan during 2011-12. So, that issue was on his mind, too.

No easy task
He says VTAP helped connect him with a Virginia Employment Commission representative. Burton welcomed all the assistance he could find in preparing for the next phase of his life.

“I hadn’t interviewed for a job in 25 years,” Burton says. For most long-term veterans like him, looking for a job is not an easy task.

He started planning about a year out from his separation from the military while stationed at Joint Base Langley-Eustis in Hampton. Burton was superintendent of the inspections division in the office of the inspector general of the Headquarters Air Combat Command.

Burton holds a degree in human resources and has commanded and trained airmen most of his career. “[But] I really didn’t know what I wanted to do after the military,” he says.

Burton began attending job fairs and other events where he could gauge the employment climate and figure out how military skills might qualify him for civilian jobs.

“I started getting my things in order: all my finances, documents and papers,” he says. “I can’t think how many times I wrote my résumé, maybe four or five times.”

Then, he waited until his discharge neared. That is when he could begin applying for jobs.

Many moves for family
Throughout the process, Burton says, the sacrifices his family had made for him were foremost in his thoughts. “We knew at a minimum every four years, we were going to move. Our children didn’t have roots,” and his wife was unable to focus on a career, Burton says.

Even though he had faced some difficult times in the military, he says he always believed his wife had the harder job.

In 2010, Burton and his family purchased a home in Williamsburg. He commuted to his military assignment in Hampton, and his wife got a job in the same area with Ferguson, the nation’s largest distributor of residential and commercial plumbing supplies.

For the first time in years, Burton and his wife could close the door at night with a sense of being somewhere permanent.

In finding a civilian job, Burton wanted it to be within reasonable commuting distance. He also had some other requirements for the next chapter of his life.

“I didn’t want to be tied to a desk,” Burton says. “I wanted to be able to talk to people … People are the most vital resources. What I learned a long time ago is that if you take care of the people, they will take care of the mission.”

Job interview classes
Burton took advantage of job interview classes for veterans offered by VTAP and its partners. With VTAP’s help, Burton prepared for an interview with a potential employer.

The first interview was by phone. Then in January, Burton had an in-person interview. In helping Burton get ready, VTAP suggested questions he might ask the interview panel.

The interview went well, and Burton was hired as a quality assurance and training manager at MAXIMUS in Hampton.  MAXIMUS, a Reston-based V3-certified company, operates health and human services programs on behalf of government agencies.

While still on active duty, Burton took what is called “terminal leave,” using leave time he had accumulated but had not used while he was in service.

He began working March 1 with the understanding that he would return to the Air Force if they needed him before his retirement on April 30. 

The retired master sergeant says one of his challenges in the civilian world has been trying to pare down his use of military lingo. Once in talking with his new colleagues, he described an upcoming meeting as a “hot wash.”

Burton got blank stares until he explained the term. “Hot wash” is a military expression describing the debriefing of personnel immediately after they return from a mission.

Looking back at the incident, Burton laughs. All he could think to say to his colleagues at the time was, “I’m going to teach you a few things, and you’re going to teach me a few things.”

Change is in the air

What is changing in executive education?

A spot check of programs across the state offers a number of different answers: courses tailored to company needs, increasing use of executive education as an employee retention tool and the growing influence of societal shifts on corporate cultures.

At the Robins School of Business at the University of Richmond, customization is king.

“There has been a big shift from open enrollment to more custom engagement,” says Randy Raggio, associate dean and executive director of executive education at the business school.

He estimates that during the past several years about 80 percent of the executive education programs at Robins fell into the custom category.

Raggio points to recent clients who had specific, urgent needs. In one instance, a century-old industrial organization wanted a program providing employees with the latest thinking in a variety of disciplines.

“We worked with six projects of strategic importance to the company,” Raggio says. “The whole program culminates in a presentation to the executive team.”

The projects ranged from strategic thinking to marketing to finance. In every instance, Raggio says, classes are crafted around specific projects and outcomes.

For another client, a growing health-care company, the executive education team worked more like a consulting firm, drawing in expertise from various corners of the university in addition to the business school.

“We did nearly everything from infrastructure development to helping them find a new software provider,” Raggio says.

At times, depending on the needs of the clients, the business school’s executive education teams will draw on expertise from UR’s Jepson School of Leadership Studies, its School of Law and faculty members in areas ranging from software development to marketing. “We leverage everybody,” Raggio says.

Joanne Even, business development director of executive education at the Robins School, adds that there is also a growing recognition that, besides technical skills, modern leaders must have soft skills to communicate with employees.

“It’s the social intelligence that helps,” Even says, referring to the ability to negotiate complex social relationships and environments. “People are working much more collaboratively,” Raggio adds.

Keeping millennials onboard
At the Mason School of Business at the College of William & Mary, Associate Dean Ken White says companies increasingly are using executive education as a retention tool.

“Keeping major talent has become an issue for organizations,” White says. Emerging leaders and executives expect companies to invest in them, White says. Retaining millennials — who have displaced baby boomers as America’s largest generation — has become a special priority.

“Most millennials are not going to a job to stay for 20 years,” White says, adding companies need to show how much they want them to stay on.

While that approach may seem old school, White says improved listening skills set executives apart in a world that is becoming increasingly distracted by a barrage of cellphone calls, texts and emails.

“Because of the continuous rise of technology … there’s a greater emphasis on communications,” White says. “The impactful communicator rises to the top.”

Changing people
James Shaeffer, founding dean of the College of Continuing Education and Professional Development at Old Dominion University, says the role of executive training has taken a new direction during his time in the field.

The “feel-good” kind of training is not what companies and organizations are looking for, Shaeffer says. “We have to show how we are changing people,” he says, noting that simply checking a box to show that someone took a program is no longer sufficient.

Many of the students Shaeffer and his ODU colleagues see are from the civilian side of the U.S. Fleet Forces Command in Norfolk.

The courses most in demand at Fleet Forces Command deal with cybersecurity, procurement, finance and leadership, and not everyone on the class rolls typically has had the same level of training.

“You’re going to have a group of students coming to the classroom with varying degrees of expertise. You have to be flexible,” Shaeffer says.

As in much of executive education, the learning is collaborative, interactive and collegial, Shaeffer says, with everyone contributing to the conversation. 

“Those who have great knowledge teach those who don’t,” Shaeffer says.

New corporate culture
Michaela Bearden, director at the Center for Corporate Education at the Virginia Commonwealth University School of Business, says market trends are driving many aspects of executive education. The field also is being influenced by cultural shifts in society as multiple generations and different ethnicities interact in the workplace.
“More companies want to change their own culture,” Bearden says, and one of the most important steps in that process can be executive education.

She says every company is looking for something a little different, and the most successful faculties are those that can adapt their research to companies’ needs, creating an environment for practical learning.

“Even with rapid advances in technology, people management and leadership continue to be among the most important skills,” Bearden says.

But in a marketplace that is always in flux, she adds that executives also need a high degree of emotional intelligence, flexibility and a creative streak to stay relevant.

As a generational shift occurs in the workplace, and technology drives an all-day workday, Bearden says, there is increasing attention on topics that help people “meld their personal lives into their working lives. They’re looking for more work-life balance.”

One of the advantages of being affiliated with a major research university such as VCU, Bearden says, is that teaching and training is never stagnant. Faculty members are immersed in research that provides executives with an ever-changing knowledge base.

But she suggests that the bar is rising for executive education faculty.

“Instructors,” Bearden says, “need to be strong storytellers … be capable of facilitating discussions and have real world credibility. They also have to be adaptable and excellent listeners.”

Different learning styles
Programs adapt to the rapidly shifting requirements of businessAt George Mason University in Northern Virginia, executive education leaders are looking at different kinds of learning styles that corporations and the federal government — some of the university’s biggest executive education clients — are demanding to meet their evolving needs.

Brad Dawson, executive director of Mason’s Learning Solutions, says that clients are focusing more on the composite of their employees’ learning experiences, rather than just a particular degree.

As a result, badging has become more prominent — giving employees credit for experiences and events that add to their professional portfolio and for skills learned in the process.

Participation in webinars, conferences and MOOCs (massive open online courses) — courses of study made available over the internet without charge to a very large number of people — are all ways that employees can earn badges, Dawson says.

Dawson says another shift has been that executive education is now more often a melding of disciplines rather than a single rigid program.

“We pull pieces of programs from across the university based on the requirements of that customer. We like the fact that industries and companies are interested in education in a different way,” Dawson says.

Roy Hinton, associate dean of executive education at Mason, says he recently participated in a multidisciplinary effort for a group of 30 participants that involved business faculty, as well as faculty from performing arts, technology and engineering.

“This is not your mama’s executive education anymore,” Dawson says with a laugh.

Old Dominion disruption

In his late 30s, Julien Patterson left a career with the CIA with plans to start a business.

His initial efforts failed. In 1990, however, a lucrative contract and a $10,000 loan from a friend helped Patterson and his wife, Terri Wesselman, launch Omniplex World Services Corp. The Chantilly-based security and investigative firm grew, eventually employing more than 3,500 people and having annual revenue of more than $100 million.

Patterson and Wesselman sold the company in 2012 to  California-based Altamont Capital Partners.  Now retired, the couple have homes in the Northern Neck and in Florida.

But some would not recognize their lifestyle as retirement.

They have started four small businesses in the Northern Neck: an art gallery, a home décor store, a coffee shop and a clothing boutique. They also are involved in potential business ventures in Florida.

Patterson, a former chairman of the Virginia Economic Development Partnership and the Virginia Chamber of Commerce, says their aim is to create jobs and stimulate the local economy.

“For me, I think retirement is the change in venue that allows you to do the things you want to do that benefit others and brings you satisfaction and a sense of well-being,” he says.

Patterson, who is 65, is on the leading edge of the baby-boom generation that is redefining retirement.  Some retiring boomers will leave the workforce entirely. Others, like Patterson, will begin new careers because they find work to be fulfilling. A third group will continue working because, financially, they have no other choice.

In 1900, only 13 percent of Americans were age 50 and over. By 2002, the number had more than doubled to 27 percent. By 2020, it will be 35 percent.

But that’s only a ripple in the tidal wave that’s coming, as 78 million boomers — born between 1946 and 1964 — enter their retirement years.

Every state is bracing for what is being called an unprecedented demographic disruption.

Currently, Virginia is home to 1.4 million people who are over the age of 65, about 17 percent of an estimated population of 8.4 million. The number of Virginians in that age group is expected to climb to 2.3 million by 2030, representing nearly a quarter of the projected state population of 9.8 million.

In addition to current Virginia residents who retire here, retirees from other states also may be headed this way. In national surveys, Virginia is often mentioned as one of the best states in which to retire. Bankrate, for example, has ranked it No. 5 on its list for two years in a row.

In short order, the “old” in the Old Dominion may soon resonate in ways it never has before.

‘This is my third act’
A recent survey by the Transamerica Center for Retirement Studies, for example, found that 65 percent of baby boomers expect to work past age 65 or do not plan to retire at all. Many respondents indicated they plan to continue working because they believe they will need the income and health benefits offered by an employer. Other boomers,      however, see opportunities for fulfilling careers beyond retirement age. 

Desiree White stopped working for years for family reasons. Then, in her 50s, she returned to the classroom with hopes of rejoining the workforce and drawing a paycheck.

She enrolled at Blue Ridge Community College in Weyers Cave, earning “aging in place” certification to work with the elderly. She took courses in areas such as the principles of nutrition and human development and mental-health skills training.

“It appealed to me, helping people grow old,” White says.

Health care for the aging, in fact, is a rapidly growing occupational category. White is among the boomers who are stepping in to fill gaps in high-demand jobs.

“At a time in life when a lot of people are thinking about retiring in 10 years, I believe I have a lot more to give than ever. It’s given me a brand new life,” White says.

Robin Hawks, an associate professor of psychology and human services at Blue Ridge, says that 104 of the 3,600 students registered for the spring semester at the community college are 50 or older.

Hawks says the baby boomers she sees in the classroom either want to re-enter the workforce as White did or to give themselves more opportunity to grow in their current jobs.

Hawks fits that pattern herself. She was a private-practice counselor for years before becoming a professor. Now in her late 50s, she is pursuing a doctorate to make herself more marketable. “This is my third act,” she says. “I don’t anticipate retiring at all.”

For baby boomers who don’t want to retire, there are still opportunities for them at all levels, including the executive suite.

“We’ve hired as many 60-plus-year-olds as 40-year-olds. If someone is qualified, they’re qualified,” says Hope Johnson, CEO of Pyramind LLC, an executive recruiting firm in Chantilly.

Johnson says “economic necessity and boredom” are pushing a lot of retirees back into the workforce.

Not your father’s retirement
The financial environment facing baby boomers is far different from the one their parents encountered when they approached 65, says Matt Thornhill, the founder and president of The Boomer Project, a Richmond-based firm that tracks demographic trends.

Boomers, he says, may live longer than their parents, but many will not have the financial resources that members of the “Greatest Generation” had.

Based on the data he’s seen, Thornhill says that about a third of boomers, 25 million, will be able to live off their savings and retire comfortably.

Another third “won’t have two nickels to rub together,” he says.  “They plan to live off Social Security, Medicare and the equity in their homes. And, we say, ‘Good luck to that.’ ”

Of the baby boomers in the middle, perhaps the most critical third, Thornhill says some will make it and some will not. But he says those on the edge are running out of time to tilt the odds in their favor.

Thornhill says one of the harsh realities facing boomers is that the ratio of young workers to retirees is shrinking dramatically.

The Social Security Administration projects that the number of workers per beneficiary will fall from about 3 to 1 now to 2 to 1 by 2030. According to some projections, the Social Security Trust Fund will be fully exhausted by 2036.

A recently completed study by the Wason Center for Public Policy at Christopher Newport University says that an increasing number of Virginians are entering retirement with insufficient means.

One of the issues facing boomers, say Quentin Kidd, director of the Wason Center, and Jia Yu, a lecturer in the Department of Economics at Christopher Newport, is the decline in defined-benefit pension plans provided by employers.

In their place, employees have become much more responsible for saving for their retirement through 401(k) plans and other options.

One result, Kidd and Yu say, is that workers in their 60s are finding that they don’t have money they need to sustain themselves in retirement because they failed to save enough during their careers.

“If people save less … what it means is that increasingly Virginia’s retirement population is going to be more dependent” on core government support programs, Kidd says.

Potential trouble
That situation, coupled with the surge in the numbers of retirees, could mean trouble for government officials.

“Policy makers,” the Wason Center report says, “need to pay attention to the expected growth in publicly funded assistance programs for retirees.”

“The Cost of Retiring in Virginia,” a report created at the behest of the Virginia branch of the AARP, had these key findings:

  • Fifteen percent of new retirees in Virginia during the next 15 years will each have a net worth of $201,000 or less, only about half of which will be easily accessible to pay expenses. For many Virginians, their primary source of net worth is their home.
  • Through 2030, each of the least prepared retirees in Virginia will cost the state, local and federal governments an average of $22,500 annually in assistance. Through 2030, the total outlay of government-funded support is expected to top $4.7 billion and could reach as high as $5.1 billion. The top public assistance programs for low-income seniors are Medicaid, the Supplemental Nutrition Assistance Program and Low Income Home Energy Assistance Program.  In addition, some localities offer additional assistance to qualifying seniors, in the form of lower real estate taxes and other discounts.
  • A 10 percent increase in net worth among retirees could save taxpayers a total of $326 million through 2030 in reduced costs of government-funded benefits, according to the report.
  • One of the most costly of these support programs is Medicaid, a government assistance program in which Virginia pays 50 percent toward health care for low-income individuals, and the federal government pays the other half. 
  • In March, Virginia Medicaid was covering more than a million people. The state had budgeted $9.3 billion for Medicaid in 2017-18, and ithe legislature approved $255 million more during this year’s session. The program grew by 4.5 percent from fiscal year 2014 to 2015 and 8.5 percent last fiscal year.
  • In 2030, an estimated 155,300 new retirees will become eligible for Medicaid coverage with average costs of about $20,000 per person, or $3.1 billion.

Where will they live?
Baby boomers, who have defied convention at nearly every turn in their generational journey, might do it again when they decide where they want to live in retirement.

A national survey of 1,000 persons by Better Homes and Gardens Real Estate found that 57 percent of boomers plan to leave their current homes when they retire.

But nearly three-quarters of boomers, 72 percent, say they will retire in the state where they currently live.

Just over a quarter, 27 percent, want to be in a traditional retirement community, such as a neighborhood for residents who are 55 or older. About 40 percent plan to retire in rural areas or small towns, while 26 percent want to live in an urban environment. The remaining 8 percent want to live in “lifestyle” communities, such as those planned around golf courses.

Thornhill of The Boomer Project says boomers will live “everywhere” because they represent such a mammoth demographic group.

Retirement communities, which have been building at a furious pace in some areas, will get their share.

Even if a much lower percentage of boomers move into retirement communities than their parents did, “senior living will be full because there are so many of them,” Thornhill says.

Glen Allen-based developer HHHunt Communities announced plans in late February for a 520-home community for people 55 and older in Goochland County. The project on 208 acres off Tuckahoe Creek Parkway near Capital One Financial Corp.’s West Creek campus includes a clubhouse, pool, walking trails and open green spaces.

Jonathan Ridout, director of development for HHHunt, says while the new development is specifically focused on people in the 50-59 age group who are looking for a new home, anyone can live there.

One trend, he says, is that midlife boomers are looking for “more open space and less formal space,” and they’re particularly interested in incorporating outdoor living into their lifestyle.

“Another big trend is flexibility in the floor plans. This demographic might want a home office during the week that can be a bedroom on the weekend,” Ridout says.

Among boomers looking for a new home to carry them through retirement, Ridout adds that more than a third are relocating fewer than seven miles from their current home.

For those who don’t want to move into conventional senior living communities or other retirement facilities, there are other options.

In Ashland, a group of about 30 residents is forming a nonprofit organization whose goal is to help people stay in their homes as they grow older.

Beth Harrison, a retired philosophy and religion professor at Northern Virginia Community College, is president of the group, known as “At Home in Ashland.”

“Programs and services are provided through volunteer-based, neighbor-to-neighbor, pay-it-forward mutual support services,” according to a statement of the organization’s core principles.

The services, which are still in the planning stages, would range from daily “check-in calls” on seniors to transportation to doctors’ appointments and help with routine home-maintenance chores, such as help changing hard-to-reach light bulbs.

A different  approach, a senior co-housing community called ElderSpirit, is taking place in Abingdon in Southwest Virginia. Co-housing communities are groups in which members of individual households share common space, often eat meals together and gather for socializing or religious observances.

Started by former nuns, ElderSpirit includes 29 houses with more than 40 residents. Another 14 members live off-site in homes built next door to the community

Dene Peterson, 87, a former nun and social worker who was a driving force in creating ElderSpirit, says the community has a waiting list of 30 people. “I’m amazed how thriving it is,” she says.

Attracting attention

No one likes to be called names, but sometimes it’s okay.

Much of the name-calling last year about Richmond was appreciated.

CNBC identified Richmond (population 221,000) as one of the 20 top cities in America to start a business.

Zillow described Richmond as a millennial-leaning city, with more of its people in the 23-to-34-year-old age group living alone than any other U.S. metro area, because of the city’s vibrant labor market.

Cushman & Wakefield, a global real-estate services firm, called Carytown, a boutique-filled shopping district in the city, one of the top 15 trendiest retail markets in the country for connecting to millennials and incubating retail trends.

Men’s Journal, in a travel story, said Richmond is the “modern cultural capital of the South.”

Richmond’s expanding restaurant scene also drew raves. Recently, OpenTable, an online restaurant reservation service, named  L’Opossum one of the “100 Best Restaurants For Foodies in America,” based on more than 5 million restaurant reviews.

“All the accolades that come out during the year build on the last, whether it’s the food scene or being one of the most tattooed cities in America” says Jane Ferrara, chief operating officer in Richmond’s economic development office. “It paints a compelling story of who we are as a city.” The accolades also catch the eye of business prospects.

“Companies want to see vibrancy, cities that are growing and active, with … a sense of excitement,” Ferrara says.

That sense of vibrancy throughout Central Virginia has helped it land projects in a variety of industries in the past year. In addition to a young, well-educated population, the region is capitalizing on its logistical advantages as a relatively low-cost hub in the middle of the East Coast.

Richmond area
One of Richmond’s most significant business announcements came in October. Washington, D.C.-based CoStar, listed by Fortune magazine as one of the country’s 100 fastest-growing companies, said it plans to hire 730 employees in establishing an operations and global research center near the James River.

CoStar, which has about 3,300 employees worldwide, performs research and analysis for the commercial real estate industry. The research center project is expected to contribute about $250 million in leases, payroll taxes and capital spending to Richmond’s economy during the next several years.

A few months before CoStar’s announcement, another company, ICMA-RC, announced it was opening an office with 100 employees in downtown Richmond. The firm, which manages public-sector retirement plans, hopes to hire another 100 workers in coming years.

The city was not alone in generating jobs in the region. The surrounding counties of Chesterfield (population, 337,000), Henrico (306,000) and Hanover (103,000) shared in the growth.

“For us, it was a great year. All told we generated $300 million in direct investment in the region, and 1,400 jobs,” says Barry Matherly, president and CEO of the Greater Richmond Partnership (GRP), an economic development marketing organization.

Matherly says Richmond was not battered as badly as Northern Virginia and Hampton Roads by the federal defense spending cuts. But it was hurt by the 2007-09 recession, and about eight years ago, the calculus changed in terms of economic prospects. With U.S. companies retrenching, GRP began a more aggressive search for international prospects. That search has been fruitful.

“Sixty-seven percent of the current prospects looking at the Richmond region are international,” Matherly says.

One international company coming to the region this year was Polykon. The French company started work in October on a $60 million plant in Henrico. It will manufacture the ingredients used in cosmetics produced by companies such as Estée Lauder and L’Oreal.

Another French company, Fareva, recently expanded in Henrico, adding about 80 jobs for a new product line, aerosol elements for spray-on sunscreen and dry shampoo. The company’s move was part of a previously announced $40 million investment in its facility.  The plant already produces well-known brands such as Robitussin cough medicine and ChapStick lip balm.

The region’s largest single investment announcement last year came from a California-based bottled-beverage company. Niagara Bottling said in August that it would invest $95 million in a manufacturing and bottling operation in Chesterfield County’s Meadowville Technology Park, creating 76 jobs.

Garrett Hart, Chesterfield’s economic development director, says the county seeks to increase its tax base as much as possible. Companies that use a significant amount of automation help accomplish that.

“So projects like Niagara and Amazon, who invest hundreds of millions of dollars in automation, give us a greater tax base per square foot. This is why we target them,” Hart says.

Amazon has fulfillment centers in Chesterfield and Dinwiddie counties employing more than 3,800 workers.

Amazon’s presence points to the region’s growing reputation as a prime logistics hub.

In 2015, The Boyd Co., a Princeton, N.J.-based firm that provides location advice to U.S. and foreign corporations, named Chesterfield the top location on the East Coast for operating a new distribution warehouse. The study pointed to the county’s strategic position at the crossroads of major interstates in the middle of the East Coast.

In addition to making a name for itself in logistics, Chesterfield has sought to make its mark in sports tourism. Last year, the county acquired the 115-acre River City Sportsplex, which bills itself as having the largest collection of synthetic fields in the U.S.

Hart says the regional economic impact of sports tourism was $76.8 million in fiscal year 2016, principally from hotel bookings. The economic impact in the county alone was $37.7 million, a nearly 13 percent increase from the previous year.

Tri-Cities and Charlottesville areas
Virginia’s Gateway Region, a regional organization serving the Tri-Cities — Colonial Heights, Hopewell and Petersburg — plus five surrounding counties, also is gaining a reputation for its logistics expertise.

The group’s CEO, Renee Chapline, points to plans by German discount grocer Aldi to invest $57 million in Dinwiddie establishing a division headquarters and a 500,000-square-foot distribution center. In the U.S., Aldi has 1,500 stores in 34 states.

Chapline also is helping lead an export initiative begun by the Greater Richmond Partnership. The program is focused on increasing Central Virginia exports to foreign countries as a way to stimulate economic growth and create jobs.

The Central Virginia Partnership for Economic Development, an economic development group serving Charlottesville and surrounding counties, is proud of a big gain in Culpeper where Euro-Composites announced a $10.5 million expansion, with the creation of 58 additional jobs.

The Charlottesville-Albemarle County retail hub also continues to perform well, with retail sales poised for a third-straight record year, according to the Charlottesville Regional Chamber of Commerce.

Lynchburg area
In the Lynchburg area, Megan Lucas, CEO of the Lynchburg Regional Business Alliance, points to the 619 new jobs and $48 million in capital investment recorded last year as signs of a growing local economy.

The region expects to gain 300 jobs with the arrival of Pacific Life in Lynchburg and more than 200 with Standard Insurance setting up in Altavista.

Health care and higher education are top drivers in the region. In the health-care sector, for example, Centra, a nonprofit regional health system, has grown through mergers to become the employer of more than 6,400 people.

But it’s in higher education that Lynchburg really stands out.

The area has four, four-year institutions of higher learning: Lynchburg College, Randolph College, Sweet Briar College and Liberty University.

Liberty, with more than 35,000 full-time and 38,000 part-time students, has been on a juggernaut with a compounded annual growth rate of 13.9 percent from the 2007-08 to 2015-16 academic years.

With 8,800 on the payroll, Liberty now is Lynchburg’s largest employer, accounting for one out of every five jobs in the region, according to various studies.

With so many colleges, Lucas says, the area has an educated workforce that can be utilized by nearly any industry.

“I believe we’re the center of excellence for higher education in this region, and Liberty University is the economic engine for the higher education sector,” Lucas says. “It affects everything we do.”

Quick work

Operating in the dark is a skill that those working in economic development have to acquire and perfect. Patience helps a lot, too.

Both came into play when Washington, D.C.-based CoStar Group Inc., a major provider of commercial real estate information with about 3,300 employees worldwide, came calling on the Richmond area as a possible site for a research center.

In keeping with standard practice for many economic prospects, CoStar kept its identity hidden in the early stages.

Brian Berkey, senior vice president at the Richmond office of Cushman & Wakefield|Thalhimer, a commercial brokerage firm, worked with Amy Broderick, an associate at the firm, in representing CoStar locally. They informed the Greater Richmond Partnership that a major company was looking at possibly establishing a presence in the area and hiring hundreds of employees.

“When we got the contact, we were told that it was between us, Atlanta, Charlotte and Kansas City. When we found out who the competitors were, we began our own research analysis of how we stacked  up,” says Barry Matherly, CEO and president of the Greater Richmond Partnership, a regional economic development group.

It was June 2016 when Matherly alerted the partnership’s member localities that a major prospect was looking at the area. CoStar quickly narrowed its choices between Richmond and Henrico County, Matherly says.

Meanwhile, Berkey and Broderick, who had worked with CoStar earlier in finding a site for a local sales office, were searching for a building that would be a good match for the company’s culture and exacting standards.

Berkey says CoStar wanted modern, Class A office space that required minimal improvements because it was on a tight schedule.

They found a property in Richmond that checked all the boxes, the WestRock building overlooking the James River.

The 310,000- square-foot building is the former headquarters of the packaging company MeadWestvaco, which merged with Georgia-based Rock-Tenn in 2015 to form WestRock. The deal had created vacant space in the nine-story structure, which was built in 2009. CoStar signaled it would occupy the top four floors of the building, hiring about 730 employees.

“CoStar was looking for a workplace environment to satisfy the millennial generation,” Berkey says. “The building’s walkability/bikeability, proximity to amenities and attention to sustainability were all attractive features.”

Ken Campbell, Kit Tyler and Matt Hamilton of Colliers|Richmond represented WestRock in negotiations for the office space.

As the site selection moved forward, incentives were put forward to secure the company, which is investing $8.7 million in the project.

Gov. Terry McAuliffe approved a $4 million grant from the Commonwealth’s Opportunity Fund, an amount that the city had to match.

Meanwhile, Lee Downey, director of the city’s economic development office, and Jane Ferrara, the chief operating officer, were racing to find ways to sweeten the offer in ways that CoStar would be hard pressed to pass up.

Richmond decided that three-quarters of its local match would come in the form of workforce development. “We knew they were hiring over 700 people very quickly, and those resources became increasingly important,” Ferrara says.

As part of the effort, the city provided the means to identify and screen prospective applicants, train them and then test those selected to see whether they would make a good fit for CoStar.

Ferrara says candidates who were not a good match still had training and experience that would aid them in other jobs.

Then, there was the matter of transportation options. “CoStar told us loud and clear that public transit was important,” Ferrara says.

The city’s upcoming high-speed bus line along its main thoroughfare, Broad Street, was part of what CoStar was looking for.

But the initial route of the Bus Rapid Transit (BRT), from Rocketts Landing in the city’s East End to The Shops at Willow Lawn in the West End, would run blocks away from CoStar’s offices.

To address that issue, Downey and Ferrara say they will work with the transit agency, GRTC, to provide a connector service for CoStar, which is located on South Fifth Street, and possibly for other sites, such as Dominion Resources’ announced 20-story office tower on South Sixth Street.

To further accommodate CoStar, the city is installing one of its new bike-share stations near the company’s research center.

Users will be able to pick up a bike at one station and drop it off at another. Prices vary from an annual pass of $96 to a per-ride price of $1.75.

“CoStar loved all of this,” Ferrara says of the transportation initiatives.

The company’s decision to locate its research center in Richmond was announced in October, about five months after the Greater Richmond Partnership first got word about the project.

“It was super quick,” says Matherly, the partnership’s CEO.

On average, he says, it takes about 13 months to bring a company to the announcement stage after first contact. Sometimes the process can stretch out for years.

 

Central Virginia’s recent deals

Company Location #Jobs
CoStar Group Inc. Richmond 730
Pacific Life Lynchburg 300
Direct Mail Solutions Henrico County 243
ICMA-RC Richmond 200
Standard Insurance Co. Altavista 200
Apex Clean Energy Charlottesville 184
Aldi U.S. Dinwiddie County 145
L. Knife & Son Inc. Henrico County 110
Thought Logic Richmond 100
Hudson Industries Henrico County 87

Source: Virginia Economic Development Partnership, 2016.

Time for a life

(Scroll to the bottom for a gallery of images from the 2017 Virginia Business Best Places to Work awards luncheon.)

In previous generations, work was everything. For some, it still is.

Yet many in a rising generation of workers say they want more. They want flexible schedules that permit time to be with their families or to engage in community projects. In other words, time for a life beyond the workplace.

A 2014 Heartland Monitor Poll — sponsored by Allstate Insurance, The National Journal and The Atlantic magazine — found that, if given the choice, two-thirds of Americans would choose “more flexibility and shorter hours … but less pay.”

In that same poll, 77 percent of millennials — who have supplanted baby boomers as the largest living generation — say it’s important to have “the flexibility to work at different hours.”

The pursuit of a balance between work and life is clearly a priority — or is rapidly becoming one — among today’s workers.

And that trend is reflected in the number of companies that offer flex time and openly acknowledge the desire of their employees to have more balance in their lives.

Dozens of companies on Virginia Business’ annual list of Best Places to Work in Virginia tout flexible hours, telecommuting, parental leave or other family-friendly benefits.

Other companies give a nod to work-life balance with 35-hour workweeks. They include the Consumer Technology Association and Healthcare Distribution Alliance, both based in Arlington.

Still others offer telecommuting options and shortened workweeks during the summer, such as Vaco in Richmond that releases workers at noon on Fridays during summer hours.

This is the seventh year that Virginia Business has compiled the Best Places to Work list in cooperation with the Best Companies Group, a Pennsylvania-based firm.

In late 2016, 175 companies registered to become one of Virginia’s Best Places to Work in 2017. One hundred were selected in three categories: small (15-99 U.S. employees), midsize (100-249) and large (250 or more).

Best Companies Group benchmarked the companies on a list of core values: leadership and planning; corporate culture and communication; role satisfaction; work environment; relationships with supervisors; training and benefits; pay and overall employee engagement.

 


 

 

Martinsville bright spot

In Martinsville, good jobs are hard to find a decade after the collapse of the textile and furniture industries. The region’s unemployment rate typically trends higher than the state or national average.

In October, for example, the unemployment rate in Martinsville stood at 6.7 percent, compared with a state average of 4.2 percent and a national average of 4.6 percent.


American Global Logistics, a specialist in global and domestic shipping services, is one of the bright spots in Martinsville’s economy.  It is ranked No. 13 on the Small Employers list. Jon Norman, the company’s manager, says the company is committed to creating a family atmosphere in a business that is fast-paced and often stressful.

“What we’ve discovered is that it works best when you provide employees with a flexible schedule,” he says. “It helps them work out child care [issues] and doctors’ appointments. When we give our employees an ability to work from home, there’s a palpable increase in morale. It also makes them more accountable for what they do.”

Among other duties, the company’s 70-plus workers in Martinsville help coordinate shipping from factories in Asia and importers in the U.S.

Norman says many of his employees have come from jobs at local factories that have closed. These workers are driven to improve themselves and help their families. Some have earned degrees at local community colleges, and others have completed technical training courses to improve their skills.

Norman says the company puts a lot of trust in its employees and gives them a lot of responsibility.

“We’re looking for self-starters with critical thinking [skills]. The main thing is having an attitude that you can tackle anything without being overwhelmed,” Norman says.  “No one is micromanaged … everybody owns their own work. They take pride in what they do,” he says.

There are no set vacation days for employees and no time sheets. When someone needs a day off, they can take it as long as their accounts are in order, Norman says.

“This is a small town. We know people have their needs,” Norman says, explaining the reason for the flex-time arrangement and the other accommodations the company has made.  “It’s been super successful,” he says.

Time with his sons
Bowen Richwine, director of business development at Corps Solutions in Stafford County (fourth on the Midsize Employer list), appreciates the fact the company allows its employees to tailor their work hours to fit their lives. Richwine spent 20 years in the Marines, retiring as a lieutenant colonel.

Long periods of time in hostile territory were frequent. And they took their toll on his family, especially his relationship with his three sons, now ages 6, 11 and 12. “When I was in Iraq, I missed whole years of their lives,” says Richwine.

At Corps Solutions, which provides training and support for the Marine Corps and other national security stakeholders, Richwine says he found a “family-friendly” employer.

For the first time, he was able to have breakfast with his sons, coach their sports teams or watch them play. Work flexibility also has enabled Richwine to pursue a doctorate in education.

Trust and accountability have a big role in making flexible work hours successful, Richwine says.  “We play by big-boy rules,” he adds.

Corps Solutions has about 70 employees in Virginia and 190 nationwide.

Achieving a balance
Faith Driggers is a human resources manager at VHB (No. 18 among Large Employers), an engineering firm based in Watertown, Mass. It has four offices in Virginia: Richmond, Tysons, Virginia Beach and Williamsburg.

Driggers says that, for members of the millennial generation, work is a big part of who they are, but it is not everything.

She says that for her father, a baby boomer, work was engrossing. Her dad, she says, would work long hours at the office and then spend more hours at home working into the night.  “He’s sometimes surprised by the flexibility I have,” she says.

That flexibility stems from VHB’s philosophy and core values. “We believe in achieving a balance between professional and personal lives, and we want to work with our employees to see what that looks like,” Driggers says.

For some employees, being able to arrive later in the morning enables them to take a child to school. Others are caregivers for elderly parents. They want to come in and leave earlier to relieve another caregiver.

A changing culture
When Perry Frazer went to work 20 years ago for the commercial real estate firm CBRE (No. 6 on the Large Employers list), one rule was consistent. “We were encouraged to come in early and leave late,” says Frazer, managing director of the firm’s Hampton Roads office. Time with family often suffered.

With the communications offered by smart phones and other devices, Frazer says, you can work just as many hours — or maybe more — outside the office, while still being able to maintain a family life.
The culture has changed, he says, and younger employees support that change. “We let our employees figure out on their own how to get the work done and where they need to be,” Frazer says.

To give the workplace a family vibe, CBRE provides a light breakfast for employees and recently staged a pie-baking/pie tasting competition.

Who’s online?
How do you implement work-life balance at a company where the expectation is that you’re on call 24/7?

That’s one of the challenges at the Association Resource Group (ARG) in McLean, a technology consulting firm with 55 employees (No. 59 among Small Employers). Everyone at the company receives a free iPhone and iPad to keep them connected.

“We’re always on,” says CEO Greg Praske. “The expectations have increased, and the pace is extraordinary. If not properly managed, a work day will have no beginning and no end.”

One way the company manages is through technology that shows which employees are online.

With that information, if a client calls with an urgent request after hours, a manager doesn’t have to call a mother or father who is offline, struggling with a 2-year-old with a bad cold. Instead, an employee who is already online can respond. “It helps us set boundaries,” says Erica Lord, the company’s director of business development.

ARG gives employees the option of working from home on Fridays.

Praske believes that in commuter-challenged areas such as Northern Virginia an out-of-office workforce might be increasingly common. “We’re rapidly seeing that being anchored in an office is not a requirement for being productive,” he says. “Companies are moving their servers out of the back room to the cloud. You will have access anywhere.”

One of the ways that companies help employees achieve work-life balance is to involve them in community activities.

One effort at ARG originated from an experience Praske had at church. On one Sunday, he was handed a $20 bill when he walked in the church door. “I said, ‘What’s going on here?’” Praske recalls.  Church members were asked to take the $20 and perform a good deed.

On several occasions Praske has given employees $100 to spend on good deeds. In honor of the company’s 25th anniversary, employees received $250 to perform random acts of kindness. “We’ve had these amazing stories,” Praske says.

One employee bought jump ropes and chalk and gave them to children in a needy neighborhood. Then, she took her own $100 and bought more toys.

Another employee went to a transit station and purchased free fare cards for tourists.

“The stories are unbelievable,” Praske says, explaining that employees are asked to write down how their acts of kindness affected others.

“Reading each other’s stories inspires us and challenges us,” Praske says. And for a few moments, it gives employees a chance to reflect on the fact that there’s more to life than work.

Virginia Business Best Places to Work 2017

Best Places to Work Multiple Year Winners

Top Small Employer: NuWave Solutions and List of small employers

Top Midsize Employer: Dynamis Inc. and List of midsize employers

Top Large Employer: Accounting Principals and List of large employers

Related story: Bonus bonanza


Below is a gallery of photos from the 2017 Virginia Business Best Places to Work awards Luncheon held February 2nd at the Williamsburg Lodge.  Please contact Art Director, Adrienne Watson at [email protected] with the image number if you would like a copy of your photo for your company press release.

Bonus bonanza

What says it better than money? Well, perhaps nothing.

Maybe that’s the reason that many of the companies on the Virginia Business list of best companies to work for don’t mind doling it out — above and beyond salaries.

The extra cash comes in the form of bonuses for a job well done, in gift cards, in expense-paid trips to exotic locales or a local resort, in profit-sharing arrangements, and in sweetened retirements.

One health-care company offers a car for exceptional performance, so does an insurance company.

Many of the companies like to reward employees for referring prospective employees. For example, at Grow, a marketing and public relations firm in Norfolk (sixth on the Small Employers list), it pays handsomely to bring in a competent teammate. The company offers $4,000 each to employees when hirings are made as a result of their referrals.

Not to be outdone, Resonate, an advertising, public relations and marketing firm in Reston (No. 53 among Small Employers), pays $5,000 for a successful employee referral.

At Lynchburg-based Scott Insurance (No. 22 on the Large Employers list), employees referring successful sales candidates receive $5,000 and are entered in a drawing to win a $30,000 car. The drawing occurs every two years.

At the IT services firm Concept Plus LLC in Fairfax (No. 58 among Small Employers), you get not only a bonus for a successful referral — up to $3,000 based on the position being filled — but also an iPad.

A number of other companies offer around $1,000 for a successful recruit.

If you want to make an employee smile, just say “bonus.” Many companies are big — and sometimes really big — on bonuses.

At the Consumer Technology Association in Arlington, all full-time employees are eligible for bonuses.

Junior staff can receive bonuses equal to 10 percent of their base salaries; at the director level, it’s 15 percent; and for vice presidents and above, 20 percent.

Employees in the sales department are eligible for commissions as well as the bonuses.

VPs and above are eligible for a deferred compensation retirement plan and a TV in their office.

Independent Container Line Ltd. (No. 10, Small Employers), has a profit participation bonus funded by 2 percent of company profits. Bonuses are distributed shortly after close of the fiscal year.

The Ashburn-based consulting company Infinitive (No. 56, Small Employers) has a “Be Great Bonus Program” based on performance. Nonexecutive employees generally receive 8 to 12 percent of salary, according to Infinitive.

Chantilly engineering firm Ingenicom Inc. (No. 9, Small Employers) awards spot bonuses to employees whose performance or support is praised by customers.

If you are a sales employee at Carfax, a vehicle history information company in Centreville (No. 19, Large Employers), you can earn commissions, annual bonus and special contest incentives including gift cards, vacation holidays, TVs and computers. A few can win new cars.

Healthy habits pay at Bon Secours Virginia, a Richmond-based health system (No 23, Large Employers).

Employees on a Bon Secours medical plan are eligible to earn $900 by completing health/well-being requirements. The money is deposited in health reimbursement accounts as it is earned.

At Fairfax-based consulting company ATSG Corp. (No. 54, Small Employers), stellar employees can earn cash bonuses and have their names emblazoned on the “Crystal Award.” Top employees can earn trips to go along with their bonuses.

At Aerotek, a staffing company in Virginia Beach (No. 15, Large Employers), high producers can pack the suntan lotion and sunglasses for a vacation in Cancun or Miami.

Higher Logic, a technology firm in Arlington (No. 26, Small Employers), offers sales team members who meet their quotas and reach other goals an expense-paid trip to the Caribbean with the executive team.

For those not in sales, the company raffles off additional spaces for the trip.

MassMutual Commonwealth, a financial services firm in Virginia Beach (No. 24, Small Employers), sales associates can qualify for up to five company trips. One recent excursion was a golf trip to the Pinehurst resort in North Carolina.

At HumanGeo, an Arlington-based technology firm (No. 5, Midsize Employers), all employees meeting outstanding performance standards are eligible to win a weekend at a condominium in Stuart, Fla.

At Defense Point Security LLC, a technology company in Northern Virginia (No. 2, Midsize Employers), top producers can qualify for a “president’s weekend” at a local resort. There are bonuses, too, including $10,000 for the top employee of the year.

Doing a good job can be its own reward. But for employees who can qualify for bonuses, trips or a fistful of cash, it’s just a little sweeter.

Supermarket supremacy

Want a grocery store with a restaurant and a wine bar — got it, at least at some Wegmans.

Want someone to carry groceries to your car — got it, at newly arriving Publix stores.

Want a small, no-frills, dash-in kind of store — got it, at stores such as Lidl and Aldi.

New grocery brands and variations on old brands are moving like a wave across much of Virginia.

There are so many players that it’s getting hard to keep them straight. Some of the newcomers: Aldi, Lidl and Publix.  Wegmans also is entering new markets.

As for the tried and true:  there’s Wal-Mart, Kroger and Kroger Market Place, Whole Foods, Food Lion, Trader Joe’s, The Fresh Market and independents.

In other words, a lot of stores are vying for the grocery dollar, although not necessarily for the same customers. Some of the higher-end stores are purposely targeting high-income areas. Whatever the demographic, activity is robust, with grocery stores becoming the go-to anchor for new mixed-use developments.

The Richmond region is ground zero for much of the activity. Jeff Metzger, publisher of Food World, a trade publication that follows the supermarket industry in the mid-Atlantic, says Richmond will be the only place in the country where Wegmans and Publix will compete head-to-head, although Raleigh, N.C., will face that scenario in a couple of years.

‘Very competitive’
So, why is the grocery store sector so hot?

Connie Nielsen, a senior vice president and veteran retail broker with Richmond-based Cushman & Wakefield|Thalhimer, says, “I don’t know that it’s necessarily a war,” but it is competitive. “Very competitive.”

The Richmond market got a jolt in July when Florida-based Publix announced it was buying 10 store locations from Martin’s. The fate of Martin’s nine other stores that were not part of the Publix sale remains uncertain, although the grocer has indicated that it does not plan to stick around if a buyer or buyers cannot be found.

The store sales were necessary to satisfy federal regulators so that the Dutch retailer Royal Ahold NV, which operates Martin’s, can combine with the Belgian Delhaize Group, which owns Food Lion and Hannaford.

Nielsen brokered the deal for Wegmans, one of the best known high-end grocery brands, and found two sites in Richmond. Wegmans has one of the largest average footprints in the industry with some stores ranging to 140,000 square feet or more.

According to Nielsen, every grocer is looking for the niche location that best suits its brand, traffic requirements, customer base and operating style. In Richmond, Wegmans located in two of the highest income ZIP codes in the region. 

One Wegmans opened in Chesterfield County’s Midlothian area, which has an average annual household income of $122,000 within a three-mile radius, according to Nielsen.

The other Wegmans is in Henrico County’s Short Pump area where the annual household income averages $124,000. Those figures compare with the median income for the Richmond metro area of $60,713, according to the Census Bureau’s latest annual American Community survey.

The Publix push
Meanwhile, Publix has aggressive expansion plans for Virginia. Opening soon will be a 50,000-square-foot store in Nuckols Place in Henrico County. This will be Publix’s first store in the region, and it is the anchor tenant in the 90,000-square-foot development.

The growth of Publix in Richmond is part of its ongoing rollout of stores in the Southeast, and future announcements about other store locations in Virginia will be forthcoming, says spokeswoman Kim Reynolds. 

“What we hang our hat on is providing premier customer service.  We try to treat our customers like ‘kings and queens,’” she says, employing a phrase often used by Publix’s founder.

According to Reynolds, customers can expect to be offered complimentary carryout of their bags to their cars and to be recognized by store associates when they arrive for shopping.

“We’re the largest employee-owned supermarket in the nation. Our associates are company owners, and they realize that how they do their jobs every day affects them and their families. It’s motivation to go above and beyond,” Reynolds says.

Lidl and Aldi
On the other end of the spectrum, discount grocer Lidl is developing a $125 million regional headquarters and distribution center in Spotsylvania County, and Aldi has announced plans for building a $57 million distribution center and division headquarters in Dinwiddie County. Lidl and Aldi, both based in Germany, are fierce competitors in Europe.

Aldi has 32 stores in Virginia and plans to have 60 by 2021. A spokesman for Lidl says its first U.S. stores will be open no later than 2018. “To date in Virginia, we have announced two facilities and at least 700 jobs — our U.S. headquarters in Arlington County as well as a regional headquarters and distribution center in Spotsylvania County.  Our announced investment in these two facilities is more than $200 million,” says Lidl spokesman William Harwood.

Lidl is expanding into Virginia, he adds, because the company thinks it will be a great option for shoppers. It currently operates 10,000 stores in 27 countries.

Northern Virginia’s allure
In Northern Virginia, Greg Ferrante, a real estate and development executive with JLL (formerly Jones Lang LaSalle), says the grocery market is on fire with Wegmans, Whole Foods, Lidl and the anticipated arrival of Publix, which is eyeing the region as a potential market.

Ferrante noted that many retailers are continuing to converge on the Northern Virginia-D.C. area because of its disproportionate number of high-income residents.

The three richest counties in America are all in the Virginia suburbs near D.C., according to Census Bureau data. Falls Church — an independent city that the Census counts as a county — leads the pack, with a median household income of $125,635, followed by Loudoun and Fairfax counties. 

Yet even with all that wealth, Ferrante says there may not be enough business to sustain every grocer that wants a share of the market. “I think there are a lot of grocery stores that will go out of business, the weaker ones. They’re squeezing a balloon. They’re going to be stealing from each other,” Ferrante says.

Whenever a well-known grocery brand comes into a community, that move can have repercussions far beyond its geographic boundaries, Ferrante adds.  For instance, he pointed to the recent opening of a Wegmans in Charlottesville. “By locating in the Charlottesville market, it will draw from 30 miles,” he says, and could impact other grocers and shopping trends throughout the region.

Ready-made items
Tom Dunn, a JLL vice president of retail brokerage based in Hampton Roads, says that one of the biggest trends he’s seeing in the grocery store market has been in response to customers wanting to have ready-made items that they can carry from the store to the dinner table.

“Gone are the days of people walking to a grocery store and planning their meals. More people are eating out more, and grocery stores are changing their model to a larger selection of fast foods” including natural foods, Dunn says.

Last year was the first time that restaurant sales outpaced grocery sales in the U.S., he adds, in part because millennials are reshaping shopping patterns to fit their fast-paced lifestyles. “It’s a cultural shift in buying patterns,” Dunn says.

Dunn, who splits his time between Hampton Roads and Richmond, has only exclamation points to describe what he’s seeing in the grocery market. “I’ve never seen the level of activity that we’re seeing now. A plethora of players has landed. It’s pretty unprecedented.”

When a major grocer can’t find the space it wants, it creates its own space, Dunn says, pointing to what Kroger did in Hampton Roads when it purchased an existing shopping center and reshaped it to accommodate a sprawling 125,000-square-foot Kroger Marketplace.

Susan Jones, a senior vice president with Colliers International in Richmond and director of its retail brokerage, says Aldi did something similar in Richmond on a much smaller scale. Last year, the company acquired a former steak house and remodeled it for the first of what will be four locations in the Richmond area. Aldi recently announced that it would also build on a former church site in Virginia Beach. “As more and more grocers enter the market, sites have been harder to find. You have to get creative and still be right with your demographics” Jones says.

For commercial brokers, Jones says, the arrival of new grocers is more than welcome. “It’s money in the bank with new players, if we can find good sites and put developers and grocers together,” she says.

Metzger of Food World says that, like Richmond, nearly every metro area in the country is “overstored,” as saturated markets are strained even further. In Richmond, he believes Food Lion is particularly vulnerable.

His prediction for the future of the grocery store market over the next five years: “Nationally and in Richmond, there will be a thinning out of the herd.”