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Making an impact

Virginia Business’ 2023 Virginia CFO of the Year award winners represent large and small businesses and large and small nonprofits. 

Small nonprofit | Clyde Cornett, Executive vice president and CFO
Virginia Community Capital Inc., Richmond

Richmond-based Virginia Community Capital Inc. was a $15 million organization when Clyde Cornett joined as chief financial officer in 2008. Now, it’s grown into a community development financial institution with $559 million in total assets under management.

A CDFI can include regulated institutions such as banks and credit unions or nonregulated ones like private equity funds. Founded in 2006 and seeded with $15 million in seed capital from the state government, VCC provides credit and financial services for underserved populations, and it finances projects aimed at benefiting the community ranging from solar energy, food access to affordable housing.

Since its inception, VCC has helped to finance projects that have created or retained more than 14,000 jobs and established more than 12,000 affordable housing units. In 2022, Cornett helped secure more than $36 million in equity from the U.S. Treasury’s Emergency Capital Investment Program for VCC’s mission-focused community development bank.

“We operate with the idea that we want to balance the social impact with financial sustainability,” Cornett explains. “Some folks will go on that journey with us, but some people immediately [focus on the] financial return conversation because they think of banks as being purely profit-driven financial organizations. Having the opportunity to secure that capital was a pretty big deal for us.”

Nevertheless, raising deposits for the bank is still top of mind for Cornett so the bank can continue making loans for affordable housing projects or to underserved small businesses, he says.

“They can’t afford these rate increases. With funding costs being what they are, some projects are just getting stalled as a result,” he explains. “So, one of my biggest priorities is to really help figure out ways to raise deposits less expensively and figure out how to fund all these projects that really need it.”

With a passion for community development work, Cornett, who is based in Christiansburg, also dedicates his time to causes in Southwest Virginia, where he grew up in the Appalachian former coal town of St. Paul. He is a founding director of Appalachian Community Capital (ACC) and has served on its board for a decade, supporting CDFIs in the ACC’s service region, which extends from New York to Mississippi.

Also under the umbrella of community development work, VCC in 2017 launched LOCUS Impact Investing, an investment advisory services group that helps philanthropic organizations invest in their communities. Cornett also helped to develop the nation’s first community investment guarantee pool, another financing tool for affordable housing projects, small businesses and climate-related lending.

Starting out as an accountant, Cornett would once have described his leadership style as directive — solely focused on deadlines and deliverables. As a business administration and accounting graduate from the University of Virginia’s College at Wise, Cornett previously served as a senior manager with Greenville, South Carolina-based accounting and consulting firm Elliott Davis.

But his work in community development has led him to appreciate partnerships, teamwork and collaboration, he says. In fact, some of the team members he brought on a decade ago when he started with VCC still work with him today.

“I built the team from scratch — they’re awesome,” he says. “I’m trying to support them in clearing hurdles in the organization and really trying to encourage them to step into their own leadership.”  

Read more about Virginia Business’ 2023 Virginia CFO of the Year award winners: 

RELATED STORY: 2023 CFO trends — talent shortages and AI

Fate in finances

Virginia Business’ 2023 Virginia CFO of the Year award winners represent large and small businesses and large and small nonprofits.

Large Nonprofit | Jim Barker, chief financial officer
Delta Dental of Virginia, Roanoke

Some might call Jim Barker’s journey to becoming chief financial officer of Roanoke County-based Delta Dental of Virginia kismet.

Barker grew up the youngest of seven children in Bristol, Virginia. His father died unexpectedly when Barker was 2, and Barker’s mother took a janitorial job with the local school system to provide for her family.

To ensure he was cared for in the afternoons, his mother enrolled Barker at the local Boys & Girls Clubs, a nonprofit organization that provides homework assistance and after-school activities for kids ages 5 to 18. Growing up “not in the best of neighborhoods,” he says, “it was good to have a good place to go.”

He couldn’t know he was forging a connection that would lead him to the executive position he’s held for the past 20 years.

After earning a bachelor’s degree in accounting and an MBA from Virginia Tech, Barker worked as a senior manager with Big Four accounting firm KPMG in Roanoke. When he moved there, he found out it was the largest city east of the Mississippi River not to have a Boys & Girls Clubs chapter. Delta Dental of Virginia’s then-CFO, Michael Wise, invited Barker to join a board that was in the process of starting the Boys & Girls Clubs of Southwest Virginia, which now has 11 locations from Roanoke to Christiansburg.

As he got to know Wise, Barker learned more about Delta Dental of Virginia and its philanthropic efforts like Smart Smiles, a program providing dental care to children from low-income families.

Barker joined Delta Dental of Virginia as corporate controller in 2003, working his way up to vice president of accounting before being named CFO in 2015. Delta Dental of Virginia is a member company of the Delta Dental Plans Association, which provides dental coverage to more than 83 million people nationwide. Employing about 330 people, Delta Dental of Virginia reported $765 million in 2022 revenue.

As one of the longest serving board members of the Boys & Girls Clubs of Southwest Virginia, Barker has also helped maintain deep ties between Delta Dental of Virginia and Boys & Girls Clubs. For example, he helps fundraise for the annual Delta Dental Pro-Am for Kids charity golf tournament, which has raised more than $2.1 million for the Boys & Girls Clubs of Southwest Virginia. Wise, who died last year, helped Barker establish a college scholarship fund for local Boys & Girls Clubs teens. Named for Barker, the scholarship fund has so far raised about $350,000 of its $1 million goal.

Since the very beginning, Barker has found Delta Dental to be like a “big family,” he says. “If you know somebody and you know they care about you — and you care back — you’ll work a lot harder for them.”

While it could be a challenge to move from a major accounting firm to a smaller nonprofit, Barker brings the same mentality of focusing on efficiency and competitiveness. “We have the adage, ‘No margin, no mission,’” he says. “If we don’t make a margin, we don’t support our mission of foundational oral health. But at the same time, I think that our biggest asset … [is our] people.”

One of Barker’s main focuses has been on diversifying Delta Dental of Virginia’s offerings. It used to sell only dental insurance, but the organization expanded into vision coverage in 2020, and in 2021 began licensing proprietary software to other Delta Dental member companies.

“We were a one-trick pony, so to speak,” Barker says. “I’ve been fortunate enough to have some wonderful leadership and mentors ahead of me, and I want to leave this organization on a strong footing as well. That’s with certainly adequate financial reserves and stability, but also already being on a glide path to long-term diversification.”

Read more about Virginia Business’ 2023 Virginia CFO of the Year award winners: 

RELATED STORY: 2023 CFO trends — talent shortages and AI

Leading by example

Virginia Business’ 2023 Virginia CFO of the Year award winners represent large and small businesses and large and small nonprofits. 

Large business | Cindy Yao, CFO and executive vice president
Markel Food Group, Richmond

A while back, Cindy Yao and the other executives at Richmond-based Markel Food Group underwent a 360-degree feedback exercise. Yao, the company’s chief financial officer and executive vice president for the past decade, found that she was viewed as the company’s heart.

“People come to me to solve problems and when they feel they need help, and when someone … needs a caring person there to help them grow,” says Yao, who’s known for putting together gift baskets for employees and their family members who are going through tough times.

An independent subsidiary of Henrico County Fortune 500 insurance holding company Markel Group Inc., Markel Food Group is a $350 million company with about 1,000 employees worldwide. It provides automated industrial equipment and consulting services to food processing companies.

Markel Food Group, Yao explains, is the parent of three “pretty much autonomous companies” — AMF Bakery Systems, Reading Bakery Systems, and Solbern. In addition to being the parent company’s CFO, Yao serves as CEO for Reading, Solbern and AMF Bakery Systems’ AMF China division. “I bring them structure and I helped them to be more organized [in] thinking about strategy,” Yao says.

Born in Shanghai, China, and fluent in the Mandarin, Cantonese and Shanghai dialects, Yao has overseen over the past two years a doubling of revenue and profits of the company’s business in China, where it’s aiming to become the leading supplier of industrial bakery equipment.

Yao earned her MBA from the William E. Simon School of Business Administration at the University of Rochester, her master’s degree in accountancy from Virginia Tech and her bachelor’s degree in English literature from East China Normal University.

Before joining Markel, Yao served for almost a decade in executive finance positions with eye care company Bausch + Lomb.

In 2019, she received the Corporate Leadership Award from NaisA Global, a nonprofit organization that connects and provides mentorship to future Asian business leaders.

At Markel Food Group, Yao has implemented structural changes, including designing its governance structure. She also oversees Markel Business System, the framework that governs the company’s strategies for operations, staff and growth.

“Rolling out the system, you change the culture, you create a collaboration among the companies,” Yao explains. “We have a very systematic way to look at growth, look at the costs and look at people engagement.”

Additionally, she serves as dean for Markel Business Systems Leadership University, an internal executive leadership development program she founded.

It all speaks to her support and passion for mentoring “high potential” younger workers. 

“To be a good manager, you have to care about people. You truly have a goal to have an impact on somebody’s life and career,” she says. “Your goal is to help people grow and to improve their life.”

Yao also serves as a mentor to MBA students at the University of Richmond, where she has led discussions about course material, reviewed résumés and offered job advice. And she volunteers with the VCU Massey Cancer Center and joined its advisory board in May.

“I look forward to contributing to the community,” Yao says. “We all do better when our community does better.”  

Read more about Virginia Business’ 2023 Virginia CFO of the Year award winners: 

RELATED STORY: 2023 CFO trends — talent shortages and AI

More than bean counters

Chief financial officers have long been tasked with managing the fiscal responsibilities of companies — everything from financial planning to tracking cash flow. But increasingly, other C-suite executives and board members are relying on these finance experts for strategic and operational leadership.

In fact, an April 2022 report from global consulting firm McKinsey & Co. shows that the share of jobs reporting to CFOs continues to increase. This includes roles that would typically report to a CFO or controller — such as employees specializing in procurement, mergers and acquisitions, and investor relations. But now, cybersecurity, tech and risk management jobs are also likely to report to CFOs.

CFOs at Virginia-based companies and organizations are certainly experiencing this trend.

“I don’t think CFOs just sit in the corner silently waiting to say the word ‘budget,’ like was the case 20 years ago,” says Don Halliwill, CFO and executive vice president for the Roanoke-based Carilion Clinic health system. “We’re a lot more involved on the operational side.”

Particularly as a nonprofit, Carilion has to be focused on planning for future financial needs — looking ahead as far as 20 years down the road, Halliwill says. It also has to be focused on reinvesting income into new facilities, one example being Carilion’s 2021 $50 million renovation of a 150,000-square-foot JCPenney store at Tanglewood Mall into a children’s pediatric medicine center.

“So how has my role changed?” Halliwill questions. “Well, instead of just thinking in the box, leadership is thinking about how we can meet the capital needs of the organization. We’d never done that before.”

CFOs also have been tasked with tracking ESG — environmental, social and corporate governance efforts, says Stephanie Peters, president and CEO of the Virginia Society of CPAs, a professional organization representing about 13,000 certified public accountants in Virginia. “It’s many of the CPAs and the accounting departments that are responsible for tracking different elements of ESG and reporting on how that company is doing,” Peters explains.

While CFOs now may be expected to participate in a more expanded role, being tasked with more operational and strategic roles makes sense in context of their roles, says Clyde Cornett, CFO and executive vice president of Richmond-based community development financial institution Virginia Community Capital.

Delta Dental of Virginia has begun using AI tools to assist with operations and accounting, including processing accounts payable reports, says the company’s CFO, Jim Barker. Photo by Don Petersen

“We’ve always been expected to play a role for the CEO and the board as [a] consultant adviser working on strategy,” he says. “But more and more I’m finding that I’m being asked to play that role with the business lines as well as a little bit deeper in the organization, which I think is good. I think most CFOs are natural problem solvers.”

But while some CFOs may be comfortable with their expanded roles and expectations, there are new challenges and trends facing corporate finance and accounting jobs, namely the growing talent gap for CPAs and the implementation of artificial intelligence and other new technologies.

Talent gap

In 2019, the accounting industry peaked in terms of the number of employed accountants and auditors, according to the Controllers Council, a professional organization that provides educational resources and programming for controllers, CFOs, accountants and auditors.

But ever since its peak, the number of employed accountants and auditors has dropped a staggering 17%, according to a Bloomberg Tax analysis. Meanwhile, U.S. Bureau of Labor Statistics projections show that there will be more than 136,000 open accounting and auditing positions each year until 2031.

“Staffing talent is still the No. 1 concern. … CPA firms, as well as finance departments on the corporate side, are all feeling the strain of needing talent,” Peters confirms. Some of the major challenges in recruiting for and retaining accounting talent include barriers to entry such as the extra credit hours required to become a CPA — a bachelor’s degree typically requires 120 credit hours, but to qualify for CPA certification, candidates need 150 credit hours.

“Talent is hard to find,” says Jim Barker, CFO of Roanoke-based dental care insurer Delta Dental of Virginia. “When you find that, you don’t want to let it go.”

Securing talent can also be especially challenging for nonprofits, which often can’t afford to match the higher salaries or better benefits of large corporations that hire CPAs. The median salary for accountants and auditors is about $77,000, according to the U.S. Bureau of Labor Statistics, but CPAs who work for large companies like McLean-based Capital One Financial Corp. can make over $100,000, according to Glassdoor.

“It’s a really competitive market right now and it is very hard,” Cornett says. “Even just in Virginia, it’s very hard for us to compete for finance talent with somebody like Capital One just right down the street because they have more resources.”

But something else might shake up the talent gap and even further alter the role of CFOs, CPAs and accountants: the implementation of artificial intelligence and other technologies in accounting practices.

Accounting for AI

Many entry-level or early-career accounting jobs focus on accounts receivable and accounts payable functions, which are focused on outstanding bills and invoices for the company. These processes, however, are largely repetitive and are therefore vulnerable to takeover by artificial intelligence or other automated technologies, CFOs agree.

Richmond-based Markel Food Group, which provides automated food equipment and consulting services to food processing companies, hasn’t yet implemented AI for these tasks, but the company’s CFO and executive vice president, Cindy Yao, is definitely taking note. Eventually, she says, “some of the more routine or repetitive work probably will be pretty much taken over by bots or other types of automation capabilities.”

Delta Dental of Virginia has already started using AI tools to help with operations and accounting, including processing accounts payable reports, Barker says. “They sound small, but those are some pretty high-volume transactions that are just sort of nuisances, and we can have people doing something a little bit higher level that they may enjoy more,” Barker says.

Other finance executives have used AI to save time by drafting emails and correspondence and even performance review templates, Peters says.

And with more CFOs taking on leadership for company tech needs ranging from IT to cybersecurity, financial chiefs are faced with the challenge of figuring out whether to invest in emerging technologies like AI, Halliwill says.

“It’s become more difficult from a financial perspective as the CFO to determine the right timing for investing in technology,” he says. “You invest in something, and by the time you get it implemented and paid for, there’s the next generation. But you can’t wait forever and not make any investments.”

There has also been concern that AI implementation in accounting and finance positions is also contributing to the talent gap in finance departments. Some college students may already be choosing different career paths out of fear that accounting jobs are vulnerable to being taken over by AI.

But college students also are hearing horror stories from current finance workers about heavy workloads and little to no work-life balance, and Peters is hopeful that AI may provide some help by automating rote tasks.

“These types of technologies can alleviate that and start to change the narrative and say, ‘Wow, we’re using tools that make grunt work go much faster,’” Peters says. “‘Now we can learn and do higher-value types of services and not be there so long … and have a life.’”

As technology plays a growing role in the workforce, Barker says, a focus on mental health, work-life balance and adapting to hybrid or remote work will be critical in gaining and retaining accounting talent in corporate finance departments.

Mental health “is our biggest challenge right now,” Barker says of finance departments. “The challenge is connecting or reconnecting with others — our teams,
customers, new team members, etc. — in this ‘new norm’ of hybrid and remote workforce. The mental health aspect is definitely real and dangerous because the potential harm is not overt.” 

Read about Virginia Business’ 2023 Virginia CFO of the Year award winners: 

Large business | Cindy Yao, executive vice president and CFO, Markel Food Group

Small business | Jason Chesky, CFO, Logenix International LLC

Small nonprofit | Clyde Cornett, CFO, Virginia Community Capital

Large nonprofit | Jim Barker, CFO, Delta Dental of Virginia

Paying it forward

Virginia Business’ 2023 Virginia CFO of the Year award winners represent large and small businesses and large and small nonprofits.

Small business | Jason Chesky, CFO
Logenix International, Fairfax County

Jason Chesky, chief financial officer at Fairfax County-based Logenix International, took a nontraditional route to corporate financial leadership and working in logistics.

Starting out at Catawba College in Salisbury, North Carolina, Chesky played on an NCAA Division II lacrosse team and had intended to study sports medicine. But he wound up transferring to Northern Virginia Community College, where he decided to focus on business studies, which he thought would open up more career opporunities.

During his time in community college, Chesky also worked full time in corporate real estate and as an accountant for Long & Foster.

After earning his associate degree in business administration from NOVA, he transferred to George Mason University, from which he graduated with a bachelor’s degree in finance in 2012.

About a decade ago, he joined Logenix as its finance director and in July 2021 was named CFO of the company, which employs 35 people in the United States and more than 200 worldwide and saw annual revenues exceeding $100 million in 2022. He also oversees the company’s human resources, legal matters and risk management, as well as information technology. And he’s in charge of the company’s nine international offices, which stretch from London and Amsterdam to the United Arab Emirates and India.

Thankful to his alma mater for his success, he now gives back through the Jason M. Chesky Scholarship Endowment, which provides financial assistance for GMU School of Business students “so others can have the opportunity to create a career path like I did,” he says.

Starting in 2021, Chesky began committing $50,000 each year to his eponymous endowment fund, which is disbursed among students selected by the business school who meet academic requirements.

“Knowing the cost of higher education has always been a rising burden, providing … financial assistance should help keep students more focused on their education than having to make ends meet with other obligations,” adds Chesky, who knows about being busy. Being the CFO of a business with offices and business across the globe is “no simple task,” Chesky says.

Especially since the pandemic, Chesky has been focused on supply chain disruptions. New routes were forged, some were terminated, some were altered.

“It’s just not the same economy as it was before COVID-19 introduced itself to the world,” Chesky says. “Being in the logistics industry with a heavy focus in global health, development, disaster relief and contingency, we have seen the change in shipping and supply chains firsthand. I have been more involved with our overseas offices and their growth of operations — where we saw the change.”

Since becoming CFO, Chesky has overseen the addition of a handful of new international offices.

“These are the gears of the wheel that keep the business turning. One failure in any of those could lead to a disruptive business situation,” Chesky says. “It is always my job to keep a pulse on the company to know where my focus needs to be addressed.”

Despite his varying priorities, Chesky describes himself as a participative and transformational leader who leads by example. He invites employees to communicate freely, knowing that they will be recognized for their contributions and efforts, he says.

“Another aspect of being a transformational leader is not issuing penalties for falling short,” he says. “I prefer to take the approach by assisting individuals to grow personally and in their career.”

Read more about Virginia Business’ 2023 Virginia CFO of the Year award winners: 

RELATED STORY: 2023 CFO trends — talent shortages and AI

 

Wonder women

At an early June networking reception to celebrate this year’s Virginia Business Women in Leadership Awards winners, many in attendance pointed out how unusual it was for dozens of women executives from across various industries to join together in the same room.

Held at law firm Troutman Pepper Hamilton Sanders LLP’s Richmond office, the event brought together more than 20 of this year’s cohort of 37 Women in Leadership honorees to meet and forge professional connections. The reception’s uniqueness highlights how hard many women executives have worked to succeed and rise to the top of historically male-dominated industries, continuing to climb corporate ladders and break C-suite glass ceilings even today.

This impressive third annual cohort of awardees was chosen by our editors from a competitive field, with more than 320 nominations submitted this year. To qualify, nominees must be based in Virginia and hold C-suite or equivalent positions at their organizations. Deciding this year’s list, Virginia Business’ editorial staff considered factors such as overall professional accomplishments, civic engagement, mentoring and breaking glass ceilings. Our winners are divided by their organizations’ workforce size: small employers with 99 or fewer employees; midsize employers of 100 to 499 people; and large employers with 500 or more workers. Past winners were not eligible for consideration.

Congratulations to this year’s group of accomplished and talented leaders!

LARGE EMPLOYER

ELAINE BEEMAN
Chief leadership officer and civilian portfolio lead, Accenture Federal Services, Arlington

AMY CARRIER
President and CEO, Centra Health, Lynchburg

DEB DAVIS
Vice president and general manager of Mission Solutions Sector, General Dynamics Information Technology, Falls Church

JENNIFER DeBRUHL
Director, Virginia Department of Rail and Public Transportation, Richmond

LIZA WILSON DURANT
Associate provost for strategic initiatives and community engagement and professor, College of Engineering and Computing, George Mason University; Director, Commonwealth Cyber Initiative Northern Virginia Node, Arlington

ELENA EDWARDS
Chief markets officer and regional CEO for North America, Allianz Partners Group, Henrico County

CASSIE HARTOGS
Tax regional managing partner, BDO USA, McLean

GHADA IJAM
Chief information officer, Federal Reserve Bank of Richmond, Richmond

JOANNE INMAN
President, Sentara Leigh Hospital, Norfolk

DR. MELINA R. KIBBE
Dean, University of Virginia School of Medicine; Chief health affairs officer, UVA Health; Professor, Departments of Surgery and Biomedical Engineering, University of Virginia, Charlottesville

AISHA McGILL
Chief business officer, Koniag Government Services, Chantilly

MELANIE McGRATH
Submarine division director, Newport News Shipbuilding, Newport News

DOLLY OBEROI
Founder and CEO, C2 Technologies Inc., McLean

CAROLYN RAINEY
Charlottesville president, Bank of America, Charlottesville

TIFFANY RAY
Vice president of student services and equity advancement, Germanna Community College, Fredericksburg 

MAGGIE REED
Vice president and business unit leader, Gilbane Building Co., Richmond 


MIDSIZED EMPLOYER

KIMBERLY CHRISTNER
President and CEO, Cornerstone Hospitality LLC, Williamsburg

ALICE P. FRAZIER
President and CEO, Potomac Bancshares Inc. and Bank of Charles Town, Leesburg

COURTNEY MOATES PAULK
President, Hirschler, Richmond

SUSAN R. RALSTON
Chief operating officer and executive vice president, Old Point National Bank, Hampton

KELLY TILL
President and publisher, Richmond Times-Dispatch; Regional vice president of sales, Lee Enterprises Virginia, Richmond

DR. DIXIE TOOKE-RAWLINS
President and provost, Edward Via Virginia College of Osteopathic Medicine, Blacksburg 

MURPHY TUOMEY
Chief administrative officer, senior vice president, board member, A. Morton Thomas and Associates Inc., Richmond and Staunton

AUTUMN R. VISSER
Principal, Woods Rogers Vandeventer Black PLC, Roanoke


SMALL EMPLOYER

ERIN BURCHAM
President, Verge; executive director, Roanoke-Blacksburg Technology Council, Roanoke 

MELINA DAVIS
CEO and executive vice president, Medical Society of Virginia, Richmond

BETSY FRANTZ
President and CEO, PathForward Inc., Arlington 

REBECCA GELLER
President and CEO, The Geller Law Group, Fairfax

LINDA HUTSON GREEN
Vice president of economic development, Institute for Advanced Learning and Research; Executive director, Southern Virginia Regional Alliance, Danville

GRETA J. HARRIS
President and CEO, Better Housing Coalition, Richmond

LAURA KOTTKAMP
Executive director, Monroe Park Foundations at Virginia Commonwealth University, Richmond 

RITA McCLENNY
President and CEO, Virginia Tourism Corp., Richmond

TERRIE L. SUIT
CEO, Virginia Realtors, Glen Allen

MY LAN TRAN
Executive director, Virginia Asian Chamber of Commerce, Ashland

LUCIA ANNA “PIA” TRIGIANI
Partner and co-founder, MercerTrigiani, Alexandria

LORI COLLIER WARAN
President, Richmond Raceway, Richmond

CHRYSSA ZIZOS
Founder and CEO, Live Wire Strategic Communications LLC, Arlington


Check out the 2022 and 2021 Women in Leadership winners.

Small yet mighty

Way back when, Roanoke was a train city — the headquarters for Norfolk and Western Railway and a late-1800s hub for the Shenandoah Valley Railroad.

The scenic mountain community, however, has grown into a bustling region with a variety of successful industries, including one standout: health care. With the formation of Virginia Tech Carilion School of Medicine (VTCSOM), the product of a public-private partnership between the university and the nonprofit Carilion Clinic health system, Roanoke has become a hotspot for medical talent, research and development.

What was once just a brownfield a little south of the city center is now home to VTCSOM, a medical research institute and clinical facilities. In fact, VTCSOM is considered one of the major “success stories” from a brownfield grants program run by the Environmental Protection Agency. In 2008, the city of Roanoke received a $200,000 grant to clean up the scrapyards around South Jefferson where the medical school and Carilion Clinic hub stands today.   

“When the people who formed the [Virginia Tech Carilion] partnership envisioned building assets that would be shared between Virginia Tech and Carilion here in Roanoke, including a research institute at a medical school, they really were thinking about transforming Roanoke from a … ‘train city’ to a ‘brain city,’” explains Dr. Lee A. Learman, the medical school’s dean since 2019.

The small medical school, which graduated its 10th class of doctors in May, has become one of the country’s most competitive medical schools. It has the third lowest acceptance rate in the nation, according to College Evaluator. For the class of 2025, 6,405 prospective students applied to VTCSOM, and just 49 students were accepted — a 0.77% acceptance rate. By comparison, 6,914 people applied to Harvard Medical School for entrance in 2022, and 226 were admitted — a 3.3% acceptance rate.

VTC is also the most selective medical school in Virginia, compared with acceptance rates ranging from 0.85% at Eastern Virginia Medical School to 4.5% at the Virginia Commonwealth University School of Medicine. VTC is also the state’s smallest medical school; it began enrolling 49 students per year in 2020, after starting with classes of only 42 students.

Dr. Aubrey Knight, senior dean of student affairs at VTC, says that this small expansion doesn’t mean the school is any less competitive.

The growth in class size is “incremental, it’s relatively small,” he says. “We’re still a very small school. Going from 42 to 49 [students], I don’t think makes that much difference in the culture of the school or in the process for admitting students. The process for admissions is more about our reputation and the growing number of people that are applying and interested in the medical school.”

VTCSOM is “very much a clear and compelling partnership,” Carilion Clinic President and CEO Nancy Agee says. “Medical students, residents, fellows and faculty, all those are intricately linked.” Photo by Don Petersen
VTCSOM is “very much a clear and compelling partnership,” Carilion Clinic President and CEO Nancy Agee says. “Medical students, residents, fellows and faculty, all those are intricately linked.” Photo by Don Petersen

Symbiotic partnership

As its name makes clear, the Virginia Tech Carilion School of Medicine is a true partnership between the university and the regional health care system. In summer 2014, the medical school received full accreditation from the Liaison Committee on Medical Education and the Southern Association of Colleges and Schools Commission on Colleges, and on July 1, 2018, it officially became the ninth school
at Virginia Tech.

Roanoke-based Carilion Clinic operates a network of seven hospitals, as well as primary and specialty care practices serving nearly 1 million Virginians across the Roanoke and New River valleys as well as the Shenandoah Valley and Southwest Virginia. This robust network of physicians is what allowed Virginia Tech to establish its own medical school, says Nancy Agee, president and CEO of Carilion Clinic, which has grown into an almost $2 billion medical system over its nearly 125-year history.

“The school doesn’t exist without us. It’s very much a clear and compelling partnership,” she says. “Medical students, residents, fellows and faculty, all those are intricately linked.” Carilion Clinic physicians train medical school students; Virginia Tech does not employ the professors, she explains. This has been a symbiotic relationship — in that Carilion Clinic employs more than 1,000 physicians, up from the 600 the organization had when Agee became CEO in 2011.

Currently, there are 600 Carilion Clinic physicians who are also VTCSOM teaching faculty. These 600 physicians are paid exclusively by Carilion; however, the medical school has a total of 871 faculty, with the others having different employers and affiliations. Virginia Tech employs 78 faculty members.

“It’s been a sea change, frankly, and the School of Medicine has been a catalyst for it,” she says. “It was part of our plan at the beginning, so we’re achieving that vision.”

While Virginia Tech Carilion medical students don’t have guaranteed residency programs with Carilion Clinic, some end up “matching” with one of Carilion’s programs. Upon graduation from medical school, students across the country participate in a matching process in which prospects rank their top residency programs, and the medical programs do the same with the students. Medical grads typically match with a residency program, which can vary in specialty, length and location. For the VTC class of 2023, seven students matched with Carilion, and since 2014, 57 students have matched with the regional medical network.

Others, though, have matched with increasingly competitive programs, including Massachusetts General Hospital, Mayo Clinic School of Graduate Medical Education, and Ronald Reagan UCLA Medical Center. So far, VTC has had a 100% match rate for students pursuing residencies, which is somewhat rare, even at other highly regarded medical schools.

“The factor is more about our graduates performing well and opening the door for subsequent students,” Knight says. “We’ve always had very strong students. Other people are recognizing that to a greater degree.”

Sahana Nazeer, who graduated from VTC in June, will return to her hometown, Boston, for a child psychiatry residency program at Brigham and Women’s Hospital, consistently ranked as one of the nation’s best hospitals. Coming from Brown University, Nazeer wasn’t necessarily eager to move to Roanoke — a city mostly unknown to her — but it quickly felt like a place where she could build a community. With small class sizes, Nazeer says she felt comfortable approaching and working with her classmates.

“I feel like I walk away from medical school feeling like I’ve had an individual relationship with each person in my class,” she says. “I don’t know many med students that could really say that, too. I can 100% say, now, four years later, I’m going to miss Roanoke.”

That sense of community largely hinges on the school’s problem-based learning, in which small groups of students work through medical scenarios together, teaching each other how to be successful in practice.

Dr. Adam Tate, a 2018 VTC graduate, also found that having significant direct contact with faculty, medical residents and attending physicians made his medical school experience an “involved and immersive classroom and clinical learning environment,” he says. “I developed both amazing friendships and professional relationships from my time in the program.”

Research chops

Because VTC is so competitive, incoming students often have serious research chops.

“We really do want a student who has some experience in and can hit the ground running with research,” Knight says. “While we have a curriculum and we do teach them the basics of clinical research and biomedical research, we expect that they’ve had some experiences prior to coming, so that it’s not a shock.”

Virginia Tech Carilion students, staff and faculty note that the school’s focus on research is another factor that makes it unique when compared with other medical schools. That’s largely due to the Fralin Biomedical Research Institute at VTC, which was founded in 2010 and focuses on the study of diseases such as brain disorders, heart disease and cancer.

“Fralin does some very significant biomedical research, and students are very involved with Fralin and our faculty,” Agee says. “Something that we’ll continue to focus on is commercialization of research,” including redesigning medical products by using artificial intelligence and machine learning.

All medical students are expected to conduct weekslong “original, hypothesis-driven research” during their three-and-a-half-year medical school journeys. Plus, each student receives $1,000 per year for research supplies during years two through four. 

The outcomes have been impressive over the past decade: More than 100 students have published their research, and nearly 400 have presented their findings at regional, national or international conferences. In March, VTCSOM hosted its Medical Student Research Symposium, highlighting student research.

VTCSOM’s focus on research is very different from old-school medical training, Learman explains. Many medical schools have academic departments focused on different disciplines, including physiology, biochemistry and anatomy, and were built out with large faculties lecturing students.

“It’s hard when you’re a student learning abstract knowledge and principles to not understand how those get applied in actual patient care,” Learman says. “Our students finish with a research certificate. When they get to residency, they’re far more facile with how to implement knowledge to impact clinical decision-making as a result of these research requirements they’ve been able to fulfill over the four-year curriculum.”

“We both loved being here during school and made many important connections,” says Dr. Adam Tate, who practices at Carilion with his wife and fellow VTSCOM graduate Dr. Megan Witham. Photos by Don Petersen
“We both loved being here during school and made many important connections,” says Dr. Adam Tate, who practices at Carilion with his wife and fellow VTSCOM graduate Dr. Megan Witham. Photos by Don Petersen

Return to Roanoke

Roanoke may not always be the first place VTC graduates practice medicine, but it’s often a final destination. Both Tate and his wife, VTC alum Dr. Megan Whitham, pursued residencies elsewhere before returning to Roanoke to work at Carilion Clinic.

Whitham works in maternal fetal medicine, while Tate practices family medicine. Originally from Carroll County, Tate was “psyched” to get to study medicine near home and Southwest Virginia’s Appalachian Mountains, a region negatively affected by a shortage of doctors.

“We both loved being here during school and made many important connections, which contributed to our desire to move back once we were finished with residency and fellowship training,” Tate says. Plus, Whitham notes, Roanoke was “an exciting place for us to come back to because it has been developing quickly, and there is a growing young professional community that is so welcoming in this area.”

About 25% of VTC students stay in Virginia for their residencies, Learman says, and of the 408 students who have graduated from the medical school so far, he anticipates about 100 of them will come back to the state to practice.

“We’re also happy that we can create a net increase in the Virginia workforce by attracting people from outside of Virginia who fall in love with this region and may go away temporarily to do residency but come back ultimately to live and to work,” Learman says.

Incremental growth is what’s next for the school, officials say. This will include the construction of more medical training space and the small increase in the number of new students at VTC to 49 in 2024.

Architectural planning for the future building hasn’t begun yet, and timelines aren’t mapped out, but officials envision the new construction to more than double the size of the current 51,000-square-foot facility, a VTCSOM spokesperson says. While a target class size hasn’t yet been determined, the expansion could allow the school to double in enrollment. However, the school would not enroll more than 100 students per class, “which would still be a small medical school by national standards,” the spokesperson adds. (The median medical school class size nationally is 140 students, with a range of 40 to 250, according to the Journal of the Association of American Medical Colleges.)

“The transformation of an industrial brownfield into a rapidly growing health science and technology campus over the past decade is a remarkable success story for the Roanoke-Blacksburg region and the commonwealth as a whole,” says Virginia Tech President Tim Sands. “We are excited about the next phase of growth for VTCSOM.”

 


Virginia Tech At a glance

Founded

Virginia’s original land-grant university, Virginia Tech was known as Virginia Agricultural and Mechanical College when it was founded in 1872. Virginia Polytechnic Institute and State University is the state’s second largest public university by enrollment.

Campus

Virginia Tech’s Blacksburg main campus stretches over 2,600 acres. Tech also has regional presences statewide and a study-abroad campus in Switzerland. The university’s Innovation Campus for computer science and computer engineering graduate students will open in Alexandria in 2024.

Enrollment (2022-23)

Undergraduate: 30,434

Graduate and professional: 7,736

In-state: 23,885

International: 3,884

Students of color: 8,741

Male: 57%

Female: 43%

Employees

Full-time employees: 8,538

Research and teaching
faculty: 2,766

Tuition and fees, housing and financial aid*

In-state: $15,476

Out-of-state: $36,393

Room and board: $11,746

Average financial aid awarded to full-time, in-state undergraduates seeking assistance in 2021-22: $8,588

*2023-24 figures, except as noted

 

Starting small

Randal Wimmer became a multi-millionaire based off a contract proposal he wrote at his kitchen table and at a Northern Virginia Starbucks.

A Navy veteran, Wimmer started his own government contracting firm, McLean-based Analytic Strategies, in 2003. It took three-and-a-half years and a lucky business connection for the company to win its first subcontract — providing maritime data analysis for Unisys Corp. at $200,000 a year — until it struck its first home run: a $15 million prime contract for logistics work from the Defense Logistics Agency in 2010.

“That was the one that took us over the edge,” Wimmer says.

Virginia is home to four of the world’s five largest defense contractors — Raytheon Technologies Corp., Boeing Co., Northrop Grumman Corp. and General Dynamics Corp. — not to mention a slew of other government contractors offering services ranging from janitorial and security work to integrating artificial intelligence into health care management software to building the nation’s nuclear aircraft carriers. According to the Government Accountability Office, the federal government spent $637 billion on contracts in fiscal 2021, $386 billion of which was spent on defense services and products.

That’s a lot of money to compete for in a crowded field, and for a startup trying to earn a piece of the pie, there are ways in, though it takes work, say those who have been there before.

“It’s not as simple as you build something, and they will come,” says Jerry McGinn, executive director of the Greg and Camille Baroni Center for Government Contracting at George Mason University. “You have to understand the marketplace, understand potential customers, understand what kind of offerings you need that are attractive [and] where you fit in the marketplace.”

If that sounds like the same sort of checklist any startup should have, federal regulations, security clearances and contracting rules dictating prior performance — proving you’ve done work through obtaining previous contracts — add additional challenges for entrepreneurs seeking a foot in the government contracting door. Wimmer and McGinn refer to this as the “chicken-and-egg” approach.

“It’s like, ‘Well, how do I get … experience when I have no experience? If you’re not giving me a job, I don’t have any experience,’” Wimmer says.

That’s where connections can be crucial. Joining industry associations and developing relationships with business development employees at larger contractors can lead to critical subcontracts that can build a business and help earn those necessary past performance requirements, Wimmer and McGinn say.

Federal programs, including the Small Business Innovation Research and Small Business Technology Transfer programs, can also help put a company on the government’s radar.

As a startup in the early 2010s, McLean-based ID.me won more than $5 million in grants from a National Institute of Standards and Technology program focusing on developing online identity management that helped it launch its product and provided access to state and local government customers, says CEO Blake Hall. The company also received investments from Virginia Venture Partners and Blu Venture Investors, both of which helped the company navigate the federal contracting world.

“With limited resources, you have to focus,” Hall says. “As you build trust and deliver value, your footprint will naturally expand as customers ask you to take on more work.”

Standing out

Another key to success is to find a niche by developing an innovative product or service. Sean Matson, co-founder and CEO of Virginia Beach-based Matbock LLC, says his military experience — he is a former Navy SEAL — helped his company figure out the process of getting a product to market and developing a supply chain. It also gave Matbock initial credibility and relatability to design and build the tactical gear it now sells. Matson says he watched platoon members modify newly issued gear that the government spent money on and thought “that seems weird,” so Matbock looked to fill the gap.

In August 2022, the company won its largest contract to date: $6.9 million from the Army to develop a prototype hybrid electric joint light tactical vehicle. “We relied on new materials, new ways to eliminate ‘one-trick ponies,’ and our own experiences,” Matson says.

Wimmer also points out that only 5% of companies in the United States pursue federal contracts. That eliminates much of the playing field. Earning a designation as a small, veteran, minority or woman-owned business or as one located in a historically underutilized business zone can also help a company stand out because the federal government requires that a certain amount of its money be awarded to those businesses annually. Further, Wimmer points out, the government tells its customers exactly what it is looking to buy via its acquisition and contracting process.

After winning more than $1 billion in contracts, Wimmer sold Analytic Strategies in 2016 and now runs the McLean-based Government Contracting Academy, which offers instructional courses for entrepreneurs trying to break into the industry.

As a government contractor, Wimmer’s initial successes took time and perseverance. He gained contracting experience while working corporate jobs and trying to launch Analytic Strategies. To grow the business after his first big win, Wimmer earned quality management certifications set by the International Organization for Standardization that documented and legitimized his corporate maturity. That’s a step he recommends to every business he now works with.

“This is the easiest and best industry you can ever pursue as a first-time entrepreneur,” Wimmer says.

Under the radar

Considering that four of the world’s five largest defense contractors are headquartered in Northern Virginia and that Hampton Roads is home to the world’s largest naval base, it isn’t surprising that Virginia was ranked the top state in the nation for defense spending in 2021.

But what many observers may not know is that quiet, academic Charlottesville has a booming defense industry that’s been growing for decades.

In Charlottesville, the total direct and indirect regional economic impacts from defense spending accounted for $1.2 billion in 2021, according to a study exclusively released to Virginia Business by the University of Virginia and the Charlottesville Regional Chamber of Commerce.

Conducted by the Weldon Cooper Center for Public Service at U.Va., the study found that the defense industry in Charlottesville and surrounding Albemarle and Greene counties directly accounted for 3,972 jobs, $421 million in labor income, $501 million in value-added income and $642 million in economic output in 2021. When including indirect impacts from the defense industry in the Charlottesville region, the total economic impact in 2021 included 7,347 jobs, $618 million in labor income, $831 million in value-added income and $1.2 billion in economic output.

This makes defense the second largest industry in Charlottesville behind only higher education. (U.Va.’s annual economic impact is nearly $6 billion, according to the university.)

Defense is “a quiet sector in our community,” says Deborah van Eersel, the U.Va. Foundation’s chief administrative officer and director of marketing. “People don’t really know how much it contributes to the community’s well-being.”

The Weldon Cooper study, which cost roughly $20,000, was conducted at the request of the Defense Affairs Committee (DAC) of the Charlottesville Regional Chamber of Commerce and funded by Albemarle County, the U.Va. Foundation and the city of Charlottesville.

‘Secret Squirrel’

National defense spending has increased steadily since the Sept. 11, 2001, terrorist attacks, having grown from $320.09 billion in 2000 to $800.67 billion by 2021, with $62.7 billion going to Virginia alone that year.

Previous economic impact studies focused on defense have looked at all of Virginia or at the robust defense spending in Hampton Roads or Northern Virginia. But those reports don’t often capture the whole story of the defense industry’s impact in Virginia, especially in the Charlottesville region, which is home to Rivanna Station, an Albemarle County sub-installation of Fort Belvoir in Fairfax County. Three of the top military intelligence gathering agencies — the Defense Intelligence Agency (DIA), the National Ground Intelligence Center (NGIC) and the Geospatial-Intelligence Agency (NGIA) — have a presence at Rivanna Station.

“A lot of what we have [in the Charlottesville region] is what I call ‘Secret Squirrel’ stuff, mostly intelligence units and elements and people. They don’t and can’t really speak to what they do,” explains retired U.S. Army Col. Lettie Bien, who is the Charlottesville Regional Chamber of Commerce’s inaugural defense affairs program manager. “Hence, this community did not see how robust the defense community was here in the Charlottesville/Albemarle region.”

Working with van Eersel, the chamber and university decided that for the community to “really get behind and support the defense space, they really needed to understand and know the true economic value that it brings to our area,” Bien says. “That became the impetus for having the report.”

While the defense sector has largely started growing nationally during the past two decades, the industry really arrived in Charlottesville in the late 1960s, explains Chris Engel, director of economic development for the city of Charlottesville. This is when NGIC was known as the U.S. Army Foreign Science and Technology Center (FSTC). Created in the mid-’90s from the merger of FSTC and the U.S. Army Foreign Science and Technology Center, NGIC was once located just off the downtown mall in Charlottesville, but it outgrew that space and moved to Rivanna Station in Albemarle, Engel says.

Charlottesville’s defense sector boomed following 9/11.

“We had significant growth here related to Rivanna Station after 9/11,” van Eersel says. “Then the country went to war in both Afghanistan and Iraq, and they brought personnel down to work out of the station and brought contractors then to help support their mission in those places.”

Proximity to D.C.

Another reason the defense industry in Charlottesville has largely remained under wraps is that many of its workers are civilians performing intelligence or government contracting work.

Contractors with a presence in the area include McLean-based Fortune 500 firm Booz Allen Hamilton Holding Corp., which employs more than 150 people at its Charlottesville office, where it primarily does contract work for defense and intelligence community clients, says Bryan Shrader, senior vice president at Booz Allen. Work includes designing, developing and implementing digital, cloud-based, advanced analytics and other technologies for defense and intelligence clients.

“Charlottesville is a great location for Booz Allen and our clients,” he says. “It has a strong base of highly technical talent, reasonable proximity to the National Capital Region (NCR) and wonderful culture and charm — all of which draws people to the area.”

Roughly 100 miles from the nation’s capital, Charlottesville is a desirable location for the defense and intelligence industry, say Bien and van Eersel.

“One of the things that the government has wanted to do is to not have all of its assets located within a hundred-mile radius of … D.C., the capital region,” van Eersel explains. “The idea is that if we had a strike, they want to be far enough away so that their assets could not be damaged by a bomb or some sort of a terrorist attack.”

Booz Allen largely hires locally or employs workers who are planning to relocate to the Charlottesville region. “This often makes our job hiring top technical talent a bit easier than some of the other non-NCR geographies where Booz Allen and our clients operate,” Shrader says.

Falls Church-based Fortune 500 defense giant Northrop Grumman Corp., the world’s fourth largest defense contractor, also maintains a significant presence in Charlottesville. Northrop Grumman employs almost 500 people in the Charlottesville region in engineering, manufacturing, finance and program management jobs supporting contracts with the U.S. Navy and U.S. Coast Guard. The company’s work in the region largely focuses on electronic mission systems as well as machinery control and bridge systems, explains Rudy Fernandez, an operating unit director and Charlottesville site lead with Northrop Grumman.

“Charlottesville has a diverse workforce, from touch labor to high-end engineering; that aligns well with the needs of our business,” he says, adding that “Charlottesville’s proximity to the government customer located in the D.C. area is beneficial to both the customer and the business.”

Deep talent pool

Northrop Grumman and Booz Allen, as well as other Charlottesville-region defense contractors, are focused on hiring veterans. About 10% to 20% of Northrop Grumman’s workforce in Albemarle are former service members, Fernandez says. Companywide, veterans comprise nearly 28% of Booz Allen’s total workforce, Shrader says.

“Frankly, people who retire out of the military — particularly if they’re in Northern Virginia — find that this is a great place for them to come and [eventually retire],” Bien adds. “For those who are just getting out [of the military], they find that Charlottesville is also a great place to start a business, particularly if it’s going to be in the defense space.”

Defense sector jobs are attractive to veterans and civilians alike. As of 2020, the average wage for defense sector workers in the Charlottesville region was more than $104,000, according to the Central Virginia Partnership for Economic Development (CVPED).

“A lot of the folks are very well-educated and have a high level of skill,” says CVPED President Helen Cauthen, adding that her organization is also working to retain area veterans. “We’ve had some success with that, where the folks get down here … and realize they really like Central Virginia and they end up living here and potentially taking other jobs here because it’s a great workforce.”

While most of the defense industry in Charlottesville is related to Rivanna Station, the region’s surrounding counties also are working to attract more defense contractors. In August 2020, the Greene County Board of Supervisors approved a defense production zoning overlay across the whole county, a state designation that provides incentives such as tax reductions and permitting fee grants to defense contractors.

“The defense industry as a whole has had a positive impact — I don’t want to say [a] significant impact because it’s still a growing impact in Greene,” says Alan Yost, the county’s director of economic development and tourism. “With the Rivanna Station only being a few miles from our border, there are several defense companies that have settled into the Greene County area.”

Since the county implemented the defense production zoning, a few defense businesses have examined relocating to Greene, Yost says. “They ended up not coming here for different reasons, but it’s bringing more and more attention to our county’s designation as a defense production zone,” he says. “Rivanna Station is bringing a lot of defense contractors into the area, but it’s not just Rivanna Station. It’s the energy that they create that brings other defense industry partners here for different reasons.”

Having access to a nearby major academic institution also helps the defense sector in Charlottesville.  

“The talent pool coming out of the university is really high quality,” van Eersel says, adding that there are pre-grad internship opportunities for U.Va. students.

For example, students from the Frank Batten School of Leadership and Public Policy often have internships or field study experiences with national security groups and defense contractors in the Charlottesville region.

Defense is also one of the top industries for internships for U.Va. engineering students, second only to internet and software jobs. Engineering students — both undergraduate and graduate — are in demand from the local defense industry, with new hires earning an average of $70,000 to $85,000 per year after graduation performing engineering, research and data analytics jobs, according to U.Va. Some of the top defense recruiters at U.Va. include DIA, BWXT, Naval Air Systems Command, Leidos, Battelle and Booz Allen.

“They can begin to be recruited by the government, and then their security clearances are worked on. By the time they graduate from university, they’re ready to go,” van Eersel says.

U.Va. also is home to the Judge Advocate General’s Legal Center and School, commonly called the JAG School. Located on campus, the federal service academy operates independently of U.Va. and educates military and civilian personnel to become military lawyers.

U.Va. itself also benefits directly from defense spending, Bien adds, in the form of Department of Defense research grants, contract spending, GI Bill student tuition spending, household incomes of DoD personnel enrolled at the university, ROTC program spending and university startups resulting from DoD-sponsored funds.

Located in Charlottesville, too, is the Federal Executive Institute, an executive management development and training center for federal government workers. “It’s where the government sends its senior civilians for leadership and government training,” Bien says. “People within the defense [industry] always know what the Executive Institute is. That adds to the mystique of why Charlottesville is so great for [the defense industry].” 


Keswick Hall. Photo courtesy Virginia Tourism Corp.

Charlottesville at a glance

Widely known as home to Thomas Jefferson’s Monticello estate and the University of Virginia, the Charlottesville region is located about 65 miles west of Virginia’s state capital. The city was founded in 1762, with the Jefferson-designed U.Va. campus founded 57 years later. The city and surrounding counties are also popular for vineyards and breweries as well as access to the Blue Ridge Mountains. The largest industries in Charlottesville include higher education, health care, defense, and hospitality and tourism.

Population

Charlottesville: 45,672

Albemarle County: 113,535

Greene County: 20,552

Top employers

University of Virginia/UVA Health

Sentara Healthcare

U.S. Department of Defense

Northrop Grumman Corp.

Crutchfield Corp.

CFA Institute

Major attractions

Monticello, the home of America’s third president and author of the Declaration of Independence, is a UNESCO World Heritage Site that draws visitors from around the globe. You can see the distinctive Jefferson-designed Rotunda at the University of Virginia. Charlottesville’s Downtown Mall is a good place to visit for eating, shopping and socializing. Take in the natural beauty of the surrounding Blue Ridge Mountains along Skyline Drive and the Blue Ridge Parkway and at Shenandoah National Park. Hikers will savor the Instagram-worthy views from Spy Rock and Humpback Rocks. Take a break from picking apples and peaches at Carter Mountain Orchard by listening to live music and eating apple cider doughnuts. Or take a tasting tour through area vineyards like Jefferson Vineyards, Trump Winery, Blenheim Vineyards and Pippin Hill Farm & Vineyard.

Top convention hotel

Boar’s Head Resort
175 guest rooms
22,000 square feet
of meeting space

Boutique/luxury hotels

Kimpton The Forum Hotel

Albemarle Estate at Trump Winery

The Graduate Charlottesville

Keswick Hall

Quirk Hotel Charlottesville

Oakhurst Inn

The Draftsman

Notable restaurants

Ivy Inn
American
ivyinnrestaurant.com

C&O
French
candorestaurant.com

Orzo Kitchen & Wine Bar
Mediterranean
orzokitchen.com

The Ridley
Southern
ridleyva.com

The ‘wrong inventory’

During the pandemic, consumers wanted things to make them feel comfortable at home — whether it was sweatpants, home décor or the latest fuzzy blanket. But as many workplaces have transitioned to hybrid or in-office work models and people are back to socializing outside the home, products that were over-ordered by companies during the pandemic are now piled in warehouses unused and unpurchased.

This “mispurchasing” of goods, as Rick Holden, vice president of business development and a corporate officer for Richmond-based Riverside Logistics, puts it, has led to a massive influx in warehouse inventory across the state. “This created a huge glut of inventory that we’re still working through,” Holden says. 

The vacancy rate for warehouses in the Hampton Roads region is less than 1%, says Trevor Dunlap, president of Chesapeake-based transportation and logistics companies Givens Transportation Inc. and Givens Inc. “Warehouses are full here locally in Virginia, but also across the country,” he says. “The vacancy rate in Hampton Roads is like 0.7%, so warehouses are super full.”

The Richmond market also saw a massive increase in warehouse inventory during the past couple of years. Richmond’s warehouses have traditionally been less than 40% full, but since the pandemic, they’ve jumped to 90% full, says James Durfee, vice president of business transformation at Riverside Logistics, a third-party logistics and supply chain management company.

“Today, we see evidence that the wrong stuff is sitting in the warehouses,” he says, referring to pandemic-popular items like leisure wear and furniture. “The turnover [rates] are a lot slower.”

Typically, a company will sell and restock inventory roughly every two months. Now, overstock may sit in warehouses for much longer, a phenomenon dubbed “pandemic hangover.”

Mike Coleman, president and CEO of Norfolk-based logistics and shipping firms CV International Inc. and Capes Shipping Agencies, also notes that there are still challenges with supply chain backlog.

“There’s still a lot of difficulty finding warehouse availability,” he confirms. “Many are full with excess inventory.”

The need is questionable

Some supply chain experts predict, though, that the issues with warehousing capacity won’t last.

“In my opinion, the glut of inventory in warehouses is temporary, not uniformly distributed across industries, and will be dealt with — worked off, sold on the discount market, etc. — relatively quickly,” says Barbara Hoopes, a professor and supply chain expert with Virginia Tech’s Pamplin School of Business.

This means that most companies won’t move to build more warehouse space to handle the current excess inventory but will rather turn to contracted or public warehouses — a warehouse that allows businesses to rent space to store their products — for shorter-term and more flexible space, Hoopes adds.

“This signals good news for third-party warehouse/distribution companies, whose services and capacity will continue to be in demand — especially regionally,” she says. “The third-party logistics industry will likely play an important role moving forward to absorb unpredictable demand and inventory levels.”

Holden also worries about building too much more warehouse space. After the glut of inventory clears out, warehouses will ultimately have excess space, he says. For right now, Riverside Logistics is being more careful about the clients it’s taking on — and has even had to sever ties with some customers as warehouses remain too full. 

“We’re much more selective on who we take. We’ve actually had to ask some clients to leave our space,” Durfee says. “The nature of the beast was that we were kidding each other that we’d be a good fit long term. It took us a while to internalize that across our management team because we had never done that before.”

The labor issue with warehouses

While inventory levels remain high in warehouses, so does the demand for labor. Talent in the supply chain industry as a whole has been scarce, particularly for warehouse workers and truckers. In fact, 73% of employers have had difficulty attracting warehouse talent, according to hourly worker staffing firm Instawork’s State of Warehouse Labor report for 2022.

In turn, some warehousing companies have implemented higher hourly rates. Warehouse workers prior to the pandemic made about $14 to $15 per hour, which has now risen closer to $20 per hour, Durfee says. Some logistics businesses are even taking a more serious look at warehouse automation to ease the pressure for hiring for jobs that are traditionally hard to fill, Hoopes says.

But just as inventory levels remain unpredictable for the future, so does the demand for logistics labor. 

“Yes, there may be some competition for warehouse workers at the moment,” Hoopes says, “but it’s hard to say if it will last very long in the face of prolonged uncertainty.”