As I write this, I have spent the past month attending several industry conventions, trade shows and related meetings. The common question asked of me at all of these gatherings has been, “What are you doing to fix our installation problem? Are you training new blood for our industry?”
My response has typically been, “Let me ask you – what are you doing to fix your installation problem? Are you training new blood for your business’ future?” If I received a reply at all, it typically was something to the effect of “not much.” Sound familiar?
The vast majority of dealers that I encounter seem to have no strategy to guide their firms’ service departments into the future. They just keep waiting on a miracle to happen! Remember, raising rates and recruiting installers from your competition is not a business strategy – it’s merely a Band-Aid applied to existing problems. Neither of these methods will do anything to strengthen your position one, five or ten years into the future. Not to mention, they may likely not even be legal.
When I asked a group of dealers this past week what they were doing to retain installers, the universal answer was, “We raised our rates that we pay them”. I reminded them that if they were using contractors, to be in compliance with the tax laws, they had no right to set prices. That is completely the installer’s responsibility. The retailers’ only option is to accept or decline the rate quoted. Failure to comply with this method can have serious financial implications, as we have witnessed numerous times recently. Glancing across the room, these dealers all looked as if they had a mouthful of sour milk!
Ask yourself; do you really want the installers setting your costs? Understanding the current demand for labor, many contractors are beginning to play catch up for the many years that rates have been stagnant. Can you properly control your marketing efforts with these costs being a variable? Do you have full understanding of the current rules, or are you relying on your interpretation of them? The WFCA and the CFI stand ready to assist with clarification as to the laws regarding using contact vs. employee installation.
Personally, though, I feel that the most important question that you must ask yourself is if your current path is sustainable? Are any risks that you are taking with Department of Labor compliance worth the potential penalties that you may face? Can you honestly expect independent contractors to stay up to date with constantly evolving products and installation procedures? If so, what is their current incentive to do so? And when mistakes happen, who is ultimately responsible in the customers’ eyes? Most importantly, isn’t it more than a little scary to have such an important element of your ability to succeed essentially out of your control?
Please know that I do not live in a bubble. I have an entire career’s worth of experience using both employee and contract labor. I fully realize the pros and cons of each system, both in the short term, and the longer term as well. Both methods come with a cost attached. My experience has told me, though, that when investing in my own staff, I was building equity for the future. However, when using subs, I was figuratively just paying rent.
Determining how to best address your installation department going forward should not be an easy decision made in haste. But these are decisions that are facing every retailer today. Don’t hide behind the excuse of, “That’s how we’ve always done it.” That was then, not now!
In the current market, where it is estimated that less than half of the workers needed for the construction industry are entering the field, will your current strategy allow you to compete for the best available talent? Or are you going to be comfortable taking the path of least resistance and continuing to settle for what’s left, as most dealers do today?
In my mind, contrary to popular opinion, training new recruits is not the primary issue today when discussing the shortage of installers. Numerous opportunities to do so are currently available in the industry. Recruitment of trainees is of greater urgency.
I have had conversations with numerous technical schools regarding flooring installation being added to their curriculum. The first question asked always relates to job placement upon completion of the course. Since we are competing with other construction related trades that offer a benefits package, insuring stability for the worker both now and into the future, the conversation usually stops there. In the opinion of these schools, being a flooring installer is not seen as an undesirable profession. They simply don’t believe that it can compete as a solid career choice compared with many other trades that are being offered. Perhaps we should be listening more closely to what they are saying. Their enrollees seem to be!
Your first decision should be to visualize what you want your workforce to look like several years from now in order to best prosper in an intensely competitive marketplace. With product becoming increasingly available from a variety of new avenues, ask yourself whether an improved service experience will be valued by tomorrow’s customer. If so, will your firm be prepared to provide it? Then, with the end goal in mind, work backwards to achieve the desired results.
At the WFCA, it is our responsibility to support all of our members’ efforts, regardless of the manner in which they choose to operate their business. To this end, we have a variety of materials and benefits designed with flexibility in mind. But we can only assist our members. We can’t do the work for you.
When it comes to the future of professional installation, your firm, and the industry as a whole, has truly come to the fork in the road. Which path forward will you choose?
