Installation Update: The challenge of attracting a new generation of installers - July 2016
By Jessica Chevalier
Sustaining a steady crew of skilled and available floorcovering installers has long been a headache for flooring retailers and commercial contractors. That pain intensified when the dearth of installers grew in the recession, and, for many, became something of a migraine last July when the Department of Labor issued its Fair Labor Standards Act definition of an independent contactor.
Is the so-called “installer crisis” a problem that impacts retailers and commercial contractors on a daily basis? Craig Phillips, president of Barrington Carpet & Flooring Design, reports that, “Having enough quality people to do the work is our biggest concern day in and out.” While many share Phillips’ sentiment, solutions are a bit harder to come by. Particular dealers may find and assemble good crews that stick with them long term because they keep them busy and offer the best deal in town, but industry-wide, the story remains largely the same—too few skilled installers to keep up with demand.
That stasis may break if the Department of Labor begins fining businesses that don’t accurately report independent contractors, which could essentially strong-arm an industry-wide change in behavior. However, even if that never materializes as an imminent concern, the industry would be best served by increasing the appeal of flooring installation as a profession, so that smart and skilled young people see it as a viable and long-term career choice.
FINDING FRESH BLOOD
The floorcovering industry is not alone in its fight to attract skilled craftsman. With Baby Boomer workers now actively retiring, skilled trades as a whole are in need of new workers. As an example of this, a 2015 National Public Radio (NPR) report titled “Economists Say Millennials Should Consider Careers in Trades” noted that there are currently 600,000 jobs for electricians in the U.S., and within a decade of the report, half of those jobs are expected to open up. “With so many Boomers retiring from the trades, the U.S. is going to need a lot more pipe-fitters, electricians, nuclear power plant operators, carpenters, welders and utility workers—the list is long. But the problem is not enough young people are getting that kind of training.”
Consider, as well, that the flooring industry has been shuffling along the last few years with low single-digit growth, and a surge of growth is all it would take to up the installer crisis from serious to critical.
Todd Wheeler of Salinas, California-based retailer Wheeler’s Flooring speaks candidly about the industry’s ability to attract talent. “Young people today don’t see floorcovering installation as a career choice, and it isn’t being advertised as that,” he says. “You don’t hear much about encouraging the younger generations to get into the trade. People stumble into flooring installation most often; they get into it by default.”
What makes this even more striking is the fact that Wheeler’s isn’t just waiting for potential installers to come to them. “We have been looking for youth to train, and they have been hard to find,” reports Brett Wheeler, who is charge of the crews at Wheeler’s. “We are not getting youth to go into the trade, and in the next five or ten years, this will be a big concern.”
The challenges are similar in Ohio, where Barrington serves the builder, property management and retail segments. “We’ve had a lot of turnover in the last couple of years due to retirement,” says Phillips. “Probably one third of our current installers are on the shorter end of their career. This is the beginning of the problem, not the end.”
In fact, all the retailers and commercial contractors with whom we spoke agreed that the shortage of installers is getting worse, not better. Phillips says, “After the slowdown, we were able to pick up a lot of people as they came back into the trade. That’s how we grew our installation rolls when things ramped back up. We’re continually looking for guys. But the irony is, if someone’s available today, we’re cautious. We look at references and an in-depth evaluation before putting them out there. We have skinned our knees a couple of times.”
Phillips tries to increase Barrington’s odds of picking up quality laborers through an incentive program: if a current installer or salesperson recommends an installer who stays with the company for more than 30 days, the individual who made the recommendation receives a gift card.
Unfortunately, the problem is not only attracting people to the trade of floorcovering installation, but also attracting the right kind of people. “The caliber of people attracted to the trade is falling,” reports Ken Hurd, owner of Commercial Interior Resources (CIR) in Los Angeles and board member of the International Union of Painting and Allied Trades’ floorcovering installation apprentice program. “The International Union of Painting and Allied Trades has within its guidelines that people have to have a GED to come into the trade. We’re seeing people who want to enter the trade but don’t have even that.”
Why are youth eschewing skilled trades in general, and floorcovering installation in particular? In past years, a college education was a fairly reliable path to financial security, whereas trades carried the stigma of being dirty and less important work. The U.S. is a culture that values education, and, for many, that equates to college. As a result, those who can pursue higher education, academically and financially, typically do, and that leaves a shallow pool of workers to fill a great many trade jobs. However, today the college path has become a bit more meandering, with a host of dead ends and potholes. In addition, the cost of college is now exorbitant for many, which could present an opening for skilled trades that offer the promise of security—including a living wage, insurance benefits, job security and retirement—especially if entry doesn’t come with a mountain of student loan debt.
Lew Migliore, president of LGM and Associates, notes that the challenge of finding qualified installers is more severe on the residential side, where installers are typically paid less, and he has strong feelings about the root of the problem on that side of the business. “It’s like the old saying, ‘We have met the enemy, and he is us,’” Migliore says. “Retailers beat their installers up for so long. Yes, there is a crisis, but we created it.”
The big boxes often embed the cost of installation in product cost and offer consumers “free” or very low priced installation. That practice has led to an undermining of the true value of good installation across the industry, but Lauterbach believes it also offers independent retailers the opportunity to use installation as a differentiator.
A significant part of installation is the customer experience. Too often, the process is unfriendly and intimidating for the consumer, but good independent retailers work hard to control that process and eliminate the discomfort for the consumer.
“That is the value of buying from independent retailers, as opposed to big box,” says Lauterbach. “I know who my installers are and have complete faith in them. My install manager works closely with my sales manager to facilitate the installation process, and my installations are guaranteed for life. Consumers need to ask themselves what kind of operation they want to do business with. Will they really be getting value at the low end of the scale? Where will they be if there is a problem? If they buy material-only and hire someone to install it, they’ll be trapped in the blame game should a problem arise. The safe choice is to buy from a local retailer with a solid reputation.”
TO EMPLOY OR NOT TO EMPLOY
There is a meaningful discussion today about whether floorcovering retailers and commercial contractors would be better served to employ their installers, at least a core group, bringing in subs as needed to handle the overflow. That is the way that Denny Lauterbach, owner of Floor Covering Brokers of Traverse City, Michigan, has organized his business. When he bought Floor Covering Brokers 20 years ago, the business had a couple of in-house installers, but he has added more to the ranks.
Part of the reason that Lauterbach values employing installers is because he spent the first 30 years of his career in the elevator industry and saw the process work there. “In the elevator business, laborers are always employees, and they’re all unionized. That isn’t a bad thing. Frankly, one of the struggles in attracting installers to the floorcovering business is that we don’t pay well enough to draw people in. I have a nephew that I pulled into the elevator business 20 years ago. He lives in Chicago, has a GED and today he’s making $120,000 a year. We don’t offer that in this industry, and therefore, it isn’t the first choice for tradespeople. Eventually, it will have to come to that. We’ll have to offer better pay and good benefits if we want to make flooring installation a career of choice for tradespeople.”
Lauterbach believes the establishment of employee installers benefits the retailer as well. “I appreciate the loyalty piece of the equation. Your relationship with your installers is a lot better if you are supplying them with a 401K, insurance and the benefits of employees,” he says.
Los Angeles’ Commercial Interior Resources also has employee installers. CIR is a signatory, basically a legal partner, of the International Union of Painting and Allied Trades, which, along with the United Brotherhood of Carpenters, offers four-year training programs that include classroom and field training progressing from apprentice to journeyman levels. The United Brotherhood of Carpenters’ training program is well known in the industry as INSTALL. In the Los Angeles market, Hurd reports that signatory houses are few and far between, and that the bulk of his competitors use subs.
Years ago, however, there was a project Hurd hoped to bid on that required union installers. At the time, non-union shops could bid on these jobs, as long as they subcontracted the labor to signatory installers. (That is no longer the case today.) “In that process,” says Hurd, “I was exposed to the level of professionals of signatories, and I started to see that I was getting better quality labor, and that my customers were happier, so I became a signatory and joined the International Union of Painting and Allied Trades’ apprenticeship training program.” Hurd went on to become chairman of that program for 15 years and still sits on the committee today.
Hurd acknowledges that his firm has higher installation costs than some competitors, and even that the firm loses bids because of it. He estimates that CIR wins three of every ten bids that it submits. “The other seven are often lost because of the cost of labor,” he explains. “But we realize that’s the nature of the beast. It takes a lot of work to manage projects well, and the key is having the discipline to train our apprentices and journeyman to help them understand that it’s about more than getting product on the floor. It’s about making sure the customer is pleased with the process. It’s about knowing that, when they are on the jobsite, they are being productive and not interfering with other trades’ productivity. In our house, everyone has safety training—even CPR—and understands where they should and shouldn’t be. They know where to have lunch, when to show up and leave, what equipment they will need, who they should and shouldn’t talk to. All these things require training. Educating our customers on the fact that we have formalized training adds value, and our goal is to match our values with our customers.”
Like Lauterbach, Hurd firmly believes that he gets more productivity out of his employee installers than his competitors get out of their subs. What’s more, the fact that many of his clients and potential clients appreciate his approach keeps the business rolling in. Everyone, after all, has to cast a large net to catch a few fish, and winning three out of ten jobs isn’t bad—especially if they are the right three.
However, while employment may seem like a win for installers, Phillips says that some prefer their autonomy. “Freedom is something that the existing force has grown accustomed to,” says Phillips. “They are their own bosses. They’re not told exactly when to show up or how to do their job. There’s lots of independence there.”
For Phillips, the decision on whether or not to employ installers isn’t much of a decision. He believes that keeping installers independent is vital to the survival of his business—and many others businesses. “The challenges with paying overtime and benefits are just too great. I don’t see how the market would bear those additional costs. We watch it closely. We watch the trades and try to keep a finger on the pulse of the situation. We have done everything we can to keep true separation and independence from our installers. We don’t want things to get blurry.”
Like Phillips, Todd Wheeler has all sub installers and works hard to establish clear “independent contractor” lines with them while also fostering long-term relationships that benefit both parties. In fact, one of Wheeler’s crews has been with the business since 1985, and a good many others have been around for a decade. “We pay them what they are worth,” says Wheeler. “We pay very fairly, or we wouldn’t have them for so long. That being said, it’s hard for everyone to make a profit, and as far as the percentage, pay hasn’t increased with inflation in our area, but it’s still better than staying at home. We have always encouraged the guys to get their own license for the tax benefit.”
For his part, Migliore believes that all the anxiety about the Department of Labor’s spotlight on independent contractors is somewhat unfounded. “People need to be doing the right things,” he says. “When you really look at the Department of Labor’s definition, all it’s saying is that if you have independent contractors, you have to be sure that they are legitimately independent. This is nothing that people need to worry about. They just have to make sure to have their ducks in a row. If it were me, I’d make them independent contractors but help them understand how to establish their businesses, show them where to get training, show them a career path. Tell them, ‘You can’t work exclusively for me. You have to work for other people.’”
In fact, Migliore points to what might be the most simple solution to the potential crisis raised by the Department of Labor’s focus on independent contractors: “Two or three dealers could get together, build crews and share them, so they are floating around and not working for the same business all the time.”
Ultimately, whether one uses employees or subs, it’s all about working smart. Says Hurd, “We sometimes use contractors for things like installing hardwood or wall covering, and we make sure to have contracts in place—individual contracts for each project. Companies that don’t work that way will get caught, and it will be expensive. How many flooring dealers use subcontractors and put their own shirts on them? These laborers show up every day to pick up materials at their warehouse. How can you say that’s not an employee? People who run businesses that way are highly exposed.”
Migliore believes that the best move for retailers and commercial contractors using subs is to confront the issue with the Department of Labor head on, rather than crossing their fingers and hoping for the best, as some are inclined to do. “Walk into the lion’s den—the Department of Labor—and face it. Do what you are supposed to do. If you have a question, ask them. They will tell you. There’s no reason to be paranoid.”
For a full report on issues related to the Department of Labor’s definition of “independent contractor,” check out “Independent Contractor or Employee: Agencies are Cracking Down on Retailers” in our October 2015 issue or read it online.
INCENTIVIZING INSTALLERS
In an effort to increase interest in the trade, the International Union of Painting and Allied Trades recently increased the starting wage for apprentices. “On May 1, we completed collective bargaining to increase the starting pay for apprentices from $10 per hour to $14 per hour, so that within a year they will be making $15 per hour,” explains Hurd. “We are hoping that the wage plus the benefits will attract other people to the trade. If apprentices complete the training program, their annual compensation will be on track with other tradesman. We are very conscious of what other trades are being paid, the plumbers and electricians. We want to come as close as we can to that. Today, someone can enter the trade at $14 per hour and, by the end of four years, the package with benefits could be $44 per hour. Getting there is going to require time and training, but at least people can look at that and see the potential.”
For a non-union house like Lauterbach’s Floor Covering Brokers, offering the best deal around is key in attracting the best installers, and he believes this is why he hasn’t struggled to find installers, as so many have. “I pay more and try hard to be the place that people want to work. I also try to be the fun place to be, and I have been fortunate to have experienced people sign on.”
Fair and competitive compensation goes a long way toward increasing the attractiveness of floorcovering installation as a career, but that is only part of the equation. Insurance benefits, job security and retirement are must-haves today.
What’s more, the industry must change the perception that floorcovering installation is a short-lived career due to the toll that it takes on the human body. The fact is that industry innovations have, at least in part, decreased damage to the body. The steady shift from sheet and roll goods to boxed flooring alone means that installers aren’t carrying loads as heavy and awkward, and Hurd notes that improvements to tools have helped as well. “The tools today are far more ergonomic,” Hurd says. “Look at the evolution that kneepads have gone through, from simple foam pads to pro pads that are $160 per pair. These reduce wear and tear on the body.” In addition, the advent of more environmentally friendly adhesives and sealers means that installers are less likely to spend their days inhaling potentially dangerous fumes.
“We should be marketing installation as a lifelong career now,” Hurd says. “There are many installers in their 40s, 50s and 60s still in the field. This is a trade that you can stay in long term.”
Brett Wheeler agrees, adding, “The trend toward hard surface means installation is getting easier on the body. Floorcovering installation can be a 25- to 30-year career, if it’s done well. When an installer is the head on a project, he should have a helper who does heavy lifting. We need to work smarter, not harder.”
Formal or informal apprentice programs, such as what Brett describes, are important cogs in the installation wheel, key to both educating newcomers and bearing the heavy load, literally, for industry veterans. Even retailers and commercial contractors that work with subs can assemble crews with a mix of individuals whose skills complement one another and keep the tradesmen-to-tradesmen education machine humming along.
Says Lauterbach, “We have been able to bring in a few young people as helpers, and it’s working out pretty well. We have been able to keep up with growth. The helpers are working with the installers and learning the trade. They’re mostly muscle in the beginning, but it’s not too long before they’re cutting carpet and able to put down cushion. If it’s a hardwood job, they’re fairly quickly learning how to operate a nail gun. For LVT, they’re putting down the glues and doing all but the finish work.”
Lauterbach makes a crucially important point: people are willing to work hard, even for less compensation, if they feel they are valued. “Flooring installers don’t have a lot of respect as a trade,” Lauterbach explains. “They’re seen as below electricians, plumbers and pipe fitters. Part of that is self-inflicted, but it’s also, how much respect do we give them? If we aren’t paying them and offering training, if they aren’t getting what they deserve, how do we expect them to respect themselves?”
EDUCATING A BETTER WORK FORCE
One key to building self-respect among installers and thereby elevating the industry is education. However, because so many floorcovering installers are independent contractors, educating them is a challenge. According to Wheeler, one of the major hurdles is that subs are often hesitant to participate in training because it means days off the job, which translates to lost income. Of course, there is also the question of who will pay to train an installer who is, technically, no one’s employee.
Even for those who have employee installers, the task of educating them can be prohibitive, “It’s hard and expensive to send people for training,” explains Lauterbach. “From here [in Traverse City, Michigan], they typically have to travel three or four hours by car. I have to pay for the car, for meals, for the classroom training, and they don’t come back expert installers by any means.”
There are several avenues for educating installers: installer-to-installer training; formal apprenticeship programs through the unions; by-the-class training through organizations such as Certified Floorcovering Installers and the World Floor Covering Association; and product installation training by manufacturers.
In Phillips opinion, the challenge today isn’t about expanding education for its current crews but about building education programs for new installers. “Most of the guys we have are skilled—there just aren’t enough of them. We need basic programs that will feed young talent into the labor force.” Phillips believes that, as others have suggested, trade and vocational high schools offer an untapped opportunity for creating a steady stream of young talent into the industry.
The evolution of product has created a significant challenge with regard to education as well. Though some of the modular products on the market today require fewer technical skills with regard to installation, the fact that new products are being introduced to the market at a rapid rate creates a greater need for installers to stay atop current trends and practices.
At the other end of the spectrum, Phillips is seeing a lack of available talent to install older format products such as sheet vinyl. “There is no one coming up through the ranks to do that, and there is a lot of it still being installed in the builder market. It’s a specialty and takes a craftsman.”
Regardless of how training is obtained, one skill set that should not be overlooked in installer training is customer service. “Within our crews, there are skills sets, and one of those is people skills,” explains Phillips. “I have some skilled mechanics that I would never put in front of a retail customer because they aren’t used to dealing with people. For retailer customers, I use people with customer service skills, to provide heads-up on what will happen and set expectations for the customer. When I contact customers after the job is finished, I specifically ask questions about the installers, and I run an installer bonus program, which provides a small bump in pay on a monthly basis based on survey results.”
It’s essential to bear in mind that the installer experience is often the customer’s last interaction with the flooring industry, and so, whether brought in-house or kept at arm’s length, installers should represent the organization favorably with their readiness, manners, skills and ability to complete the job in a timely and professional manner. Again, that means attracting individuals who are capable of such professionalism and who will look at floorcovering installation, not as a stepping-stone or summer job, but as a career path.
Lew Migliore says, “This is a major opportunity for immigrants. Where I live, if it weren’t for Hispanics, there would be no rough carpenters, no yard people. Teach them a career, and you have them for life. We in the floorcovering industry have done a lousy job of that. There are guys out there in the field who are making no more money than they were decades ago. It’s not just about money, but about treating installers with respect, getting them training, creating a career. Some retailers out there have never had an installer shortage because that’s how they do business.”
Copyright 2016 Floor Focus