Yoho: Solving the Crucial Labor Shortage
authors Dave Yoho | December 3, 2021
A recent study regarding the loss of manpower in the home improvement industry contains some startling information. The industry is projected to have in excess of $400 billion in revenue for the year 2021. During that period, it is also estimated that the industry lost over 1 million workers who install home improvement products on or in the homes of consumers.
The industry is now experiencing what could be categorized as the worst labor shortage in its lengthy history. It raises the question: How do we hire, train and retain those needed for installation? Current backlog alone shows an immediate need for 500,000 installers. If you are an owner of a home improvement or remodeling business, you are probably aware of this.
Industry leaders and publications continue to address these concerns; however, outside of a small percentage of progressive retail companies, we’ve seen little adaptation to effectively overcome the current crisis. We conducted a recent survey to determine the viability of programs, techniques and ideas to offset this issue, and the results show a lack of understanding and general research.
Identify Other Parts of the Problem
In the past month, we’ve received dozens of inquiries relating to delays in production and delivery of home improvement products to dealers. Many manufacturers have increased their prices because material costs have increased substantially. Even worse, the problem is not going away in 2022; in fact, it will probably get worse.
In all fairness, manufacturers must also overcome labor and material shortages, increased gasoline prices, a lack of trucks and drivers, as well as higher wages for those they employ.
Hiring Problems Won’t Go Away Soon
Recruiting production personnel (as well as others) will be a serious challenge for the remainder of 2021 and, at a minimum, the first two quarters of 2022. Beyond the ordinary challenges, most retail companies have been selling more business than can be installed on a monthly basis.
Any solution needs to take into consideration (A) installing the dollar-equivalent of what was sold each month and (B) implementing an ongoing program that reduces a portion of the backlog, including creating systematic scripting to be delivered by your sales and marketing personnel at the point of sale.
Companies also need to consider utilizing numerous recruiting channels, which may include hiring a recruiting specialist or company. In the case of very small companies, the owner or manager might take on this assignment and learn by doing.
The “hiring specialist” should have qualifications and skill sets enabling them to perform beyond the original boundaries already established by the company. Simply, pirating crews from competitors or offering higher pay scales is not a worthy solution.
Special consideration should be given to resumes from applicants who have backgrounds that include executive responsibilities, hiring and training others, along with current or past relationships (employment and otherwise) with home improvement or remodeling companies.
Other important factors include a measurable behavior skill appropriate to the job requirements (hiring assessments including the DISC Profile), the ability to speak multiple languages, or a background with a large successful company in a similar role. Remember a quote from former president Ronald Reagan: “trust but verify.” In short, finding the right fit is highly important, so do not take everything you read on a resume or hear during an interview at face value.
Incentives to Make This Work
New hires require a compensation system that is heavily predicated on rapid success, which can be defined by goals, fulfillment and responding to the ongoing needs described above. The compensation system also must include contingent benefits incentivizing your personnel to stick with your company.
You should also create unique plans for contacting viable prospects through third-party references, including emails and letters to employees, vendors, past customers and other contacts. Create powerful 3-minute Zoom videos to post on social media and otherwise circulate. All communication should include a positive message beneficial to the community.
Modern recruiting requires new thinking. The new hire’s role is defined by an upgraded job description because they are recruited based on required skills that extend beyond their background.
Expand Your Thinking to Realign Your Workforce
Companies also need to evaluate their business model and implement methods to increase the size of their current crews by recruiting those who are familiar with home improvement products and their installation. Target your postings toward experienced home improvement crew members who may desire to be self-employed (if your program is based on 1099 installers), and those who are willing to work with an existing crew on an apprentice basis as a start.
Once you understand the critical differences behind installing other products versus the products your company sells, have new hires sign an agreement to become an independent contractor for your company, which allows you to buy a truck and equipment and lease to them for three years. After this they would have the option to buy them from the company or continue to lease.
A side benefit to this is utilizing the depreciation to benefit your company. If you decide to lease these items have a tax-savvy attorney who is familiar with the industry review your intent and methods with respect to current law regarding independent contractor status. If you can’t locate one, contact us.
Creating a Strong Installation Workforce
To maximize the value of this position, create benefits based on production (contracts installed) as well as positive customer satisfaction surveys. Your hiring manager should be appraised for their ability to understand the need for modern, systematic telephone scripts, and challenge-oriented interviewing methods (again, using DISC behavioral profiles).
They should also be responsible with quotas for the number of interviews, those hired and retained, plus the progress of new hires. The specialist should participate in a training program with crews in the office and the field and ongoing incentives to third parties or organizations that provide leads or prospects who are hired and retained.
While this may seem like a lot to absorb and put into practice, a sound business is not built overnight. Your business (large or small) wasn’t either. This is a great industry that you and your company is a part of. To quote Dr. Norman Vincent Peale: “Tough times don’t last; tough people do.” QR
Dave Yoho Associates is the oldest (since 1962), largest and most successful consulting company representing the home improvement and remodeling industries. The firm designs and institutes programs described in this article for large and small companies. It consists of a team of account executives who consult for retailers, manufacturers and service providers. DYA also offers training seminars and a full line of educational products. Their forthcoming Home Improvement Profitability Summit is scheduled for February 1-3, 2022. For a complimentary consultation, contact them at (703) 591-2490 or email@example.com.