Indianapolis contractors report a shortage of skilled workers
It’s a numbers game that would keep runners in Las Vegas busy. When owner Alan Winters tries to fill openings at highly rated Control Tech Heating & Air Conditioning in Zionsville, the 13-time Super Service Award winner needs roughly 60 days, 50 applicants and enough hours to interview each person three times. “By the time you do all the background checks, the driving checks, the drug checks — if you’ve got one guy left standing, you’re lucky,” Winters says. “Our hardest thing is finding someone who is not in the industry, getting them in, and keeping them.”
Winters says he’s fighting not only competitors, but society. Many young newcomers to the workforce are too focused on immediate gratification, he says. “Because they are used to it with their iPhones, their Androids and things like that,” Winters says. “They don’t want to have to wait for it or work for it.”
Shortage leads to increased costs
Hiring skilled workers, or keeping them on the payroll once they’ve been trained, is getting tougher, many Indy area service providers say, especially for jobs in heating and air conditioning, plumbing, electrical, roofing, drywalling or tiling. Local providers say homeowners will likely pay more this year for every home improvement project, from reroofing a home to remodeling a kitchen or bathroom due to factors such as: an aging workforce, with many contractors nearing retirement age; a retreat of workers from skilled trades into other careers following the 2008 housing bust; a shortage of young people entering those fields; and rising material and transportation costs.
Steve Smalley, president of highly rated Exterior Home Improvements in Castleton, says a roofing job that he used to bid for $225 a roofing square about five years ago, now goes for $425 a square. Like other employers, the 10-time SSA winner blames the price increases on having to pay more for materials, transportation and now labor. “I used to pay [workers] $55 to $60 a square for roofing,” Smalley says. “Now I pay $100 to $110 per square, depending on the pitch of the roof. My window installers make close to a six-figure income. For me, a small company, to get good guys, you have to have good pay.” According to the Indiana Department of Workforce Development, the median wage as of May 2011 for a roofer was $35,360; $54,995 for an electrician; $50,856 for a plumber; $42,265 for a general contractor; and $40,851 for HVAC.
The situation will likely worsen for contractors, experts say, as the economy in Central Indiana improves. Steve Lains, CEO of the Builders Association of Greater Indianapolis, says new construction starts in Boone, Hamilton, Hancock, Hendricks, Johnson, Madison, Marion, Morgan and Shelby counties are up 16 percent through November 2012, compared to the same period in 2011. “With just that small increase, we are already feeling a pinch across all the trades,” Lains says. “If the market comes back, it will create real shortages.”
Geoff Horen, CEO of highly rated The Lifestyle Group on the Southeastside, says the housing bust left employers like him wary of replacing staff too quickly, yet the need for qualified workers is legitimately straining the marketplace. To continue providing the quality of service his customers expect, the 13-time SSA winner says he pays his employees more, but also charges customers a bit more. “In the marketplace when guys would pay $12 to $14, we would pay on average $17 to $19,” he says. Angie’s List member Paul Ainslie says he didn’t mind paying Horen a little more for first-rate service. After hiring one provider who failed to properly repair, then replace, a faulty furnace, Ainslie says he had no qualms about opening his wallet if it meant the work would be done right. “In our case, it was in a January freeze … definitely something that if it had been 50 percent more, I wouldn’t have complained.”
Members who hire Brian Ashpaugh, owner and CEO of Westfield’s highly rated Ashpaugh Electric, know they’ll get quality work even if he’s not the cheapest electrician in the area, he says. “Once customers find [providers] who have the skills to provide them excellent service, I think people really value that,” he says. “If you set yourself apart, I think by and large, customers really appreciate the provider that goes the extra mile and gives them that service they can count on.”
The 13-time SSA winner also offers various employee incentives to keep good contractors on his payroll, such as companywide family outings to Indians games and an annual holiday party. He also rewards great work, including with what he calls an “Angie’s List attaboy.” If an Angie’s List member mentions an employee by name and raves about the great service received, Ashpaugh reads those notes aloud during monthly staff meetings, and gives $10 to the employee. The result, he says, is a fun, infectious way to keep service top-of-mind for everyone, and that, he says, benefits customers.
While current conditions are the focus for some providers, it’s the future that concerns others. Exterior’s Smalley says despite the promise of a good income, young people are less likely to pursue a career in a trade because of what he and others describe as a bias against skilled labor and a push toward earning a college degree. “I don’t think college is the answer for everyone,” he says.
The days of trades being handed down from generation to generation have largely passed, Smalley believes, so skilled labor promotion is growing increasingly important. “You’re not seeing third generation [workers],” he says. “Either they don’t want to do it or they don’t want to work that hard.” Consequently, costs rise for the employer, who ultimately passes them onto the consumer. “You have to increase labor [costs] because you want to build loyalty.”
Homeowners willing to pay more for quality work
Bill Flanigan is doing his best to promote skilled trades as chairman of the Industrial Technology program at Ivy Tech Community College in Central Indiana. He encourages young people to consider a specialized certificate or associate’s degree through the Ivy Tech program. “We average about 200 students in [HVAC] every semester, and all are getting employed,” Flanigan says, attributing not just the technical education those students receive, but the “soft” skills providers like Winters, Smalley and Horen seek in employees. Getting to work on time, working well with others, being properly groomed and dressed, and knowing how to communicate with customers are just some of the things that, along with good technical skills, get his students employed, Flanigan says. “Doing a job right and making a positive impact on consumers is highly valued,” he says.
That’s an economic axiom Zionsville member Mike Marine employed in hiring Control Tech employees to service his Stonegate home. He says he purchased a long-term maintenance contract with the company at a competitive price, and he’s thankful to find a company that he can trust to do good work. He says he’d rather pay a little more and save 10 percent to get good work, than save 50 percent and get bad service. “I’m not going to do that when I have someone who provides good service.”
Angie’s List member Doug Vyverberg shares Marine’s belief. Vyverberg, who lives in Home Place just south of Carmel, puts a premium on quality after paying one contractor $4,000 for what turned out to be a botched roofing job. To fix it, Vyverberg hired Carmel’s highly rated David Hazen Group, paying $5,800 for the team to redo everything. “They got it done, redid everything — it looks just gangbusters,” Vyverberg says. “We’ve not had a drop of water since.”
Duane Ward, field manager for David Hazen Group, says he goes through about 400 applicants to get one star employee. Like other contractors, Hazen pays higher wages to keep those folks on staff. He says he gets calls to fix other providers’ gaffes all the time, and those customers are more interested in having the work done well. “If you look at Angie’s List reports, you’ll see a lot of A’s,” Ward says. “People would rather pay and get the type of service and quality they get [from Hazen]. People will pay more, as long as it’s not astronomical, to have it done right.”
Vyverberg says he would consider paying up to 20 percent more just for the peace of mind of having a job done right — the first time. “It’s worth a lot more to us to have it done properly,” he says. “I’ve been down this road … None of us has enough money to make the same mistake twice.”
Be sure to check Angie’s List before hiring a general contractor, HVAC technician, electrician, plumber or roofer.