Managing trade contractors is an integral part of the remodeling process, so much so that the success or failure of a remodeling venture could well hinge on how astutely this aspect of the business is handled.
Key to managing remodeler/trade contractor relationship is communication — making sure that information is readily available and shared and that expectations and requirements are clearly stated from the start. Those were themes repeated by remodelers to whom Qualified Remodeler spoke.
John Todd, president and owner of Elite Remodeling in Frisco, Texas, notes that his company has quarterly meetings with all of its trade contractors to make sure they understand the company’s business philosophy, quality standards, safety procedures and other issues.
Equally important is the almost daily communication between the trade contractors and Elite’s staff. “Our project managers meet almost every day with every trade contractor, in addition to clients, and talk to them about what we’re doing, where we’re at in the schedule, what materials they need, and quality issues or other concerns,” Todd says
In addition to communicating during the job, Elite involves trade contractors in the process as early as possible. “We bring the trades to the table and have them go through the design, whether it’s blueprints or drawings or photographs of the job, and explain to them what we’re going to do. We get them involved early on in the process so they’re not surprised when we win a job where we have to move a gas line or trench into a foundation,” Todd relates.
It’s all part of constant and effective communication, whether you’re talking to a trade contractor face to face, over the phone or by e-mail. “You can’t assume somebody understands what to do. Our sales staff has to have good drawings whether it’s a simple backsplash or the wiring plan for a room addition. You have to have good documentation and the ability to share it with people,” Todd says.
Emphasizing the importance of project management in producing a project with extensive use of trade contractors, Todd notes that Elite uses a mainstream project management software tool that has strong resource management capabilities and the ability to create Gantt charts that are flexible and useful.
Communicating with trade contractors is crucial to the success of the relationship, agrees Paul Eldrenkamp, owner of Byggmeister, a design-build remodeling firm in Newton, Mass. While Byggmeister does use a Web-based project management tool, Eldrenkamp puts a great deal of faith in more traditional methods.
“For the most part what we do is put together a really good job book,” he says. “I hate to sound old-fashioned, but if you’ve got good drawings, a good contract, a good budget, a good schedule and a good list of contact information, you can set up a project so that it runs for weeks without the office hearing a peep from the jobsite, apart from time sheet reporting and job cost accounting.
“I think technology can sometimes be a substitute for planning,” he adds. “We just haven’t found a substitute; there isn’t a good technology tool that replaces a really solid three-ring binder with all of the information you need to run a project. All your questions are answered in the job book.”
What’s in Byggmeister’s job book? Really just “standard boilerplate stuff,” says Eldrenkamp. “It’s the drawings, the contract the specifications, the budget sheet, the schedule, a list of contact information, some blank forms, and a few checklists.”
“There’s nothing in there in the least bit surprising. The only thing that might be unusual is the extent to which those documents answer questions before they come up,” he continues.
The reason for that, Eldrenkamp explains, is that during the design process he tries to anticipate potential questions. “We know that some questions will come up inevitably during construction, but we don’t say we’ll figure it out when we get to it. We really try to define the outcome we’re looking for — this is the game plan.”
In addition, trade contractors “have been able to provide input during the design process to make sure we’re not asking them to do stupid things. If we give them the work space they need and treat them with respect, you don’t have to do a whole lot more than that to keep their loyalty. We make it easy for them to do a good job, that’s the bottom line,” he adds
Communication — and not assuming everyone knows the same information — is important, Eldrenkamp advises, but it’s more than just communicating well. “It’s about communicating better and better each time you do a job,” he says. “That’s the sort of thing that really gets you loyalty from trade contractors — steady improvement. If they have a sense of forward progress, they’ll be much happier with you than if they feel it’s the same old thing over and over again.”
Eldrenkamp advises remodelers to be clear on what the expectations are on all fronts — not just on what work is going to be done, but when it’s going to be done, who is responsible for providing materials, who is responsible for cleanup and what the contractor can expect on the first day on the job.
“You’re going to make mistakes,” he cautions. “Keep track of the mistakes you make and put them into a checklist that gives you an opportunity not to make them a second time. For instance, do a plumbing checklist. These are things a plumber needs to know before he starts work; these are problems that can come up during that phase of the job.”
Joe Dellanno, president of my Design/Build Project, a Web-based communication application for design/build teams, also places a great deal of emphasis on communication and project management skills.
It was, in fact, the challenges of communicating with trade contractors and other players involved in a large project that prompted him to develop my Design/Build Project.
“I had had enough of trade contractors calling me every day for information they had already been issued; they just didn’t have a place to put it,” he said.
But Dellanno says he wanted more than that. He wanted something that was more of a business model for the design/build process, something that had checks and balances as well as hierarchies of people in the system, including the homeowner, vendors, suppliers, designers, trade contractors and other involved in the project.
His goal was “taking a company that doesn’t really have a lot of business systems and get them to not only use these business systems but to get their employees — and their trade contractors and their vendors — to actually write these systems for the company so that they would own the systems themselves.”
When you’re talking about communication, Dellanno says, “there needs to be a place where things can be recorded, measured and transferred — those are the key elements to communication.
Not all communication is technologically based, however. “I make it my business to know who’s on a jobsite. I learn their names, what they’re doing and spend time talking to them, because when I do that I have opened the communications door to a trade contractor. He’s the guy who’s actually going to be doing the work, and if I’ve got him on my side, we’re going to be good; but if I come on to the site and I kick him around like a piece of scrap wood he’s not going to be too happy,” says Dellanno
“My philosophy is you can’t get mad at anybody if you haven’t told them what to do. I think the burden starts with the general contractor. The general contractor has to be a leader — that’s why they call him the general — and I feel that he has to be a clear concise leader to his troops both internally and externally,” Dellanno says.
One Hundred Percent
Successfully managing trade contractors also is about building and maintaining relationships. Most remodelers surveyed by Qualified Remodeler said that they employed the same trade contractors over a period of time, so while these contractors are not direct employees, a close working relationship develops over time. Those relationships can be among a remodeler’s most valuable assets. That is no doubt the reason John Todd of Elite Remodeling calls the trade contractors he works with business partners.
However, the degree to which remodelers employ trade contractors as opposed to maintaining their own crews varies greatly. Elite is at one end of the scale with 100 percent of the firm’s work completed by trade contractors.
“We have office staff, sales staff and project managers who manage the jobs that the salesmen sell. We’ve never had lead carpenters,” Todd says.
Not having the burden of salary and benefits when work is slow or there are gaps in schedules is basically the reason that Todd chose to rely exclusively on trade contractors to produce his projects.
If the quality of the work a trade contractor is doing is deteriorating or he’s showing up for work late, “we’ve got guys standing right behind him ready to work and who are qualified and probably just as good,” Todd says. “We look at it from a standpoint of getting the best possible trade skills and only having to employ them when we need them,” he adds.
Finding qualified trade contractors in the Dallas market is not difficult. “There are lots of cabinetmakers, tile setters, granite or marble fabrication companies, or whatever you need,” Todd says.
The hardest job to fill is the internal position of project manager, he notes, and that is because it is so crucial to the process of communicating with trade contractors to produce a successful project.
“The job of the salespeople is to understand the requirements of the job and make sure the estimate is bid accurately. The construction team has to build it, but the project manager has to understand construction — everything from structural to minor carpentry — and has to have a unique ability to sit down and map out a schedule and coordinate a variety of complex events and watch the financial aspect of the project as well,” Todd says. In addition, the project manager must effectively communicate with the client.
For Elite, the successful project manager almost always comes from a construction background, most starting out as laborers and working in a variety of construction positions for local remodelers or home builders.
It’s unlikely that someone with project management experience in a different industry would succeed, in Todd’s opinion. “We’ve looked at some very skilled project management people who may have come from the telecom industry, for example, and what we can’t teach them is quality control and the pure nature of the construction business.”
Persons with construction experience can learn communication, financial and scheduling skills, but Todd hasn’t found the opposite to be true. “We have to start with construction,” he says.
Mix and Match
By contrast, Byggmeister Inc. uses a mixture of direct labor and trade contractors. For the most part, the company does its own framing and finish carpentry, says owner Paul Eldrenkamp, but uses trade contractors to supplement his own crews for carpentry work when there is a lot of work pending.
He typically turns to trade contractors for plumbing, electrical, painting, plastering and related jobs.
“Our problem with that is we’re a design/build firm, and we have a very high standard of what it takes for a project to be ready to start. We’d rather delay the start of a project than start with inadequate information,” he says. That means there’s some uncertainty over exactly when the job is going to start, and it’s tough pinning down a framing contractor who may be booked three or four months in advance, Eldrenkamp explains. “We really need the schedule control over the labor force that having employees provides,” he says.
Byggmeister frequently works with the same trade contractors. “We’ve been in business for 25 years, and we’ve settled on a steady group of contractors that we use over and over again. We try to have two of three contractors in each trade, partly for scheduling reasons and because sometimes we have to get a second opinion on how much a project should cost,” Eldrenkamp says.
One of the primary sources for finding new trade contractors, in Eldrenkamp’s experience, is other trade contractors. If a plumber runs into the same electrician on multiple jobs and sees that the electrician is really good, the plumber will tell us about it, he notes.
Another avenue is homeowners who express a strong preference for a particular trade contractor. “Somebody who inspires that kind of loyalty gets our interest,” Eldrenkamp says.
“We try to minimize the extent to which we use new subcontractors,” he says, “because one of the things we’re selling is a team. But on occasion we’ll make an exception to that rule. If the homeowner is really fond of someone, we’ll try to work with them, and if it works out, it’s a great way to find new trade contractors.”
Eldrenkamp doesn’t use meetings, social events or bonuses to retain the loyalty of his trade contractors. “It’s mostly providing a quality work environment, giving them a project that’s set up for success rather than one where they can’t figure out what’s going on. The scope of the job is clear; the job is ready for them when they show up; they have access to all the information,” he says.
“The same things that keep your crew loyal will keep your trade contractors loyal,” Eldrenkamp says.
Regardless of the percentage of work done by trade contractors, some factors seem to apply across the board. The remodeling industry is all about relationships, Dellanno says, and some of those relationships can become dysfunctional.
The relationships may progress in stages. First, says Dellanno, is the honeymoon stage. A trade contractor working for a remodeler for the first time is on time; they show up; everything is great; they dress well; they speak well; and the remodeler is in seventh heaven.
But remodelers get lulled into a false sense of security. Over time the trade contractor who once seemed so professional turns out not to be so polished. “They don’t make their bed in the morning; they don’t pick up their clothes,” Dellanno explains, continuing the marriage analogy.
“The really become very juvenile at some point. They don’t call; they don’t communicate. They’ll be very unprofessional, and they’ll try to get away with things,” he says.
Remodelers, who frequently use the same trade contractors year after year, may enable this behavior because they don’t want to look for another contractor. A lot of contempt is built up by not calling trade contractors to task, Dellanno says. “It takes a lot of time and energy out of a day to deal with these dysfunctional relationships,” he warns.
One of the first things a remodeler should do is to make sure they have a rock-solid trade contractor — or business partner — agreement, Todd advises. That agreement should address issues such as safety and OSHA, general operating procedures, work hours, keys, lock boxes, and so on.
As for selecting trade contractors, Eldrenkamp sees two approaches. “One is to hire people who have your standards to begin with; the other is to hire people who don’t and try to train them to your standards. It’s much less work to hire the people who have the standards you’re looking for to begin with, even if they cost a little more,” he concludes.