Love's Labour Lost
In the past, "blame the economy" has been directed at such ills as inflation, a dismal profit margin, higher taxes and having to lay people off.
These days, the economy is fostering woes at the other end of the scale. A nation of newly rich Internet professionals and upscale baby boomers are deciding that they, too, want a professional-style range, a granite countertop and a two-person bathtub with shiatsu-massage whirlpool jets.
But, the resulting building boom is causing many designers, remodelers and builders to turn down work, expand too hastily and scramble to find capable employees to execute their existing projects, according to design firms surveyed by Kitchen & Bath Design News.
A dearth of talent
"The labor shortage in the high-end kitchen market has always been a problem," declares Sam Warwick, owner, Living Spaces Inc. Kitchens and Baths, in Sylvan Lake, MI.
'"You have to determine what is a great kitchen designer. There are a lot of people out there who are certified kitchen designers who don't have enough architectural experience. They put boxes on the wall but they don't create a wonderful kitchen [with] a sense of design and proportion and color."
Attracting quality employees is a "challenge," agrees Lori Jo Krengel, president of the St. Paul, MN-based Kitchens by Krengel; however, she believes that a firm's longevity and good reputation can make a big difference in attracting employees.
"It's been a bit of a problem," concurs Jeff Cannata, CKD, Designers Showcase Kitchens and Baths Inc., in Carol Stream, IL. Cannata, who knows about the labor shortage not only from his own experiences but from his contact with industry colleagues (he is president of the NKBA's Chicago Midwest chapter, and a member of the national board of directors), notes, "We couldn't get too many good designers, so we developed a 'farm system.'"'
Cannata's company recruits NKBA-endorsed design students to work with the firm's more experienced designers, to good effect. "Right now, I have a design student working with me, and she's excellent," he notes. "[This approach] gives me an opportunity to see what's coming up in the design field, and also gives me an opportunity to snatch them," he laughs. "If I can bring them through the ranks, everything from design to how we run our business, they're learning it the way we want them to learn." The student participates in all aspects of a project, from pricing to meeting with the client, he adds.
Tom Trzcinski, CKD, CBD, of Kitchen and Bath Concepts of Pittsburgh, in Pittsburgh, PA, also recruits from a design school for drafting positions, though "the way the higher-end design firms need people now, they can go at a starting rate a little higher than we can offer. But, we're doing okay. When we find someone good, we try as much as we possibly can to keep them." He's also sharpened his interview techniques. "We ask more questions and make sure they're interested in residential [work]," he states. "[We] try to get individuals who want to work as a team."
"We're not a training showroom," counters Kelly Lloyd Stewart, CKD, of Kitchens by Deane Inc., in Stamford, CT. "We can't bring in a neophyte and groom them slowly. We have to get people who can step right up to the plate we need to steal from another showroom. We're running 100 miles an hour and just can't properly mentor someone the way we used to."
"We've gone the skilled route," adds Bryan Zolfo, sales and showroom manager for Insignia Kitchen and Bath Design Group Limited, in Barrington, IL. "We're at a point now where we could use somebody to learn the business, but we haven't found the right person, and we're not aggressively looking. We've talked to some of our subcontractors [about it], but to run an ad for somebody unskilled it's just too time consuming to find the right person."
But Cannata says that in his market, experienced designers already have a job. "I can't tell you the last time I had a CKD call me and say, 'I'm looking for a job,'" he notes.
"And, if someone is bouncing from company to company, my thought is, why are the bouncing if they're so valuable?"
For experienced design staff, networking seems to be the method that garners the best results. "We've run ads for designers, and had much better luck with word of mouth, and through associations," says Zolfo.
"We've gone headhunting," adds Stewart. "We'll put out feelers to a whole variety of people appliance distributors, architects, cabinet manufacturer reps plus our own grapevine of relationships throughout the industry."
Warwick adds that a European-educated designer who's proven to be a great asset located their local newspaper ad on the Internet.
Outsourcing to independent designers is another option. "I'm in an amazing position," admits Tracy Scalzo, CKD, CBD, of Sarasota, FL. "I'm an independent designer, I have no employees, I have no intention of having any employees." Today's boom market motivated Scalzo to leave her award-winning stint at Eurotech Cabinetry, which continues to use her for projects. "Most of the work I do is for other kitchen dealers," she says. "This labor shortage is probably what keeps me in business. I was fortunate that I had established a reputation before I left, but I left on a wing and a prayer," she laughs. "I haven't advertised, or spent a penny, but the phone rings. I've turned stuff down."
Scalzo thinks outsourcing is a great solution for employee-starved businesses. "I'm probably a lot less expensive to maintain than a full-time employee," she explains.
But Trzcinski hasn't had good luck with hiring independents in his market. "They're not advanced enough for what we do," he believes.
One of the keys to success in today's competitive market is retaining good employees once you've hired them. To that end, Krengel notes, "We've had many employees who have been with us for 20 plus years we value that experience, and try to reward them for that by offering competitive salaries, extra vacation time, more flexible hours or shorter work weeks." She also suggests "creating positions that make employees feel empowered," and she notes that, above all, "If you have a good employee, let them know they're appreciated!"
While young, right-out-of-school hires are traditionally seen as the most obvious source for new employees, some employers report success from less traditional avenues. Notes Trzcinski, "Right now, I'm trying to stay away from youth. One of the top people in my firm is a woman who, after her kids went to school, went back to school and got her degree. She's in her forties and just doing a bang-up job running the design department."
"People coming out of college now, they don't have that old-fashioned work ethic where you go to work for a company and spend the rest of your life there," adds Glenn Brody, of the Bronx, NY-based Kitchen Solutions. "They want to move on."
Besides salary, benefits and work atmosphere also play a major role in keeping employees. Cannata cites a team orientation, and bonuses based on performance as inducements. Stewart, who insists his company doesn't have a labor shortage problem, explains that "we have a pretty nice set of benefits a 401K package, good insurance, co-pays, a vacation package. Plus, we have a nice, positive working environment. That can't be overstated. You can pay people and give them benefits, but if you treat them like dirt, they're still not going to be happy. We have a team approach with weekly meetings for all personnel, anything is put up on the table. That makes all the difference."
Additionally, getting the "right fit" is key, according to Krengel, since "mis-hires" can be expensive in terms of wasted time and training. To avoid potential bad fits, she suggests "careful interviewing, checking references and seeing photos of projects they've worked on," as well as inviting potential employees to job sites to help them get an idea of what you do."
But, it's not just designers or salespeople where labor shortages are a problem. Many firms are struggling with a shortage of support staff to handle an increasingly computerized industry. "Our major problem is order processing," declares Brody, whose company specializes in ultra-high-end appliances. "The industry has gotten more complicated, and everything has to be done on computer. You used to be able to send in a written order, [but] more and more companies are going strictly Internet. It requires a very competent order processor [and] it's a learning curve; it takes them six months to become really competent on [some of the manufacturers' programs]."
Brody recruits through New York Times help wanted ads and networking, but complains, "You have to train them and before you know it, they move on." He recalls an employee who got an offer of a $20,000 salary increase from a competitor, "and he was making a good income with us. For that, I'd move," he admits, concluding, "Sales are not a problem we can sell an unlimited amount of product, but we can't process what we sell."
Others agree that the advent of computerization has its positive and negative aspects. "We use the 20/20 system [to design], but we still do all of our pricing with paper and pencil," says Cannata. "I always like to double check and make sure it's right," especially with custom work and modifications. "A lot of the cabinet manufacturer's vendors, who provide the catalogs, aren't as current as some of the programs."
Zolfo says he has three design programs, but uses them only for pricing. "The drafting quality just isn't there," he complains.
In other areas of the office, computers seem to be an asset.
"We've spent almost $60,000 on computers," says Trzcinski. "We're Internetted and inner-netted we're all networked. There are 10 different computers even our shop guy is on computer."
"Our project management function has increased our efficiency,
turning jobs over quicker and [being] more organized," adds Zolfo.
"Also, streamlining the paperwork and adding some support to our
designers increases their productivity."
The best design won't help you if it's installed incorrectly and the most frequently heard complaint among firms surveyed was finding good subcontractors.
Jeani Lee, owner, Kitchen, Bath and Home, in Ames, IA, recalls this horror story about a company that she checked out thoroughly. "They took on too many jobs, and didn't have their key people on the job, which was out of town, so I didn't visit it every day," she notes. "The painters didn't bother to take the packing stuff off of the new doors and painted right over it. [They] painted over all of the tracks on French doors, and didn't sand in between coats of new wood. By the time I got there, they had done enough damage that it was going to take more time to redo and repair it than to do it right in the first place."
Eventually, the subcontractor was fired and another company fixed the job. "We didn't end up in court, but it was an ordeal," Lee recalls.
Those surveyed agree that, when it comes to installers and subcontractors, smaller is better. Stewart says his company uses one- to two-man crews. "We don't work with any large companies that have big overheads. We do all of our own internal scheduling, supervising, organizing" and handle the cabinetry and appliance installation, subcontracting the rest.
"We've basically added to our staff whenever we could find the right people," says Zolfo. He describes the company's in-house installation team of four as "jack-of-all-trades" whose skills include plumbing, electrical, drywall, tile and Corian.
How does he keep his installers? "Pay them and pay them," he laughs. "We do mid to very high end, and if the quality's not there, saving money on the person is throwing good money after bad." He also encourages the installers to get their CKBI and "keep them involved in the loop. We try to make them feel like they're an important part of the team.
We're fortunate to work with some very exclusive homes, and it's kind of fun for these guys. They take a lot of pride in their work."
Adds Stewart, "[Subcontractors are] looking to give us an invoice, be paid quickly and be given another job promptly, and have us coordinate well with them so they can be productive. We have a good supervisory staff that's a liaison between our designers and subcontractors to keep them moving on the job."
Zolfo explains that some of his best installers were skilled craftsmen who tried having their own business but found they hated the sales and administration end of it, and welcomed being able to re-focus on what they really liked to do.
Similarly, Cannata has had good results in recruiting home framers who are often also skilled at interior trim, offering employment during their usually slow winter months. He also gets recommendations from other carpentry crews, and zeroes in on any capable crew members who seem ready to change companies.
In finding prospects for out-of-state projects, Lee does physical inspections of a subcontractor's work. "Of course, they won't send you to the ones they [messed up]," she laughs. "I ask around as much as I can," surveying area realtors and her clients. "I like to find people who have done more remodeling than new constructions. They have to work with so many different parameters, so they're a lot more creative."
Even with good people, designers caution that sometimes a subcontractor takes too many jobs, and spreads himself too thin. "They hire more people and don't have time to train them," complains Lee. "We're in an industry that requires craftsmanship, right down to the plumbers. It's not just slapping a valve up on the wall. It seems like the bigger the outfit, the less likely they are to be able to do customized work."
Zolfo notes a tile installer that has up to 30 crew members, but "there's maybe three guys we've ever used," he explains. "He knows when he gets a job from us, he's gotta send his A or B guy. If I have a negative complaint about an individual, they know from that point on that guy is not allowed on the job."
"We've told our guys, we'd rather you struggle along till you find the right people," adds Trzcinski. "Try to restructure things and have their guys work some overtime." Still, his company has cut down on less profitable remodeling jobs. "We're just doing the jobs we can physically handle. In this business, the money's in the box" the cabinetry, he notes. He adds that he makes people commit to jobs, in writing, early on in the project.
"That way, there's no pull-out," he explains.
Brody also emphasizes the importance of developing a strong, ongoing relationship with a subcontractor. "Even though they're independent, we [comprise] 75%-100% of their work. We recommend the installer and guarantee the installation even though we don't get commission. So it works out for both of us there's a loyalty."
"You get a rapport," concurs Cannata. "Jumping around doesn't
help anybody." KBDN
Labor Trends at a Glance
- While some companies find the current labor shortage to be an enormous problem, others see it only as a minor irritant, and some report no real problems at all.
- Opinions vary as to which job is hardest to fill though finding quality designers, order processors and installers/subcontractors is frequently cited as a source of difficulty.
- Opinions vary as to whether it's best to hire apprentice/ students or experienced designers, with both offering advantages and disadvantages.
- Word of mouth seems to be the most popular way of finding new employees, though some firms report having success with head hunters, newspaper ads and the Internet.
- Generous pay is a must for attracting and keeping good employees; benefits packages are secondary in most cases.
- Many employers are increasingly turning to older employees, believing them to be more efficient and loyal than those just coming out of school.
- Subcontractors that start off by doing good work often prove to be problematic on subsequent jobs when they try to expand too quickly and hire inexperienced workers.
- High-end work requires specialized skills that commercial or track home work doesn't, requiring particular care in selecting both designers and subcontractors, employers report.
- Checking references of subcontractors isn't enough field visits to former jobs are a must.
- Design firms report that remodeling specialists generally are more skilled than new-construction workers
- Computerization is helpful in streamlining a business, though most surveyed find some aspects of them wanting, and still do many functions the old-fashioned way
Suggestions for Finding and Retaining Great Employees
- Use your networking skills to prospect for new employees, since these employees tend to be "pre-screened."
- Consider instituting an intern program in conjunction with local colleges' design programs, in order to recruit students before they are out in the work force. Interns are less expensive than design school graduates, and this gives you "first crack" at them when they are done with school and ready for full-time employment.
- Develop lasting relationships with subcontractors whose work you are happy with; they will, over time, begin to function like "employees" in that they will know your firm's needs and requirements and have a loyalty to you and your customers.
- Look for smaller subcontracting firms over larger ones; these frequently provide more personalized service.
- Offer generous pay packages, but don't neglect to consider the impact of a positive, pleasant work environment in retaining employees.
- Consider outsourcing to independent designers as a strategy to address work overflow.
- Computerize in-house functions wherever possible, since this can sometimes cut down on the number of employees needed.
- Consider bringing installers over from related fields, for instance, home frame builders to do interior carpentry during the winter months.
- Instead of hiring trainees right out of school, consider hiring older employees, senior citizens or those who have been out of the work force for a while. Often, older employers are more appreciative of the opportunity, and possess an "old fashioned" work ethic that can enhance your business.
- Look for people who have done a lot of remodeling work. They have to work with so many different parameters, they tend to be more creative, having learned by necessity.