Contractors Talk Employee Retention

November 26, 2007
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At the residential contractors forum, John Garofalo, general partner with Callahan/Roach and Garofalo, said that recruiting and retaining employees was the biggest topic today in the residential HVAC market.

LAS VEGAS - The biggest challenge facing residential HVAC contractors is not a new one. In fact, it has been at the top of the list for several years. It is the recruitment, training, and retention of residential service technicians. That was one of the topics discussed at the Residential Contractors Forum at the Sheet Metal and Air Conditioning Contractors National Association (SMACNA) meeting in Las Vegas.

John Garofalo, general partner with Callahan/Roach and Garofalo, introduced this topic and several others to SMACNA contractors in the audience. He started by saying that “there is no silver bullet in recruiting - not many people are coming into the industry.”

He asked what was so intriguing about the HVAC industry and why anyone would want to come into it. “Somebody in your company needs to spend one-third of his or her time recruiting new people,” Garofalo said. “Normally we only recruit when we need to fill a position. We have to get more proactive and recruit all of the time.”

He asked for audience participation and one contractor said he worked in the San Francisco area with a summer intern program. “People are hired in at $10 an hour and no benefits,” the contractor said. “We were able to screen out some people after four months of training. Ten dollars an hour is worth the investment.”

Garofalo added, “We think we are in the HVAC business but we are really in the people business.”

Garofalo suggested that, unfortunately, some business owners feel that they are being “held hostage” by their employees. “You are afraid that if someone leaves, you will have to fill in for him or her,” he said.

He did make some suggestions:

• Give a signing bonus to new employees and a recruitment bonus to any employee who referred the new worker.

• Develop a culture of professionalism that includes wearing protective clothing items like plastic gloves and booties while in customers’ homes. Techs should always start their explanations to customers with “in my professional opinion” because they are professionals.

• Read a copy of “Nuts,” the story about Southwest Airlines and how they developed a fun culture for employees.

OTHER ISSUES AFFECTING RESIDENTIAL HVAC

Garofalo talked about the merits of flat-rate pricing. “It exists today because customers wanted it,” he said. “They wanted to know that if we were so professional, why couldn’t we send them a tech who could give them a price, get the job done, and move on.”

He noted that some techs don’t like flat-rate pricing because of their own checkbook mentality that is, “If I don’t have that much money in my checkbook, the customer won’t either.”

While in the customer’s home, Garofalo recommends that techs do a complete diagnostic rather than just repairing the obvious problem. “You don’t want to be called back to fix something you should have checked in the first place,” he said. “Your callbacks should only average 2-3 percent of your calls.”

He said that in the residential new construction market, it is important for HVAC contractors to count every penny they can - and it starts with the installers. “You literally have to count the number of sheet metal screws you use,” Garofalo said. “Do you know about gold duct tape? That’s the roll of duct tape your guys leave behind on the job. Our field people don’t understand that they are the money makers in the company. They control profitability and they should have a system in place for accountability.”

Lastly, Garofalo talked about technology and the need to keep up with the latest gadgetry. “Don’t use technology as the saving grace,” he said. “You can’t be everything to everybody using every kind of emerging technology. Find out what you do well and keep doing it.”

Publication Date: 11/26/2007

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