Solutions to HVAC Labor Crisis

November 12, 2007
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[Editor’s Note: This is the first in a series of articles about how the HVAC industry is addressing the labor shortage issue.]

Many HVAC contractors have come face-to-face with the unthinkable: customers who can’t get service because of a shortage of qualified technicians. An all-too-common sight is lost revenue and lost goodwill because a contractor can’t send someone out on an emergency no-heat call or to repair a broken air conditioner.

Some contractors make up for a lack of qualified technicians by hiring anyone who can turn a wrench. Their employee roster contains a lot of bodies and not enough good technicians. While those bodies may be more affordable when it’s time to make payroll, they are likely to create enough callbacks to make them a liability rather than an asset to the company.

Sound distressing? It is - and it is a situation that has played itself out for several years in the HVAC trade.

THE FIRST STEP: RECRUITING

It isn’t easy recruiting when there is a negative perception of the HVAC field. Chris Colditz of LACO Mechanical Services, Elk Grove Village, Ill., knows that all too well. “I am completely shorthanded and am hearing from other companies, both large and small, of their shortages, too,” she said. “Few techs want to get up in the middle of the night for service calls, and we see many techs doing side jobs, which further destroys the market.”

Fighting the perception and the reality of working in the field are just two factors that hinder recruitment. With so much competition for new hires and so few avenues of recruitment, HVAC contractors are always looking for the magic potion to call attention to their own businesses. To some, offering a competitive wage and benefit package is the key. But in order to do that, they must be on solid ground, profitably speaking, in order to provide a good entry-level salary.

“We have also found that the best way to attract and keep professionals is to charge enough for our services that we can in turn pay good wages, and provide excellent benefits, and provide late model vehicles, paid vacation, paid holidays, and 401(k) with matching contributions (50 percent on the first 6 percent) and a profit sharing component,” said Craig Jones of Slasor Heating & Cooling, Livonia, Mich.

Brian Leech of A Leechman Heating & Cooling, Des Moines, Iowa, and NEWS consultant, said that a solid wage and benefit plan is important but not the only thing that is necessary to recruit the best in the business because some techs hop from company to company just to get another 50 cents an hour.

“Owners need to stop the cycle of retread technicians,” he said. “The way to stop it is spend more time focusing on training and attracting great people to our industry. I know we don’t have a shortage of people who want to get in the trade. We have a shortage of contractors willing to train.”

Another contractor, Ben Stark of Stark Service Co., Hurst, Texas, said he does not look for workers who move around from contractor to contractor, developing problems along the way.

“We like to develop our own techs,” he said. “We offer our own training program, and have an in-house training lab to bring techs in that have little experience.”

One successful recruitment strategy used by HVAC contractors is to find people that have excelled at jobs outside of the HVAC trade but are looking to make career changes. As one contractor said, “people who are at the crossroads of their lives.” Being able to find these types of people takes a little digging, referrals from workers, and a solid interview process.

“We look for applicants who are willing to change to improve their income and career opportunities,” said Larry Sinn of the Service Company, Greer, S.C.

“We test thoroughly to make sure that they can do what we want done. Then we begin to train by starting them in installation. We have set up online and training center courses that they can do individually. Completion of these units shows who wants to move forward. Being employed as an installer in our business shows whether they are willing to do what needs to be done.

“And we can observe how they treat their fellow workers. How they treat their peers is generally an accurate indicator about how they would treat our customer. We take time to train and observe before we take the step of putting them in a van and handing them our company’s reputation.”

Depending on employees for referrals is also a great way to find quality workers. “Our current employees recommend many of our young men or we find them in our everyday lives in stores such as the supermarket, Starbucks, etc.,” said Ed Blum of A.O. Reed & Co., San Diego.

“If they have a great personality and are mechanically inclined, we hire them and teach them the technical and mechanical skills needed for their position. Hire for the personality and train for the technical.”

One key factor in recruiting workers is the interview process. The actual process begins at identifying the right prospects and then putting them through on-the-job testing to see if they are the right fit.

“We use a combination of screening tools before making a job offer,” said Ann Kahn of Kahn Mechanical and NEWS consultant. “The job application, which includes a brief technical test, is first and foremost as it gives us information to check out the applicant. All applicants sign a statement acknowledging that any information they give may be checked. References are always checked, as well as background and driving records through an Internet service. Many applicants are weeded out here.

“When information gathered is positive, the applicant is scheduled for a personal interview. If the interview is positive, the applicant is sent for additional background testing, drug screen, and aptitude testing, followed by a physical examination at an-other facility, provided the drug screen is OK. The applicant is given a conditional job offer prior to the testing and knows the offer is contingent upon test results. A second interview is then held with two managers present, and finally, with all ducks in a row, the job offer is made.

“The new employee is mentored for at least two weeks with another employee (rides with an established tech) to further instill our company values and methods of operation. The mentor provides his viewpoint on the new person’s technical skills and attitude.”

Laura DiFilippo of DiFilippo’s Service Co., Paoli, Pa., uses similar procedures because of problems her company has encountered as it has grown. “We have struggled to find the right people to get on the bus during our growth period in the last few years,” she said. “At first we hired bodies we had hoped would fit in our company culture, but it didn’t happen that way and was frankly a mess. But it made us aware we had a bigger problem than just finding people, we didn’t have a plan.

“So we developed a comprehensive hiring plan. It requires three levels of interviews, technical testing, personality profile, thorough background check, drug test, and goal-set job offer for the right candidates. Our new process takes more time and effort, but it weeds out the bad eggs. We revised our 90-day probation period, doing weekly coaching sessions with each new employee to keep track of their goal progress.

“We also made a pact that if any of the management team had an issue with a new hire, we had to stop and talk about it. And if the issue has warrant we cut our losses and move on. This was probably the hardest part because immediate managers didn’t always see things in their employees that others saw.”

THE SECOND STEP: RETENTION

Once HVAC contractors have successfully jumped over the first hurdle - hiring the best candidate for the job - their worries are far from over. Now they must do what they can to keep that person who they spent so much time and money recruiting, from leaving the company for so-called greener pastures. Retention can be just as vexing as recruiting and they are many reasons - some small - for employees to hand in their resignation notice.

“One of the biggest mistakes I see contractors do is overwork their employees,” said Keith Nickas of The Crown Group, Uniontown, Ohio.

“Contractors that have a weak customer base are more likely to see large fluctuations in their business as the weather changes. In a lot of companies, the owner is also the person running around trying to put out all the fires. Because he/she is putting in 18-hour days, the owner expects the same from their employees. In turn, the employees quickly burnout and feel unappreciated.”

Showing appreciation and having employees be part of the family are ways contractors retain their workers. Some have specific programs and goals they set for their employees. Nickas said his company monitors the hours that employees work, so as not to burn them out. Over the years they have monitored hours versus morale.

“We have found that a 36-45 hour workweek is where the employee is happiest,” he said. “You must have a strong service agreement base to provide consistency in hours worked each week throughout the year. A large service agreement base allows you to know how many man-hours are sold. By monitoring how many hours are worked each week - and how many man-hours are sold - you can now forecast when to hire a new employee before your current team gets burnout.

“Along with monitoring hours worked, we also don’t put any restrictions on when they can or can’t take vacation, plus our on-call rotation is daily instead of weekly. Having a tech on call for a week at a time is a sure way to burn them out. Think about it, would you want that tech in your house? He is overworked, has a bad attitude, and is representing your company. And you wonder why you can’t retain customers let alone employees.”

Jeff Somers of Monsen Engineering, Fairfield, N.J., and NEWS consultant, said his company takes a simple approach to retention. “Retention is a big subject as many of us use different methods,” he said. “Some are complex and some are simple. We take a more simple approach by providing a safe and pleasant workplace with opportunities to advance in the company, such as management and supervisory roles.

“We also have a recognition and awards program that allows fellow employees to nominate someone that has gone above and beyond. We have many company benefits that help our people further their education outside of the regular technical training that we provide.”

Could a concept such as keeping it simple be the key to retention? Yes, according to another HVAC contractor. “From many years of leading crews, owning my own business, and working all kinds of projects, the best thing a leader or owner can do is say thank you and mean it when the men and women working for them do a good job - and let them know how to do a poor job better next time,” said Dale Jacobs of Raytheon Polar Services Co., Centennial, Colo.

“The crew needs to know their efforts have value, that they are a valuable member of a great team doing great things, and not just making the boss more money. To be needed, counted on, and a part of a true team is very difficult to walk away from no matter what the circumstances.”

Mary Marble of Marble Mechanical Service LLC, Dearborn, Mich., and NEWS consultant takes a personal approach to employee retention. “I do simple things, like sending birthday and anniversary cards with gift certificates,” she said.

“When a tech has worked a lot of overtime, I send his wife a thank you note with a gift certificate to her favorite clothing store. I try to find what interests the associate and contribute to what is important to them. I just let all the associates know how important they are to our organization and say lots of thank yous and great jobs.”

One contractor said he takes personal service up a notch from normal. “Look for opportunities to help them in their personal life,” said Kevin Westcott of Family Plumbing, Heating & Air Conditioning, Gaylord, Mich. “One whole winter I snowplowed an installer’s driveway - it was something he needed that I could do.”

One contractor said that if HVAC business owners looked in the mirror, they might find out why they can’t recruit or retain good workers.

“The shortage is in competent owners not good workers,” said David Boelcke of Boelcke Heating, Stevensville, Mich. “Although there are also a lot of incompetent workers out there, it all goes back to poor owners not training them.

FEEDBACK REQUESTED: The NEWS would like to know your thoughts on worker recruitment and retention. Please e-mail Business Editor John R. Hall at johnhall@achrnews.com with your own experiences.

Publication date: 11/12/2007

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