Contractor: The News must help industry improve

August 17, 2000
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We recently ran a series of articles in The News concerning why technicians are leaving their jobs. As expected, there has been mixed response to the articles. Some technicians have written, thanking us for discussing what they consider to be a poor situation.

Many contractors, on the other hand, have expressed (mostly anonymously) their dismay that we are even talking about technician dissatisfaction.

One contractor had an entirely different response. He didn’t care for the articles, because he felt that they only served to reinforce the belief that technicians do — and should — receive low wages. In his opinion, The News should only be focusing on how to move the industry up to the next level, and that includes increasing technician salaries.

Charge more for service

“This whole industry is sort of a joke,” says Ken Justo, president, ASI Hastings Inc., San Diego, CA. “Your article says that technicians are greedy, and they’re making $15 or $17 an hour. I live in San Diego. In my mind, I don’t know how a guy lives on $40,000 a year. I think our guys should be making $80,000 to $100,000 a year, and I think we should be charging our customers for it.”

Justo notes that many companies pay a computer technician between $120 and $150 an hour. Yet hvacr technicians also work on microprocessors in more hazardous conditions, such as hot attics and freezing basements, and they make nowhere near that amount of money. “As an industry, we ought to quit even talking about this. We have to be saying, let’s raise our standard; let’s raise the bar. One guy in your article comments that our margins are so slim. That’s a bunch of crap. Your margins are slim if you don’t know how to run a business. And that’s the problem with our business — most people don’t know how to run it, and they don’t know how to make money. Our company’s been in double digit profits for over 10 years.”

Justo says his company charges a flat rate of $128/hour. He proudly admits his company is one of the highest-priced residential contractors in the county, but he also says that it gives great service, and customers appreciate that. In addition, his technicians are well paid.

While his techs are not in the $100K/year range yet, Justo hopes they will be soon. “To be a really good technician takes 5, 6, or 7 years. An entry-level guy should be making $30,000/year. An average tech should make $50,000 or $60,000, and a great tech should make $75,000 to $100,000/year.”

Training and customers

In order to pay his technicians more, Justo spends a lot of time training them, which increases sales. When technicians go to service an older piece of equipment, they have the sophistication to talk to the customer and discuss the different programs the company has in place.

In addition to charging more for service, Justo doesn’t serve just anybody. He says to let somebody else have the guy who complains and doesn’t want to pay for your services, and instead, focus on the higher-end customers.

His first rule is to always charge your service rates, regardless of customer complaints. Simply explain that mechanical contractors undertake a lot of risk and have high overhead.

“We tell the customer that we deserve to make a profit so we can pay our people well. If we don’t do that, we won’t be in business to serve you tomorrow. We don’t defend our prices. We may be $300 more than someone else, but if there’s a problem with the equipment, I don’t care if I’ve totally screwed up, I’ll take the system and give a full refund. We take the Nordstom’s approach to how we give service. That’s really how it is.”

The industry should also be more cohesive, notes Justo. He believes that consolidators will eventually bring stable price structures into play, but it will just take time.

Justo himself is a member of the Blue Dot Company. The reason he sold to them was not fear of the unknown or anything of the sort. He and his employees simply wanted more time for their own lives — a goal they have achieved.

But he also believes that consolidators like Blue Dot will result in a more sophisticated hvacr industry.

Publication date: 08/21/2000

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