ServiceTitan’s survey of 1,014 commercial service business owners and executives was conducted in May by Thrive Analytics. Commercial mechanical, plumbing, and electrical companies, including those that offer installation as well as maintenance and repair service, represented about 78% of the respondents, ServiceTitan said. The remainder included companies in trades that included refrigeration, roofing, and security systems. 

ServiceTitan, based in Glendale, California, offers software for managing trades businesses. 

Executives involved in commercial HVAC and other mechanical services reflected the optimism found by the survey. 

“Synergy members are very optimistic about the future of the service market. In large part, that feeling is based on the continued growth they have experienced in recent years,” said Jim Bartolotta, managing director at Synergy Solution Group, a network of peers in commercial HVAC contracting. “While construction can be impacted by the economy and other global concerns, service ... continues to be a growing need for clients that want to protect and maximize the investment made in their HVAC equipment.” 

“There’s no sign of things slowing down,” said David Geith, vice president of service at EMCOR Services Mesa Energy, which has locations throughout the Southwest. “We’ve built a strong, diverse customer base across multiple verticals, which helps keep us steady even when certain sectors hit bumps.” 

Navigating Labor Shortage 

But they also recognized the stumbling blocks presented by the skilled labor shortage — and said they were working to get around those barriers. 

“Contractors today need to take a much longer, zoomed-out view around skilled labor,” said Mike McHenry, vice president for the mid-Atlantic region at Ainsworth, a multi-trades company with locations across the U.S. and Canada. “If contractors are only focusing their efforts on skilled labor right before the moment they’re hired — and failing to consider the entire pipeline ... they’re too late to the conversation.” 

Ainsworth partners with high schools, vocational programs, and technical schools to ensure the company “has its fingers on the pulse of each step of the pipeline,” McHenry said. “This has the added benefit of Ainsworth being at these tables as the industry changes from a technology, environmental, and regulatory standpoint,” he said. 

“We’re continually assessing doing more with less labor, building brand recognition with trade schools and colleges, and encouraging our journeymen to mentor apprentices,” said Brooke VenHuizen, a regional accounts executive at Helm, a national construction, engineering, and facilities management firm. “Just as important is retaining our current team through development of career growth plans and a strong company culture.” 

Company culture is important for Synergy members, too, Bartolotta said. The right culture, he said, includes giving employees a voice and a career path; getting involved with high schools, trade schools, and apprenticeship programs “to tap into talent”; providing training and mentoring; and recognizing and celebrating significant initiatives and achievements on an individual level and a company level. 

“While we discuss recruiting strategies and tools used to reel in talent, our members really focus on their ‘culture’ and making their company the go-to destination for prospective employees,” Bartolotta said. “When culture is strong, it leads to existing employees referring people they know and creates their ‘brand’ within their local market.” 

Geith said that, as a union contractor, Mesa has a strong training program that supports technicians throughout their careers.  

“We invest thousands of dollars per tech every year, and it doesn’t cost them a dime,” he said. 

Mesa’s 11,000-square-foot training center in Phoenix, Arizona, Geith said, has a laboratory that includes the latest technology, including centrifugal compressors, pumps, boilers, and automation systems. The company also has strong partnerships with schools, he said. 

“Solving the skilled labor shortage isn’t about waiting for talent to show up; it’s about building it,” Geith said. 

Rising Costs A Concern 

Executives also acknowledged the increasing labor and overhead costs that 45% of survey respondents said were issues for their companies. 

“Rising labor and overhead costs are absolutely a concern, and staying competitive in this environment requires constant attention and adaptation,” Geith said. “That said, this challenge isn’t unique to us; it’s industry-wide. We’re all dealing with the same pressures, which means the playing field remains relatively level. The companies that rise to the top are those that respond strategically.” 

“We review current labor and overhead costs to ensure the areas we are targeting for growth and development align with our cost structures,” Venhuizen said. “We continue to invest and review smarter scheduling, cross-training, a culture of accountability and efficiency for each and every role, and other workflow improvements.” 

Putting AI to Work 

The ServiceTitan survey also looked at the use of computer tools at commercial contracting businesses, finding that only 7% of respondents reported that artificial intelligence (AI) has a significant impact in the sector. But 39% said they see a moderate impact from, or the emerging potential of, AI. 

McHenry, at Ainsworth, said AI, “like the physical tools that our service technicians use,” is “only as good as the operator.” The use of AI for invoicing and work descriptions has “the potential to be game-changing,” he said, but still requires human oversight. 

“Far too often, I’ve seen AI-assist technology create challenging conversations between service provider and client, in an industry where a human touch is expected,” McHenry said. “AI is where we’re headed, but I think we’ve only begun the journey.” 

The survey also found: 

• More than two-thirds of respondents — 70% — said their companies used customer relationship management systems. Among those that didn’t, 47% were considering it. 

• Preventive maintenance agreements were popular, as 63% of respondents said that than half their customers were on one. Some 75% of contractors reported getting more than 20% in additional revenue from pull-through work for customers on preventive maintenance agreements. 

• More contractors — about 38% — used email as the primary means of communicating with customers than any other method. That was followed by online portals (26%), text messages (20%), and the telephone (15%).