Lowballers Are the Industry’s Ball and Chain

Our Readers Respond In a United Voice

We asked respondents to our survey the following question. “Do you have any comments you would like to make about salaries or service rates in your company, or in the hvacr industry?”

We received 108 comments. And do you want to take a guess what the overwhelming majority of them were?

They were not about Gen Xers. Not about parents. Not about high school counselors. Not about training. Not about our dirty trade.

The readers complained about low service rates and low technician pay. That shouldn’t be a surprise, since the wording of the question elicited these types of responses. But it was the tone of the answers that made them interesting, intriguing, and enough to make any hvacr contractor’s blood boil.

There weren’t any references to utility competition or competition from consolidators. That’s a little surprising since these groups have been an active part of our conversations for several years. The majority of comments pertained to the people who should be reading the survey and taking action — your competitors. Not all competitors, just the ones who keep lowballing you.

That’s why I want you to clip this column out (or download it from www.achrnews.com), photocopy it, and send it to your lowballing competition. Because these lowballers are the ball and chain of our industry. They are the ones preventing us from charging what we are worth and paying technicians what they need to stay interested and loyal.

This is a chance for our readers to share their thoughts, and although I’d like to publish all of them, I’ve chosen a few which reflect the mood of hvacr contractors and this writer. I’ll start the snowball rolling downhill with this comment:

“I have to keep salaries and benefits lower than I want because customers shop price virtually always; to compete I can only charge a little more than most of my competitors.”

With that in mind, let’s hear what other contractors had to say.

“Although we need to attract and retain a higher level of expertise among our employees, we have not figured out a workable way to be competitive with larger companies in our area.”

“Customers are not willing to pay high service rates to pay a technician what he or she is worth.”

“In our area, the industry as a whole does not charge enough for service rendered; price cutting is rampant, making the importance of quality a major component.”

“[The] market will not bear the true rates that should be charged for services provided.”

“No matter what you charge a customer for service or installation it is too much; you should work for free so the customer can spend money on their overpriced SUVs, cars, trucks, and those computers — which is going to be the downfall of our country.”

“Rates and prices charged must be raised to allow for higher technician salaries to entice more of the brightest and best to enter our industry.”

“Service rates are too low in our industry, but technicians must be used in another capacity to increase their salaries. Tech-nicians who can sell a customer products during a call and ensure that an installation crew will be properly prepared for the [job] are worth more than they are given credit for.”

“I feel we are professionals and are worth more than we are given credit for.”

“This industry needs to spend more money for higher wages and benefits to attract and train better people — and charge accordingly on the front end to cover these overhead expenses. Otherwise we will not compete very well with other industries in attracting and developing quality personnel.”

“Wages are not commensurate with the skills required of a technician. They must be electricians, electronic technicians, welders, mechanics, sheet metal workers, sometimes carpenters, air balancers, and now IAQ specialists. Most other building trades require less than one-third of these skills.”

“Why is it that this profession never really charges enough and always cuts prices so far that we never make a reasonable and fair markup?”

On The Positive Side

The results of the survey were not all doom and gloom. We looked for silver linings and found a few (albeit very few). For example, one contractor said: “I think salaries and benefits in our industry have improved greatly in the past ten years; we are now very competitive with other fields. Unfortunately, all service sectors are growing rapidly and there is a shortage of available workers for all industries — not just ours.”

And despite all of the good feedback, not enough of the respondents were able to offer viable solutions to the problem. But that’s okay, I’m not being critical. It’s hard to diagram a way to find a needle in a haystack.

That will be an undertaking of The News in the coming months. It will take a concerted effort on everyone’s part to raise our service rates and hire/retain highly qualified technicians. We’ll need your help, too.

Fortunately, there is always the optimist who seems to have a solution to every problem.

“Our flat rate service prices are based on $160 an hour with high markups on parts. It is very rare we get a customer complaint about our prices. Based on the investment our techs have to make in their schooling and tools; and our investment in tools, trucks, inventory, dispatch, and managers we really should be charging $200 an hour. Anyone in any large market who does not charge $100 to $120 an hour is really shortchanging themselves. Pay them [techs] well and treat them with respect.”

Good advice, my friend.

Hall is business management editor. He can be reached at 734-543-6214; 734-542-6215 (fax); halljr@bnp.com (e-mail).

For a complete copy of The News’ 2000 Salary and Service Rates Editorial Study, contact Jill DeVries at 248-244-1726; devriesJ@bnp.com (e-mail). The cost is $150.

Publication date: 02/05/2001