The Economy And Weather: A Catch 22
For example, with the rise in gas prices, consumers are going to demand more fuel-efficient cars, meaning retooling antiquated factories and discounting thousands of gas guzzlers, clogging up dealer inventories. Got a similar story in your state? I bet you do.
Every time I read about a plant closing in a small community, I wonder where all of those workers are going and what happens to their families. Losing a job is demoralizing, dehumanizing, and has serious effects on a person's social and economic fortunes. I know because I've been there, too.
It would be easy for HVACR contractors to say, "What the heck, the pool for potential new employees goes up every time a plant closes." But that is simply not true. Call it the Catch 22 effect.
The Vicious Cycle
Although the HVACR trade has maintained a need for experienced service technicians and will for years to come, there may not be money available to hire these people.For example, contractor "A" (in an area affected by a plant closing) has forecasted his sales for 2005. He knows that to achieve his goals he needs to generate "X" amount of revenue from his service and replacement department. That goal can be achieved with five service techs. But he only has four. He looks at his call volume to date and the numbers are flat, perhaps down a bit from the previous year.
Does he hire a new worker from this new pool of employees, anticipating that business will pick up? Or does he wait and look for indications that business will pick up, e.g. long-range weather forecasting (yeah right). If he is a former service tech, he can always pick up the extra calls if needed. But that would take him away from his everyday job of running the business, which could be more detrimental than paying a new service tech.
And round and round the cycle goes. The more I write about this stuff, the more relieved I am to be writing about it rather than experiencing it. You contractors have tough jobs.
Throw In A Lousy Summer
The news was worse last year in Michigan (and other parts of the U.S.). We didn't have a summer.Contractors had to downsize a bit and perhaps lay off workers. Being dependent on the weather is a costly proposition. Maybe that's why so many successful contractors have programs in place (i.e. service/maintenance agreements) to keep a steady workload. That's a topic The News has covered many times and will continue to cover.
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What needs to continue is finding ways to make your business less dependent on the weather and the economy for staying busy and profitable. Sure, it's a stretch to make such a pipe dream statement. But it's realistic to think that there are ways to play along with the bad times. For example, if the price of gas is taking a bite out of your service calls, raise your rates or add a trip charge, even if it is minimal. And if you can't hire a laid-off worker, send them information on the HVACR trade and include contact names for the local vocational/technical school. Just because you can't hire them now doesn't mean you can't point them in the direction of an HVACR career.
Be proactive, not reactive. Blame yourself before you blame the economy and the weather.
John R. Hall is business management editor. He can be reached at 734-464-1970, 248-786-1390 (fax), or johnhall@achrnews.com.
Publication date: 05/09/2005