Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
With all of the changes occurring in the remodeling industry — going green, energy-efficiency, new rules and regulations — how important is it for your team to stay on top of the game? Training and certification are two of the best ways to stay ahead of the competition.
With all of the changes occurring in the remodeling industry — going green, energy-efficiency, new rules and regulations — how important is it for your team to stay on top of the game and be ab le to differentiate yourself from your competitors?
Read the complete discussion below or link to the podcast to listen to the conversation.
Jud: The topic today is “Training, Education and Certification.” We’ll probably want to separate some of that out during our discussion today. From your past experiences, what are the top two or three educational opportunities for remodelers here in the country?
Don: The Certified Remodeler (CR) is what NARI is offering. In my mind, I don’t know how you could survive without that type of information. For the field individuals, there’s a Certified Lead Carpenter course, which is something our company emphasizes if anyone starts with us. If they’re not interested in going through that course, we’re actually not interested in hiring them. It’s not the same atmosphere it was years ago. If you’re not constantly getting educated, you're going to get lost. Those are probably the two larger opportunities with NARI.
Jud: Don, you encourage your employees to get any other kind of education if they want to, such as an Ivy Tech, or some type of technical school.
Don: We do. In fact, we have in our policy manual that the company will pay for any type of educational pursuit so long as it overlaps with the remodeling industry. If there is a connection, whether it’s framing, math or whatever it is that will help people in the industry, we would help financially.
Jud: Not only NARI, but you would offer other opportunities. There might be other opportunities at the Ivy technical schools or whatever they might be.
Don: Yes. We have some local colleges that have programs that we send people to. There are 1 and 2 day seminars that people attend. It’s pretty much a year-around situation where everyone’s always going to something.
Jud: Mike, would you like to tackle that question?
Mike: As far as educational opportunities, there’s a wide range from what Kitchen and Bath offers to CKR, CBD and its Master series. Also, NARI has the Certified Lead Carpenter program, which is widely recognized as very good. The training opportunities that the University of Housing that the NAHB offers have been very effective and well-received, primarily because it’s been developed by and is largely taught by people “from the trenches.” That gives it a great deal of credibility on the inside. There’s a broad range of management seminars, whether it’s Peters, Lee Evans or Zig Ziglar and those motivational speakers. There’s something about the interest to attend that kind of training or educational experience that tells you something about the person who is working for you, or if you’re in the hiring format, that they’ve attended that. Even if it’s the Dale Carnegie training program. That level of curiosity tells you that you’ve got a “smarter-than-the-average bear.” I was always disappointed, over the last 20 years of my company experience. We at one time had 19 employees. Much of the time we were in the 7 to 9 or 10 with field supervision, but no hands-on mechanics. I was disappointed that they didn’t pursue more education than they did. I offered to pay for it if they went for a designation. I would pay for the whole thing provided they stayed three years from the time they took it. It was on a rebate. If they left after one year, they owed me 2/3 of the tuition; two years, 1/3 and three years, they owed nothing. I openly encouraged them to do it. I required them to go to some stuff. It really tells you something. They get a lot out of it, but many times you have to sort of force them to go to it to start with.
Jud: Don, do you have any rules and regulations as far as what you’ll pay for, such as Mike just stated, as far as the time, two or three years, or some number?
Don: We use a little incentive. I don’t believe in anything for nothing. It needs to be an equitable arrangement. If we have someone who wants to take the Certified Remodeler course, or Certified Kitchen and Bath, Certified Lead Carpenter, or whatever the program, we will pay for that course in total. We tell them to purchase the publications. If they fail the course, they pay for the publications. Either way, we’re paying for the program. If they successfully pass, we automatically give them an increase in wage, over and above anything else they would have accrued. It’s financially rewarding. I believe that for anyone who goes through these programs, when they come out, their vision is such that they’re easily worth the increase.
Jud: We’ve talked about basically the field personnel here. Don, do you encourage any of the people in your office, the office manager or salespeople to go through any kind of training?
Don: Absolutely. Sonia, who is our office manager, is also a Certified Remodeler. She was reluctant to go into it initially because she though she didn’t know enough about the field aspect. She did fine, did well on her tests. It gives her a whole other frame of mind. Our production manager is a Certified Lead Carpenter and also a Certified Remodeler. If anyone’s going to lead, they’re going to need to go through the programs and training.
Jud: Mike, how far into the company did you go with your training opportunities?
Mike: The encouragement was from top to bottom and bottom to top. During the management seminars, we had some teleconferences that I required everyone to go to. We paid for that. The encouragement for designations was company-wide. We only had three people — one was the vice president — that actually went through with it. We tended to take advantage of individual seminars rather than the designations. I encouraged the designations but didn’t require them.
Jud: We certainly have a difference here between certification with education and then the whole aspect of training on top of that. Don, what value might your company get in educating employees?
Don Van Cura Sr.
Don: There’s a certain sense of pride that we have seen. It may be a little intimidating for the guys in the field to go through a program for several weeks and sit for an 8-hour test. There is a lot of pressure. When they do, they’re a little taller than they were beforehand. There’s the sense of being a technician and having been recognized as someone who really knows what they're doing. The feeling in the whole company is very synergistic. It compels other people; there’s a friendly competition. I’ve had people say, “He’s been to a couple of these, can I take that next?” We love the atmosphere.
Jud: It creates a different atmosphere in your whole company.
Don: The recognition by clients, too, is good. I got a call working on a new project. A gentleman was there with his son. The boy is listening to us and looking at me. He said, “Dad, what are all those initials on his shirt?” The dad says, “Well, son, that means he’s very expensive!” We laughed about it, but it's like any other certification. People have a comfort level with someone they know has gone through the process. It’s like the difference of having the guy with a calculator doing your taxes or someone who is a CPA. There was some bar that they had to meet to get that qualification.
Mike: There are very few people go to the yellow pages to pick a doctor to take out their appendix.
Jud: Mike, any other value to the company that you can think of which wasn’t mentioned by Don?
Mike: I certainly agree with the pride aspect. I can best exemplify it by something that happened when the Remodeling Show was in Indianapolis. At the time, I had seven project managers. They were pretty cocky. Our company culture was, “We don’t check the competition — we are the competition!” I sent two of them, in particular, to a seminar about field management. I was waiting for them when they came out. I asked, “What did you think?” One of them, who was the wisest of the two wise guys, said, “It’s no big deal; we’ve been doing some of that stuff for three of four years!” I said, “Really? How does that make you feel?” He said, “I guess it made me feel pretty good; kind of like we’re leaders.” I said, “So, you accept that it’s a good idea?” He said, “Well, yes.” I said, “So then, why don’t you pay more attention to it when I talk about it in staff meetings?” I agree that education is a good habit. It’s hard to start, but once you get it ingrained, people will miss it if it’s not there. That’s really healthy.
Jud: So, that helps the company. We hear the question, Don, “Why should I want to train these people? As soon as I get them trained, they leave!”
Don: I have seen that. I’ve also seen the other side of it. We don’t put shackles on anyone. I would be a hypocrite to say that it doesn’t happen. We’re firm believers in education. When that person is with us, all we’re looking for is for them to do the very best that they can do for our clients. That’s how we describe their job: they’re there to be the kind of employee that we would never want to lose. Our job is to be the type of employer that you would never want to leave. It weighs on both parts. We’ve had people who have gone through programs, and they’ve gone off, moved out of state an opened their own businesses. We’ve always maintained a good relationship with those people. In fact, a few of them have come back and been subcontractors to us. About a year ago, we had one gentleman who gave me notice. He went through the Certified Remodeler program and the Certified Lead Carpenter program. He said, “Well, Don, I’ve got to try this on my own.” We helped set him up, and he did OK for a while. He then realized that it wasn’t as easy as he thought. He’s back with us now with more energy than we ever imagined.
Jud: The point being that not only did you encourage him to go out on his own, but it was good enough that you’d take him back if something happened. I'm sure you didn't say that right at the time, but when he came back you didn’t hesitate.
Don: No hesitation at all. All of us benefit when we educate people. Historically, the problem with our industry has been the view of the public that, “These are guys who didn’t go to college, so they grabbed some tools.” That’s not the case anymore. The more we educate, the higher we’re raising that bar and the public’s perception of what we do. It’s only going to help the industry and everyone across the board.
Jud: Value to your company, Mike?
Mike: There’s certainly a risk that if you have someone good, someone else will want them. We’ve ran into that a few times over the years. For the most part, people thought that my people were too expensive. They didn’t go after them very much. I never had a problem with someone leaving, as long as one condition was met. That’s assuming that they wanted to try something to better themselves. The standard conversation was: I’ll do anything that I can to help you provided one condition is met: you understand that my customers are my customers. If you try to make your business successful by coming after my customers, you will have made an enemy that you won’t want to have made. On the other hand, if you try it on your own, and build a business as I did and as you’ve seen happen here, I will help you any way I can. I agree with Don. Very often, the person who leaves tries it on their own, understands that the grass over there may look greener, but it’s tougher, will come back and will make a much better employee. At the very least, they will refer work to you that they’re not in a position to handle. Being known as a good place from which to get an even better job certainly isn’t a drawback when it comes to recruiting.
Jud: Taking education and certification together, how do you use that in your marketing to differentiate you from everyone else as far as competition is concerned?
Don: We had a call from a lady who found us by looking through the Internet and looked at our Web site. We always ask what lead them to call us and if they know someone that we’ve worked for. She said, “You were the only one I saw who was a Certified Kitchen and Bath Remodeler, and that’s what I want to do.” People do have a better comfort level when they see there’s some symbol that this person has had a background and education. I could think of numerous situations like that where people that we work for know that our people are educated. They know about the certifications. We let them know. Prior to a project, we send out mini-dossiers on each lead person. It has a photograph and a little bit of history about them. It explains what it means for them to have gone through the education, and the continuing educational requirements.
Jud: You certainly use the educational certifications in your marketing to let the client and the prospective client know that they have, in fact, done this. Then you explained it to them to some degree.
Don: Exactly. We really emphasize it. It’s worked very well for us from a marketing standpoint.
Jud: Mike, what do you do in marketing as far as certification and/or education were concerned?
Mike: We’ve certainly always listed both the certifications or designations as well as our memberships in professional trade associations. It did a great deal to establish the legitimacy. A certain portion of the investigating public, if you will, will look at the alphabet-soup and will assume that it means some kind of attainment which indicates a higher level of proficiency, knowledge, quality, or you name it. We wanted to take advantage of that. We remarked several times that we had several CGRs in the company. Then I lost someone, and I stopped marketing it. In 20-some years that I’ve been a CGR, I’ve only had two people ask me what those stood for!
I don’t think that they fail to recognize it. They just didn’t ask what it is. We believe very much in marketing it.
Jud: Does the education and certification resonate with the prospect? You haven’t been asked very often what the letters stand for. How do you think the prospect takes that?
Mike: We weaved references into the sales presentation and just general conversation that indicated our position with respect to leadership. We let them know we were very active in the guidance of the industry. We took pride in our participation there. We were active in shaping policy because we considered it a profession rather than just a job or a shingle. It’s hard to quantify how we did that, because very often it would depend upon the person you were talking with. I think it’s a very pivotal part of the way your company is perceived. What part of the industry do you represent and embrace, even to the extent of being active politically. It shows an interest beyond selling whatever widget you make! I think it inspires some confidence or support of integrity, you name it. It’s a difficult thing to talk about. From what Don’s saying, I can tell it’s part of his company culture, which is not one of my favorite terms. I think clients sense it, though.
Jud: Don, how about you? Do you see that it resonates through the clients or prospects at least?
Don: We have a little bit more than just the initials. We do let people know on our stationery and proposals. When we have a certified individual, they cost more. It explains why they cost more. We find that even in the referral process that we’ve heard our clients bragging to their neighbors, “The people who are remodeling our place are certified people!” I get a real kick out of it. The neighbor doesn’t really know what all that means, they just know it means something better! Now there is a slowdown in the market. We say the proof is in the pudding. We have folks that are asking for time slots two years out. Obviously, our approach to serious education — conveying that to our clients, a very professional approach — that wins out.
Jud: It certainly makes a difference if you can tell them they’re going to have that professional two years out or whatever date out. Don, what sort of return on investment for the remodelers; what can they expect when they go for certifications or training? Can you put any kind of handle on that?
Don: I can. We have discussion with all of the guys that go through the process. We let them know, life is uncertain. I hope I’m in the industry for many years to come. I also let them know that, for whatever reason, I leave the country, they are a much more marketable individual. Not only does it help them while they’re with us, it also gives them a better position in the market. People are happy with that. We don’t loose people because of the education and training. It does help them feel a better sense of security. They’re more likely to stay in the trade if they feel as though they’re actually going somewhere.
Jud: Don, let’s go back to your previous comment. It was meant in joking at that time, I’m sure: “That means he’s more expensive” when they saw the alphabet after your name. On the other hand, do you think you can command a better margin from those hourly employees than you can if they don’t have that.
Don: No question about it. We have a significantly higher rate for people that are certified. I know in general just from hearing what the going rates are, that we’re not the cheapest person in town, for sure. We do charge more. We feel we can command that because we feel we’re giving a better product. Everyone in this business has to have a bit of an ego. It looks nice if you’ve got something to base it on.
Jud: Certainly, if you’re getting a higher margin, that’s a return on investment, wouldn’t you say?
Jud: Mike, what kind of return on investment have you seen or heard of?
Mike: On average, when someone takes the prep, which is the predecessor to becoming a CGR, and say, for example they have to take 6 courses. That’s looking at a cost, or the investment if I’m paying for it, of $1,500 to $1,800 for the actual academic part of it, the workbook, class time, etc. Also, I’m sending them there instead of getting the productivity with them having a day at work. On a burden rate would probably be another $1,800. I’m looking at somewhere in the neighborhood of from $2,700 to as much as $3,200. If I’m getting a 10 percent net before taxes, that’s just one $32,000 job that I have to get because they’re good enough as a result of becoming a CGR to help me make that job happen. That’s cheap. That return on investment is paid for in one $32,000 job. And, I’ve got them for the rest of their active career. I can’t come up with anything that’s anywhere near that good a return in the market, or 401K or anything else.
Jud: Don, when you get your Certified Lead Carpenter and whatever certifications you give to those employees, is there a point where you might have some money in return on investment from the standpoint that supervision-wise, you could reduce your supervision costs, because they’ve got the skill that you don’t have to supervise them quite as hard. Is there anything in that?
Don: Definitely. I think Mike would agree on this too. When you get these people to the point where they have confidence, they have the information, they develop their management skills; you don’t have to be everywhere. That’s been the classic pitfall of remodelers. We’re gunslingers, we think we have to do everything ourselves. When you have someone who’s really qualified and out there doing things, you don’t have to pay attention to every little thing. I had a wonderful experience not too long ago. I had a customer who I was talking to and I said, “I can stop by and take a look at that.” She said, “Oh, that’s not necessary. Could Bob come instead? I don’t want to hurt your feelings” I said, “You haven’t hurt my feelings one bit!” That’s a beautiful thing when the clients are asking for the guys to do things that I used to do. The most valuable thing I have is my time. I want to give the guys as much money as I can afford to in exchange for my time. It’s a very nice experience to see people grow and take that load off the individual owner’s shoulders.
Jud: Don, can I put some words in your mouth? I’ll say that realistically it takes the pressure off of you as far as the owner is concerned because of their certification?
Don: Yes. Very much so. We work four days a week in the office. We do not work evenings or weekends. I could have never done that without the certified people that we have. They’re not just tradesmen, they’re managers. It is because of this certification process. We’re religious about it.
Jud: Mike, do you want to comment on that?
Mike: What I call that process is leveraging yourself. In leveraging, it’s when you can create a situation by virtue of the training and education that you’ve passed on and the systems that you’ve developed as a result of having those people in place. That is effectively the way you leverage the talent, understanding and experience that you have as a business owner to, in effect, “be there without being there.” Through the experience and the training that you’ve given the individual and the system that you, with their help, establish. That’s the only way we grow. The most difficult thing in the world is taking off that tool belt and leaving it off. If you’re good enough to build a company, you can’t build it any bigger than what you can do yourself until you train other people to help you grow. Without education, you can’t get any bigger. With no education, you’re only going to be able to do the things that you can specifically handle yourself.
Jud: Good point. We’ve talked about the benefits to the client; the benefits of marketing, separating ourselves; the benefit of having these employees so that it takes some of the load off the supervision and/or the owners. Don, can you think of any other benefits that we might have from certifications and/or training?
Don: The biggest being the pressure to the industry. We’ve got several wonderful trade organizations. The two that we’re both involved in: there’s the NKBA, and there’re others. All of these organizations, because of the programs that they’re developing, are putting a big pressure on those who aren’t involved. If they want to keep up, they’re going to have to get involved. You can’t just throw the tools in the truck anymore and expect to be around for any length of time. There’s so much that we have to know now. We have to be chemists, engineers, diplomats, scientists, computer experts, etc. It’s just not the same business. The more pressure that we put on those that are trailing in the industry, the better our whole industry is going to be.
Jud: Mike, what do you think? Are there benefits?
Mike: I think the extent to which you help your employees learn and become better at what they do, you create a stability, not only from the company’s standpoint, but with the employee’s home life. One of the things we’ve always done when we’ve interviewed was to give someone a synopsis of our company manual. It explains the benefits, sick leave, 401K, etc. If they’re a candidate in contention, we tell them to take it home with them. That, we believe, separates us from the other people they might be talking to. When you ask someone if they have a good job that they like, and they say “Yes,” and you ask them what makes it a good job, never in my experience has it been, “Well, I make a lot of money.” That’s important, but the response that you’ll get first and second is going to be: “I have the responsibility, they let me work and let me make mistakes. I have the opportunity to advance. They give me responsibility.” Somewhere in the top three or four is going to be money, because it’s how we keep score. I think that training and education is a very important part of why people feel they have a good job. It allows then to use their judgment. They can make a mistake; some may get in trouble if they make the same mistake repeatedly. But, we can’t write enough rules to cover every situation that an employee might encounter. We have to train and educate them so they will, in fact, use good judgment. That’s what we’re after!
Jud: I'm not sure if you can or can’t tell me about it. Is training more important than the certification? Mike?
Mike: I’m with you. I’m not sure you can separate it out. I would give it an opportunity. One of the first things we did was to have a project manager get trained in CPR. I was fortunate; it did help. When I was a teenager, I had the opportunity; if I had not had CPR I would have lost a good friend. He wasn’t breathing, and I got his breath back until the EMTs got there. I've never forgotten that episode. That’s training to me; OSHA is training. It’s the difference between education, designations and training. Training to me is more dealing with the need to react to a situation, where education and designation is creating a mindset, or going back to that judgment of how to react in a situation that may not necessarily involve safety or a particular set of circumstances. They’re pretty hard to separate.
Jud: Don, training compared to certification?
Don: I agree that they’re hard to separate. But, like the old saying, “knowledge is power.” You can tell when someone knows what they’re doing. Training is certainly the desired result. The thing about certification is that it lubricates that process. Most of us are very goal-oriented. Imagine running a track race where no one had a stopwatch! How do you know and how can a person say, “Yes, I’m really going somewhere,” if they don’t have some type of marker? I think that with the sense of a goal orientation that a lot of us have, the certification is the trigger for that continuing education mentality. If a person sees, “I’ve got this and that to work on” and then when they obtain it, they have something; the stopwatch went off — you’ve gone this far. To maintain it, they have to have continuing education requirements met. There’s more for them to measure and other certifications. The training is what you want, but to get there it’s very difficult without involving some type of certification process.
Jud: Don, in that particular case, have you seen a difference when you send an employee to a training program where he gets something: certification, diploma, whatever you want to call it, compared to when you send him to a training program from maybe a manufacturer who is simply telling him how to put a product together? Can you see a difference in your employees with that?
Don: Yes. I can think of one individual in particular. For years, he’s gone through different programs and would sit there and pay attention quietly. There wasn’t as much involvement. Now that he’s been certified at a couple levels, when there are seminars, he’s got his hand up, he’s making comments, and he’s in the thick of it now. He’s not intimidated any more, and he’s involved. It does stimulate progress.
Jud: Mike, can you see a difference between those two, training compared to giving a reward at the end of that training?
Mike: I think so. There’s an acronym we’ve heard of: SMARTS, which is Specific, Measurable, Achievable, Realistic and Time Sensitive. Don’s right. If you don’t know how long the project is going to take or when the race is over, how well am I doing? I think certificates, medals or anything like that recognition is very good. Everyone likes to know that they’ve done a good job. When we don’t give performance reviews, even in a small company, a formal performance review is extremely important. It’s a one-on-one. That recognition that comes with educational achievement is important. If you didn’t give certificates, I think that enrollment and interest in doing it would fall off drastically.
Jud: Gentlemen, I’m sure that’s enough. I want to go back to a comment Don made to begin with. That was that we were talking to the choir today, if you will, or preaching to the choir from the standpoint that both of you and myself were dedicated to training and/or certifying our employees. From the length of time that my employees have been with me, I think that shows that it pays off in the long run.