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.
Remodeler to Remodeler: Designing
Remodelers debate the cons and pros of hiring design staff vs. outsourcing to architects.
Remodelers discuss the benefits and drawbacks of hiring dedicated design staff vs. working with third-party architects.
Located in a competitive market for design, Carl Seville, vice president of Atlanta, Ga.-based Sawhorse Inc., keeps a rotating in-house design staff of about six employees. Eight years ago he moved his design in-house, and has had as many as nine designers at his company.
PR: What is your staff model in the design department?
SEVILLE: We currently have three architects and three designers on staff. It varies, because we’re in a strong market. Our design/build is an intensely interactive process because we design to people’s budgets. It takes a lot of work to get a project that will cost what you expect it to cost, and we work very hard to keep those prices in line. You need to have constant contact, constant give and take with the designers throughout the project.
PR: Do you find your design costs are higher when you’re paying designers for their time?
SEVILLE: No, I actually think they’re somewhat lower with a salaried staff, especially in the Atlanta market right now. Architectural firms and practices charge high rates. We can bring in talented people who want to practice design but don't want to run their own businesses, and we are able to pay competitive salaries and charge our customers less than many architecture firms in the area.
PR: Is time management a factor?
SEVILLE: Our people are pretty much always busy. Our workloads are pretty constant, and there’s no peak period. All six of our employees work full time.
PR: How do you look for design employees?
SEVILLE: We look for people with strong experience in residential design, which is not easy. They must have customer skills and you need people who are self-motivated and self-managing. Being able to work efficiently can be counter-intuitive to designers, and you need to find somebody who has the appropriate level of creativity for your organization. There are people who can design things that are beautiful but are costly to build, and there are people who can only build things on the plain side. You need to decide where you want your business to be.
PR: What are the drawbacks with outsourcing?
SEVILLE: Sometimes individual designers don’t get along with clients. If you have a larger staff, you can switch designers out, however, and bring someone new in. As it is, setting meetings is hard. If you need to coordinate a homeowner, salesperson, estimator and designer it’s easier if you can schedule it electronically in-company. If your designers aren’t in the organization, it’s much harder. Also, if your designers are in-house, they don’t have to provide as much information as they would if they were a separate company and had to put extra work in to cover all eventualities. When your staff is in-house, you have eye-to-eye communication, efficient architecture, and less documentation for better projects.
Working for the past 10 years, Matt Plaskoff, president of Plaskoff Construction Inc. in Sherman Oaks, Calif., sells about 75 percent of his projects as complete design/build. He’s developed a regular network of architects and designers he can hire for a variety of jobs.
PR: How many designers do you work with?
PLASKOFF: I have three architects that I give the bulk of the work to, and another three that I can use if I have need. Not every architect can make every client happy, so we try to tailor our designers to our clients’ budgets and personalities. You might have one architect that specializes in contemporary work, and another in traditional, another who can do anything but is expensive, and another who can do a low-end project quickly. We look at a person’s home and try to match the style there to a designer’s style.
PR: What effect does this system have on your financials?
PLASKOFF: We get a fixed price for each project. Even if a design takes them 10 times as long as anticipated, we won’t get hurt financially. If I had an in-house architect, that extra time would come out of my pocket. There’s a little bit of a cost issue because if you’re paying a subcontracted architect, they have to make a profit. Sometimes this can be more expensive, but as the architects we work with get to know what we need, they require less from us to get the work done. But the fundamental pricing is the big thing. We give the client a price, and they can rely on it.
PR: Why did you change from an in-house design department?
PLASKOFF: There was an issue juggling the design personnel on staff. One minute they were busy on 10 projects, and the next they’re not busy at all. Now, it’s the same theory as subcontracting—it lays the fluctuation of personnel on the subcontractors instead of on us personally.
PR: Other than budget, what benefits are there to subcontracting design?
PLASKOFF: There’s also an insurance issue. Not all architects carry errors and omissions insurance, but we try to work with those who do. We can end up being more liable if we did our own design, so it protects us this way. Also, although the designers we work with are under our umbrella, because they’re independent, the clients feel that it solidifies the designer’s integrity.
PR: What drawbacks come along with outsourcing?
PLASKOFF: Control. As with any subcontracted condition, if they’re working for you in-house, you can walk up to them and tell them to "put that down and do this now instead." With architects in their own offices, you can’t tell them what they should be working on. Also, with in-house employees, you know they’re working 100 percent for you, and not going elsewhere. Control is the only thing I feel I’m lacking, and I confess that’s a challenge. I can tell a client we’ll be ready to start on a certain day, and we won’t be because the architect hasn’t finished the plans. You need to develop time incentives and penalties to make sure the designers stay on board.