Terry Stamman was on track for a banner year. The president of Twin Cities Siding Professionals, in St. Paul, Minn., says the company sold $4.6 million worth of work in 2016, its best sales year ever. But Twin Cities Siding could onlyget $3.85 million of that installed and collected. On the company’s books, that made for a swollen top line but a much reduced bottom one. The company goes into 2017 with a whopping backlog, and “still made money,” Stamman says, though it fell short of its profit goals.
The problem is a shortage of trained technicians with the carpentry skills needed to install fiber cement siding, or just about anything else. What Stamman says he intends to do about it is hire Hispanic installers. He has set for himself the goal of becoming fluent in Spanish by April so that he can transform the company into a truly bilingual operation and solve, once and for all, his labor shortage.
And about president-elect Donald Trump’s promise to deport the approximately 11 million immigrants in the U.S. illegally, mostly Hispanic and many working in construction, he has this to say: “If he sends these people back across the border, America is going to be hurting.”
A nasty, almost brutish national election season ended sometime around midnight on Nov. 8 with Trump ascendant, a result that confounded pundits and professional observers. For some home improvement company owners, that outcome, if unexpected, was welcome. “It will be a more business-friendly climate,” says Brian Elias, president of Hansons Windows & Siding, in Troy, Mich., one of the industry’s largest companies. Donald Trump, he says, will “look at the government as a business. When it’s run more like a business, it will make more decisions that are business-like.” As an example, Elias says, it will have to balance its budget.
For Hansons, coming off a $75 million year and projecting sales of $85 million for 2017, labor—that is, nowhere near enough of it—is also the overriding issue. “Roofing hasn’t been that bad, but siding and windows have been very challenging,” Elias says. “There are just fewer people who know how to do the work.”
Many contractors find themselves in the same situation. Demand for their services exceeds their ability to satisfy that demand, because they can’t get skilled workers. “The number one problem here right now is labor,” says Horacio Kusnier, owner of K&B Home Remodeling, an exterior contractor in Morristown, N.J. “I could use a lot more people, and I see the same thing with everybody else.”
The issue of how to get more skilled workers into the labor pool looms large as a present or future threat. But about how to address the issue there are various opinions. “The average age of our window crews is late 40s,” says Jeff Moeslein, president of Legacy Remodeling in Pittsburgh, Pa. “We’re definitely going to have a problem ten years down the line if we don’t introduce more people into this labor force. If we need 18 million immigrants to make our economy work, than we should hand out 18 million visas.”
Others feel the government should move to make training in construction skills readily available as a career path.
“This is the responsibility of the educational system,” says Jim Lett, president of A.B.E. Doors & Windows, in Allentown, Pa. “If you won’t train them here, then you should be bringing in immigrants who have that talent. But we should be able to train people within our own country.”
With training in skilled trades increasingly de-emphasized at the public school level, Elias says he’d like to see businesses that start a training school be able to deduct the cost of that from tax payments. That way, “you don’t mind taking a risk, because the government is sharing it.”
Time Will Tell
The result of the election may have given some contractors hope that issues near and dear to them would be addressed. But others suspect that the contentious and negative atmosphere in the run-up to the vote put a damper on sales. They were delighted to have it over with. Ryan Parsons, co-owner of The Brothers That Just Do Gutters, a gutter and gutter-franchising company in Lagrangeville, N.Y., says that 2016 was the first year in the last 10 that his company did not hit its sales target. He gives two reasons: “a crazy drought” in upstate New York, and an election partisan to the point where “friends were unfriending friends” on social media sites, an atmosphere stressful to the point that homeowners became wary of pulling the trigger. “Clients were saying: ‘Well, we just have to see what happens with the election.’” What was good about it, he says, is that it caused him to reexamine every aspect of the Brothers operations—marketing, sales, and admin—changes he believes will pay off with renewed growth in 2017.
And though the polarization that developed or revealed shows no signs of abating, at least political ads are off the airwaves so that prices for ad buys in electronic media are once again affordable. Advertising became so expensive, Moeslein says, that he simply discontinued media advertising in 2016. In 2017 he intends to resume Legacy advertising on Pittsburgh radio and TV. He bases his support for Trump, he says, on the perception that nothing had changed much in the eight years previous. “I never felt like things got going again. I get the sense, from talking with other business owners, that the last eight years were tough, and Hillary would’ve been four more of that.”
But like many Trump supporters, he is waiting to see whether the new president and his administration will follow through on candidate Trump’s various promises about regulatory relief and infrastructure investment. Others shared that wait-and-see attitude.
“He talks about deregulating things and giving some breaks to businesses, which will translate to growth in the long run,” says Kusnier. But he is skeptical. “[Trump] says one thing one day and the next day something different. Time well tell.”
For some home improvement company owners, the most contentious issue when it comes to government and their business is RRP, the Renovation, Repair, and Painting regulations implemented in April of 2010. Already more than five years old, it’s a subject that never fails to arouse lingering resentment. “It’s been a pain from day one,” Moeslein says. Much of that resentment stems from the additional labor cost of making projects such as window replacement “lead safe.” Beyond even cost, owners object that the regulations are ultimately “unenforceable” (Stamman’s description) except for occasional efforts to intimidate the contractor population by making an example of the selective few that are investigated and fined for ignoring them.
“I want it gone,” says Steven Jones, owner of Tulsa Renew, a Tulsa, Okla. company that specializes in fiber cement siding. Most, however, see RRP as here to stay, but would like for the EPA, under its newly named director Scott Pruitt—a prominent agency opponent—to modify the regulations by reinstating the Opt Out clause. That clause, originally included as an option within the regulations, allowed homeowners in houses without children or pregnant women present to exempt themselves from lead-safe work rules by signing a statement to that effect along with their contract.
Views Discretely Expressed
Many contractors, as business owners, have strong views on these and other issues, such as how to manage rising health care costs. Though the election has exposed political divisions, most company owners avoid anything like open partisanship. It scores no points with either customers or employees, who, they acknowledge, in many cases would not agree with them.
“I think you have to separate yourself,” says Lett, who started his business four decades ago as a one-man operation, both selling and installing windows. “It’s like the country is split down the middle and you have to be sensitive to both sides of the political spectrum. I welcome everybody’s dollars.”