Another Silver Lining In These Dark Clouds

Mike Finley · 04-02-2008, 03:36 PM

Quote:

Five steps to get and keep the best trade crews

By Bill Lurz, Senior Editor, Business
March 1, 2008
Custom Builder

It's critical to a custom builders' quality reputation to find the best trade contractors in their market and then get those contractors' best crews to work on their jobs. So it's a big concern that, because of the housing slump, many top trade contractors are now shifting crews into commercial work.

Clinger laments that the crews she's sometimes working with now have never done what she's asking them to do. "I'm used to having the top guys on my jobs because what we're doing is really complicated. But today, the top guys may be working on a bank lobby or a hospital."

What's driving the movement of trades away from residential work, custom builders say, is the decline in jobs. But in most markets, high-end custom housing has not fallen nearly as much as mainstream production building.

Builders who work with their trades to meet the new pricing dynamics of the market are able to keep themselves — and their trades — busy. Providing a cushion against the slumping market gives custom builders an opportunity to keep the best trade crews on their jobs, which will help when the market comes back and the best trades can pick their projects.

1. Pay fast!
Virtually every builder we talked to says getting the money for a job to the trade company — fast — is a critical advantage residential builders have over commercial building firms. "The commercial contractors often don't pay for 60 to 90 days," says Chicago builder Nick DiCosola, principal of Distinguished Dwellings, which builds estate homes in that city's western suburbs. "They like to play with the float. But we cut a check when the work is done — immediately. That's faster than anyone."

DiCosola says a lot of his trades are doing more commercial work, but he still gets the best crews because of fast pay and the loyalty he's built by being a steady source of work for many years. Our trades are loyal because we keep them busy, even when the rest of the market tanks."
When the market comes back for production builders, DiCosola says he'll still get the best crews, even when they are in great demand, because his work is steady — and he's quick to pay.

2. Build personal relationships and use small, local contractors
This tip is the other side of the pay-fast coin. It makes sense for small, custom builders to seek out small trade contractors. Custom builders usually spend a lot of time on the job site. They get to know not only the owners of trade companies, but also crew chiefs and even tradesmen. Those personal relationships still matter — especially in the custom arena, where big, expensive homes allow everyone involved to do their best work. The professional pride that engenders builds loyalty.
"We offer challenging work that stimulates their pride of craftsmanship," says Denver custom builder Tom Sattler, "but it's the personal relationship with the owner of a custom-building company that tradesmen value most. They don't get that in commercial or even in production residential work."
"It's true that production building involves fewer close, personal relationships among the people working those jobs," says Hannah. "They just crank them out."

3. Single-source; don't bid
Rather than beating the trades down on bids, to reach the new level of home prices, some custom builders are willing to open their books and show trade partners they will take a lower margin on a home while asking for a reduction in labor costs. In most cases, these builders use only one or two subcontractors in each trade. Those using two usually have a clear leader, getting 60 percent to 90 percent of their jobs. The backup is a safety net. The real reason for this approach is quality. The companies getting this preferential treatment are the leaders and best in each trade.

Interestingly, builders taking this approach are adamant they still get the price right. "We're open and honest with our trades on the cost pressures we face," says Sattler. "We partner with them, rather than sending a letter demanding 15 percent reductions — as many of the production builders have done.

DiCosola takes a similar approach: "I don't bid work, but I know what the market rate is. I tell them, 'Give me the best price you can. I want to keep us all busy!' Doing it that way, we really do get their best price. I get a price quote, not a competitive bid."

4. Run a tight ship
Having great personal relationships with trade companies and crews will not offset poorly managed job sites. Pay special attention to client selections and scheduling.

"Think from the trades' perspective," advises Southern California-based management consultant Steve McGee of Unify International, "and divide that view into two buckets. The first contains all the things that motivate trades to want to work on your jobs. Paying fast is a motivator, as are personal relationships. But the second bucket contains all the demotivators: the things on your jobs that drive them crazy. For custom builders, those are likely to involve the customer selections process and how that may affect the way work is scheduled. Extra trips really make them nuts, especially with the price of gas going up."

McGee says an efficient process for handling customer's materials and product selections is critical. "Most builders and trade contractors don't appreciate business processes enough," he says.

5. Ask for their opinion
When trade crews do outstanding work on your houses, tell them about it. Praise that comes personally from the builder works wonders. Many builders now have gone a step further and created award programs to recognize outstanding work. But Clinger says she garners even greater loyalty by asking tradesmen a simple question: What do you think?

"I always tell them how much I appreciate the quality of their work," she says, "and then, periodically, during the job, I ask them to step back and look at what they're doing. Then I say, 'What do you think?' That consultation makes them think they are an intricate part of the team and on the same intellectual and emotional level with everyone else, including the architect and builder. And they often come up with new and better ways to do things, so it's not a one-sided exercise. Trade crews become creative if you allow it to happen."

Clinger says she's now using high-gloss paint on the ceilings of dining rooms. "Painters are not happy about it at first," she says, "because it makes their work harder. But halfway through the job, I ask them to stand back and look at it, and ask, 'What do you think?' And they will invariably say, "Oh my, it really is gorgeous. It makes that ceiling pop!"
It's a simple question. Give it a try.

Not a bad situation if you think about it. How different is this thinking really from the way we should be doing this anyways?

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search
Display Modes	Rate This Thread
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode	Rate This Thread:

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
White over dark blue painted trim	Will	Painting & Finish Work	10	09-07-2007 11:56 PM
staining a pine door dark	fast pasquale	Painting & Finish Work	13	05-22-2007 11:26 PM
A REAL riddle!	AAPaint	Off Topic (Non Trade)	122	09-08-2006 05:41 AM
Roller marks in dark paint.	cutnroller	Painting & Finish Work	10	08-03-2006 11:09 PM
Really Dark Wood...Primer/Application Q	slickshift	Painting & Finish Work	13	04-28-2006 04:47 PM

Analysis of New Contractors Insurance Program in CA

Customer Testimonials ? I'll take them if you aren't using the...

Greenlee Glo-Stix...

DeWalt Self-Level...

Another Silver Lining In These Dark Clouds

Another Silver Lining In These Dark Clouds

Join Now... It's Fast and FREE!

Already Have an Account?