What do you think about the statement “for a truly good builder there is never a shortage of trades” —true or false? In teaching seminars I’ve given around the country, most participants answer “false.” But, truly good builders—who are committed to a respectful, mutually beneficial relationship with tradespeople—will never find a shortage of good, skilled trades eager to work for them.
A common builder complaint is a shortage of trades. Based upon population trends, this shortage will only get worse. The age group building your houses—18- to 39-year-olds—decreased by 12,000,000 between 1990 and 2000, and is expected to drop another 3,000,000 by the year 2010.
In addition, when it comes to career choices, the trades have fallen out of fashion, and are generally not promoted by either parents or schools. It’s not that there is anything bad with any of the trades—just that times are changing. So, with fewer people to do the work, who is going to build our homes, and what are builders doing about it? Truly good builders are dealing with this by proactively attracting and maintaining the supply of trades.
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What makes a truly good builder when it comes to dealing with trades and contractors? I’ll highlight a builder in the Midwest. A TrueNorth colleague was conducting a meeting on quality with a representative group of trade owners and principals working for this builder. He asked the question, “When was the last time you had a wasted trip to the job site in the last few weeks?” Silence filled the room. “How about the last quarter?” Still there was no response. “What about the last half-year?” The contractors shook their heads in wonder. It wasn’t until the timeframe hit a year that an electrical contractor spoke up. However he seemed to recall that the wasted trip was more because of the contractor dropping the ball and not the builder.
When the discussion moved to pricing, all the contractors agreed that they gave this builder the lowest price in that market. How did they do it? One of the contractors explained that he always knows where his trades are going to be three to four months out. If ever there is a schedule change, he’s notified with a phone call, fax, email, or a personal visit if necessary. A second contractor explained that he doesn’t have to train and educate this builder’s superintendents. In addition to making the scopes of work and expectations clear as a bell, this builder includes the contractors in many of their quality training processes and quarterly meetings. The contractors have a working knowledge of this builder’s mission, beliefs, and an understanding of the importance of receiving exceptional survey scores and delighting homeowners. A third contractor noted that because this builder encourages the trades to work together through these types of meetings, along with having a voice in the Trade Council, the contractors often solve problems without having to involve the builder. And, this builder always pays his contractors on time and treats all the tradespeople with dignity and respect. For these reasons, the contractors ensure that this builder has the best trades when they’re needed. Internally, the tradespeople compete to work in this builder’s communities.
As for profitability, the contractors noted that because of their exceptional relationship with this builder, they’re able to offer the lowest price of more than 30 other builders. But more importantly, they are able to make the most profit with this builder.
This is an example of a truly good builder, one who treats the trades with dignity and respect, pays them on time, involves trades in decisions that affect them, ensures the job site is ready, and provides trained superintendents. There will always be an ample supply of trades willing to work with a builder who goes above and beyond to develop and nurture the trade relationship.
What about you? Would you consider yourself a truly good builder? If so, then what are you doing to entice trades to want to work with your company? Send me an email. I’d like to hear what you are doing to attract and keep the best trades.
--Daron Powers Daronpowers@aol.com
Daron Powers is the Senior Associate and Director of Quality Programs at TrueNorth Development, Inc. which is a consulting and training company specializing in residential homebuilding located in Northville, Michigan. E-mail: Daronpowers@aol.com |
