Editor's Note: This feature is in two parts. The first uses data and interviews with floor covering industry organizations and participants to describe the size of the shortage and how it is impacting the industry. The second part consists of interviews with the owners of companies who are, despite the shortage, thriving. Clicks these links to hear more from these companies: Plus Hardwood Flooring, Absolute Hardwood Flooring, Accent Hardwood Flooring, Kimminau Wood Floors and Focal Point Flooring. Have you been impacted by the labor shortage? Share your story in the comments.
The evening before H.J. Martin and Son. Inc., a Green Bay, Wis.-based specialty contractor, was hosting a hiring fair, company executive David Martin was feeling optimistic.
The fair had been promoted by local TV news stations and construction industry publications, and Martin said he expected a couple hundred candidates to show up at headquarters. The company had the largest project backlog in its 85-year history, and Martin hoped to hire at least 100 people, including 20 floor covering installers. Twenty current employees from the company's project management team were ready to interview the candidates and hire on the spot.
However, at 4 p.m. the next day, when the hiring fair officially began, expectations were tempered. The flood of people never came. Martin counted 48 bodies, he says, though 100 people submitted an application online. As of Jan. 6, 11 people had been hired, with plans to employ six more applicants when the project schedule allows. No flooring installers made the final cut.
Martin's experience is emblematic of something much larger: There is a nationwide shortage of skilled construction tradespeople, from wood flooring installers to carpenters to framers, that is impacting project schedules and hurting small businesses' bottom lines.
How big is the shortage?
About 1.5 million construction employees left the industry during the Great Recession, according to the Bureau of Labor Statistics. The exodus represented 19.8 percent of the industry, the largest decline of any nonfarm industry and the largest employment decrease in the history of U.S. construction.
A substantial number of those workers have not come back, says John Courson, CEO of the Home Builders Institute, an NAHB federation partner aimed at career development.
According to U.S. Census Bureau data on "Job-to-Job Flows," 60 percent of construction workers displaced by the housing downturn found employment in other industries or exited the labor market by 2013.
Today, 56 percent of builders surveyed by the National Home Builders Association report a labor shortage. Although more than 60 percent identified shortages in the 1990s, housing starts then hovered around 1.5 million annually versus 1.1 million in 2016, which makes today's labor shortage "particularly severe," the NAHB survey said.
Shortages vary by region and construction segment. The "finish carpenter" category, which includes wood floor installers, ranks second on a list of segments without enough workers. While the shortage is most evident in the West and Midwest, more than 50 percent of builders in all regions identified a finish carpenter shortage.
As the construction shortage forces builders to pay higher wages and increase home prices, they're having difficulty completing projects on time and at a profit, and some are turning down projects or losing sales all together, NAHB survey data says.
Floor covering shortage
Floor covering businesses have been impacted, as well. At peak employment in May 2007, flooring contractors numbered 88,000 strong before bottoming out at 54,500 in October 2011, according to U.S. Bureau of Labor Management data. In November 2016, the most recent data available, they totaled 71,800—an uptick but still roughly 18 percent below peak.
On the ground, that deficiency sounds like this:
"I would place a Craigslist ad, eight or 10 years ago, and the phone would go ringing off the hook. We got them easily," says Rob West, a business representative for the International Union of Painters and Allied Trades. West is responsible for finding flooring contractors for the businesses he represents in the Denver metro area. "[Today] there's so much work out there, but I put an ad out and I'm lucky if I get one or two phone calls."
One cause of the shortage is that the current construction employee population is aging, and the younger generation has not filled in the gaps.
While the median age of the entire labor force rose from 39.4 in 2000 to 42.3 in 2015, the age of construction workers during the same period rose from 37.9 to 42.7. More worrisome is that the share of construction workers ages 45–54 is about 33 percent, the highest share of that age group in all industries, according to the 2013 U.S. Census American Community Survey.
"A substantial number of folks who do have the skills and training are moving into retirement time, or they're around 50 years old and they don't want to work construction," Courson says. They're hitting a point in their lives where they don't want to install flooring, climb ladders or install plumbing, he says.
Wood flooring, in particular, becomes a hard sell for these workers, says Jason Cantin, a wood flooring inspector and owner of The Flooring Guru in Tampa Bay, Fla. A number of wood flooring installers who left the industry during the recession were working new construction, and they were "getting beat up then" and they don't think work conditions have changed today, he says.
A friend of his left wood flooring and started a gutter installation business.
"He has a good standard of living and, honestly, it's easier work than the stuff he was doing," Cantin says. "Find an installer without knee or back problems. You don't have those problems with gutters … The pay is similar, the demands on your body are less, the stress is less."
The natural turnover of older construction workers is not being counterbalanced with an influx of younger adults.
Sixty-three percent of construction hires in 2011 were less than 45 years old compared with 73 percent of hires in 2000. Eighteen percent of construction workers in 2006 were 19–24 years old compared with 13 percent in 2013, according to Census data, while employment share of this age group across all industries hovered around 15 percent, meaning that while that age group is working, there are fewer of them in construction trades.
Lack of work ethic?
Everyone has an opinion why young adults have not shown an interest in the construction trades. West says it's a "generational thing."
"I think today's generation, the younger generation of today, they lack the passion to actually go out and work hard," he says.
They're interested in technology businesses and would rather pursue a desk job than manual labor, he says. West has attempted to recruit young adults but has been met with indifference. At a recent job fair at a high school in Colorado, West says he had only one person show interest.
West has also experimented with recruiting from youth prisons. A few of the men who were hired have since gotten into trouble again, and West stopped seeking hires through the prison system.
But Courson, who oversees HBI's program to get vocational training curriculums into school districts, says the interest gap is due less to an inherent aversion to physical work and more to the expectations surrounding young adults today. For example, he says, if a student walks into a guidance counselor's office today and says he wants to be a plumber, how would the counselor respond?
"Do something with your life," Courson answers.
Parents can also reinforce negative stereotypes of manual work. They don't want to tell their friends that their kid is going into hardwood flooring installation after graduating high school, Courson says.
Or as Cantin puts it, wood flooring is just "not sexy."
Dallas Installation Summit
How to make the industry attractive to newcomers was at the center of a discussion that took place in Dallas in August at the first-ever Installation Summit. Organized by Informa Exhibitions with support from the major floor covering, stone and tile associations, the Installation Summit brought industry representatives together to examine the installation crisis and discuss solutions. Cantin was in attendance.
He said the group highlighted a number of issues that add to the perception the trade is not worth considering: Installers are getting paid the same today as they were 20 years ago, the DIY market devalues the prestige of learning wood floor installation, homeowners expect more for less, and subcontracting can lead to exploited workers.
"People hear these stories and don't want to get into the industry because of it," he says.
The solution, then, is to make sure the right stories are heard by the right people.
A wood flooring career is a worthwhile pursuit, Cantin argued in an expansive Facebook post after the summit was over. He said wood flooring installers get fulfillment from their work, can develop their skills and wages through training, and when they want to get off their knees they can work in flooring sales, management, distribution, manufacturing, inspecting, etc.
"We need to create an awareness campaign… and reach out to high schools, vocational-tech schools, military groups and the like to let people know there is great opportunity in the flooring installation fields," he wrote.
Reaching the right people
The HBI is one of a number of entities that have made headway in creating a program to increase positive perceptions of construction as a career. Called Building Careers, it's a four-year high school curriculum that includes construction-focused courses like "Construction Math," as well as hands-on training. It's currently going through testing in five school districts, with more districts expected to begin in the near future.
The program is open to all, but it is geared toward high school students who won't attend college after graduation. Roughly 30 percent of high school students nationwide who graduated in 2015 did not attend college in the fall, according to the most recent BLS data.
"You've got to find the populations out there that can benefit and are suited to this work and will accept the encouragement to get in the industry and get them the equipment to get started," Courson says. The International Standards and Training Alliance (INSTALL), an arm of the United Brotherhood of Carpenters, has found success in partnering with Helmets to Hardhats, an organization that places returning veterans into building and construction careers.
The partnership formed in April 2016 with the goal of enrolling one veteran per month into an INSTALL floorcovering apprenticeship. By November, INSTALL had exceeded its goal and had enrolled 13 veterans. John McGrath, INSTALL executive director, says he has 85 veterans waiting to be enrolled.
According to a 2015 survey, INSTALL had 2,500 people in its apprenticeship program and 2,000 waiting to get in, McGrath says. In a landscape where some wood flooring businesses struggle to hire more than a handful of qualified workers, how are they so successful?
"We're always bringing in new people, and we can bring them in because the incoming installer is entering into a career," McGrath says. "They have formal training. They have wages and raises. Health benefits. Retirement benefits."
McGrath compares this to what he considers the industry norm—subcontractors getting paid piece work and hiring helpers. "The industry hasn't paid people fairly and competitively for decades, and they never pay for training," McGrath says.
INSTALL provides good wages, professional development and benefits.
"People don't walk away from money, from lucrative, promising careers. If you have benefits and a pension, then you have a vested interest in that place," McGrath says, adding that he's positive smaller mom-and-pop businesses can offer the same to their employees even without union participation, though it might be more difficult.
Weather the storm
But while that works for INSTALL, it's not a magical cure-all. H.J. Martin, the company that was unable to meet its hiring goals in December, hires full-time employees, pays competitive wages, budgets for its staff to attend off-site training schools, provides benefits and incentivizes upward mobility within the organization.
The company also partners with veterans' agencies and local Wisconsin Department of Workforce Development chapters. It sends its top employees to teach classes in area tech schools and fast-tracks the students who show interest. It gives presentations to high school shop classes and has even held a job fair for eighth graders to create awareness about the construction trades.
But only 11 people were hired, 89 shy of the company's goal. Perhaps what H.J. Martin's experience shows is that providing a workplace where your employees will invest their time and thrive is only half of the answer to weathering the labor crisis. The other half? Grit.
Martin says they'll keep presenting at tech schools and high schools and reaching out to populations of people well-suited to construction. He remains optimistic: "If we stay top-of-mind, try to do the right thing over and over and not just go in there once a year, we'll catch their attention." The industry is going to have to get to work to get the workers.
Plus Hardwood Flooring founder Patrick Dymora is the antithesis of today's beliefs about young workers: At 23, he already operates his own wood flooring business. During his second year of college, he realized his friends who were done with or finishing college didn't have jobs or were still working the same jobs they had in school, except now with tremendous debt. Days after seeing his girlfriend's father cleaning his wood flooring equipment, Dymora was running the edger and learning the craft. It was his girlfriend's father who encouraged him to go out on his own.
He agrees about the work ethic issue. "I think the biggest obstacle most people my age face is work ethic. People have learned to rely off of their parents a little bit too heavily, not realizing that most of their parents had to work incredibly hard to get where they are today. Most people my age seem to be much more concerned about posting pictures of themselves, where they are or what they are eating instead of trying to solidify a comfortable and healthy lifestyle for themselves. However, there are also people my age who realize this, and just like myself are taking advantage of that. One of the key reasons why I initially decided to get into this industry was because of the future. I see the same things the older flooring guys see: a younger generation that does not want to work. This means much more business and profitability for the few young guys who do!"
He just loves sanding wood. "I simply fell in love with the whole aspect of working with wood in general. It was always, for me at least, almost a therapeutic feeling putting on those headphones and just spending the day sanding away on the big machine. Seeing that initial pass that takes up all the old finish and grime and makes the wood look brand new again will never get old to me."
Age was a problem at first. "My age was a very big speed bump for me initially. Customers were very uncomfortable with a young, scrawny 21-year-old kid showing up to bid their flooring project. It was a very rough start, but since then I have fine-tuned my estimation process as well as how I handle all of my media and social outlets. Now, the customers know me before I even show up to see the project. I knew people generally wanted the old, experienced veteran showing up to do their floors. But once you really open up to a customer and show them your passion and love for the craft, they begin to realize it is the young guys who are some of the best flooring guys today."
Wood floor pros adapt. "I think the labor shortage will make a lot of guys realize they need an exit strategy. However, for the most part I think everyone will be fine. This community of flooring guys is incredibly adaptive and will always figure out a way to keep things moving and projects progressing. In fact, the thing that really made me fall in love with this industry was the community. Everyone is so knowledgeable, helpful and even funny. Going into the Niles Color Center in the morning to pick up supplies almost has a 'barber shop' type of feel to it. The sharing of knowledge and help is not something you see regularly in other businesses and industries. Through flooring I've met friends I feel I will have all my life. I've been incredibly blessed to have one person in particular who has helped me tremendously throughout my business career: Tadas Sadunas, from Tadas Wood Flooring Inc. This is a man who, in hindsight, is technically my competitor. But the friendship we share shows anything but that. Thanks to Tadas I've taken my business, and just my craftsmanship in general, to the next level. There are days when we will get off of our projects and just sit on the phone talking about floors and flooring stuff for literally hours on end."—K.M.W.
Hear from Patrick about life as a young wood flooring pro:
Absolute Hardwood Flooring
West Palm Beach, Fla.
At Absolute Hardwood Flooring, owner/president Jerry Schumacher focuses on the high-end residential market on a large scale—he manages to keep a workforce of about 70 employees, and of those, currently 28 are under the age of 30.
He usually hires green workers. "It's difficult—there aren't a lot of young people who want to work, and the trades aren't taught anymore, so we are just finding people who are completely green and training them on the job. Most often I'm using Craigslist. People are very computer- and digital-oriented these days. I can run an ad on Craigslist and within two hours have people coming in and filling in applications. We look to see if they are going to fit the mold of representing our company. They have to have a driver's license, have to pass a drug test, and we do a background check. Maybe 40 percent clear that. We do a pretty good job of painting an image before we hire them, letting them know this is up-and-down, backbreaking physical work, asking, 'Are you sure this is the path you want to take?' We try to do a good job of painting that picture, because we don't want to waste the time and money investing in someone who isn't going to make it."
They have two main positions in the field. "Out in the field we have lead men and we have apprentices. Our goal is for an apprentice to become a lead man some day. They may bring 10 years' experience, but they come in as an apprentice until they learn our methods. Guys who are totally green are put out in the field with experienced guys and start doing little things as basic as sweeping and vacuuming; they will carry a lot of wood and tools—very basic manual labor. Then eventually they start working on saws making cuts and doing installs."
They get raises as they learn. "As they become more valuable, we try to pay them what they're worth, not just a 3 percent annual raise. They get holidays after 90 days, and vacation and 401k after a year. They're 100 percent vested after five years, so we try to encourage them to hang in there. We also have insurance, and we have company vehicles so we're not depending on their own transportation to get to the jobs. It's very pay-driven, and we work very hard to keep them busy, because in this industry it can be feast or famine. It can be hard to keep people if you don't have work for them."
Immigration reform could help. "I think if there are some immigration reforms that will open up some legal immigration, that could help dramatically. The immigrants tend to like the trades—it's good for them, it's good for us. But the burden of legality falls on the employers right now—we're border patrol. We have some immigrant labor now, and there's definitely paperwork involved in that. It's very important, because I can go to jail if I miss something."—K.M.W.
Accent Hardwood Flooring
In the Raleigh/Durham area, Accent Hardwood Flooring does anything related to wood flooring, and owner Genia Smith is at the helm of the company that includes 18 workers out on job sites every day. They were out en masse at the 2016 NWFA Expo in Charlotte—she paid them to experience the Expo for a day.
They rely on word of mouth. "The best people we get are oftentimes the friends and acquaintances of people who already work for us and people who are in similar businesses. My best young guy I have right now was referred to me by a woman who used to work for me; she's a remodeler and he's her nephew. I also have three brothers who work for me, and two brothers and two cousins. The last worker I hired is the neighbor of one of the guys who works for me. That's my best source."
She doesn't use job wanted ads. "If we were to hire somebody just say from an ad on Craigslist, many times I'll go through 20 people before I find one that's here two months later. Basically it's one of the hardest jobs that I know of as far as physical labor—lifting, bending over, breathing fumes and dust. It seems nobody wants to do that anymore."
She keeps her employees for a long time. "I've had three or four people who have left me and gone to work for themselves, but a lot of people, they're not really that interested in running their own business. I try to pay them well, and I have benefits. I pay 50 percent on their health insurance and 100 percent for some of them. I have paid vacations, and I give them uniforms to work in. I have a SIMPLE plan where I match 3 percent of their salaries to be in our retirement plan. I know that my workers really like the paid vacation, and if they don't want to take it, I just give them an extra check. I don't get overly involved in my employees' lives, but I make sure I speak to them every day to ask how they are doing, how the job went, how their families are, how their vacation was, etc."—K.M.W.
Kimminau Wood Floors
Owner Ben Kimminau, 41, at Kimminau Wood Floors, who runs the company along with his brother, John, 29, in the Kansas City market, doesn't have a typical wood flooring background. He transitioned from life in a cubicle at a corporate job doing computer programming to launching a wood floor contracting business. ("I never imagined I would be doing this," he says.) Yet today the company has 10 employees in addition to Ben and John, cranks out five or six sand jobs a week, and, far from experiencing a labor crisis, has a waiting list of guys who want to work for them. Some insights from Ben:
They pay well. "It's hard to know for sure what other companies are paying their employees, but I suspect we pay a little more than our competition. We start them out at $15/hour and adjust every 3–6 months. The average hourly wage is around $18/hour, and they get quite a bit of overtime, too. Some of our leads are on salary and making between low-$40,000s to $50,000, so it's a good income for them. We also pay $2,000/year toward their health care and supplemental insurance, and they receive two weeks of PTO and yearly bonuses."
They invest in their workers. "Employee turnover is a killer. Installing and sanding hardwood floors is a craft that has a steep learning curve. If we continually lose employees every six months, we won't be able to grow and develop leadership. Every successful company invests in their employees, whether it's the equipment they use or the training they receive. The key to our future success is to document our operations manual and train to shorten the learning curve as much as possible. Classroom training is nice, but learning in the field from industry veterans like Keith Long has been incredible for us. I've brought in Keith a few different times, and my brother has spent some time at his place working on custom projects. Our growth and success is dependent on our ability to rapidly train employees and develop their skills quickly to allow them to turn out a quality floor. We also do regular reviews for them to provide feedback so their skills continue to grow. We want each employee to have a strong baseline of knowledge so they feel empowered to make the right decisions. Nobody likes to be micro-managed, and when the job is complete, they have a strong sense of pride knowing they did it on their own."
They don't advertise job openings. "Now that we have a strong nucleus working for us, we've been very fortunate that they've referred several of their friends. They must enjoy working for us, or maybe they just want to drag their friends in so they can suffer together (joke). Currently, we have friends of employees who are waiting to come on board the next time we expand."
They charge more. "We're not the cheapest guys in town. If you are barely skating by and have lean margins, then you won't be able to pay top wages. On the flip side, if you haven't invested in your skills and your quality isn't very good, then you won't be able to command top dollar. You must differentiate yourselves from the competition. You can't compete on price alone; someone will always be cheaper."—K.M.W.
Focal Point Flooring
Retailer Focal Point Flooring, in the Twin Cities area, is a full-service floor store with annual sales of $22 million, 48 full-time employees and an additional 22–35 subcontractors who work for them every week. Employees range from installers and service techs to interior designers and outside salespeople, says company President Kathy Smith. In order to help keep the supply of installers, the company has begun its own apprenticeship program.
They don't feel a labor crunch—yet. "For us it isn't that bad yet—there are times throughout the year when our schedule may run behind due to a lack of crews, but generally within two weeks we are back on track. In 10 years, it might be very different because we have a lot of installers who are in their 40s and 50s, which is why we're trying to get those kids in here as apprentices."
They have 18-month apprentice employees. "About two years ago we started an apprentice program. We started with our employees and asked, 'Do your kids want to work in a trade?' We train them under our payroll as an employee. After 18 months when training is complete, if they choose to become a subcontractor, they have to sign a non-compete clause that states they will only work for us for three years (our corporate attorney helped us draft this document)."
Apprentices usually become subs. We prefer after they graduate, that they become a sub. It's far more lucrative for them—they can make six figures and make their own schedule. We really try to mentor them to be a successful subcontractor. One thing we impress upon them is that they have to pay their taxes and have subcontractor insurance coverage. Our HR person is very knowledgable and willing to help them. Most of our subcontractors have been with us a very long time. We are able to keep them busy day-to-day, year-round. It's important to them that we have this relationship.
They look to both high schools and colleges for applicants. "When our current apprentices graduate, we always want to have somebody ready to go back into the program. We look for high school graduates, and we look for college graduates, too, because they graduate with a lot of debt. They can generally make six figures their first year of subcontracting, so that's attractive to them. We start with where our employees' kids go to school and college. One of my employees just texted me a picture of a job fair poster for people that want to go into this trade. The Builders Association of the Twin Cities does a good job of soliciting apprentices to the trade, too."
The issue is different regionally. "I sit on a couple of boards and a nationwide council, and the labor issue comes up at every meeting. With the new administration, a lot of the companies from the southern states are very concerned for their installation crews because a lot of them are Mexican. Typically they're not as concerned as we are about having sufficient laborers because they always have new family members coming aboard." —K.M.W.