The Floor Covering Leadership Council (FCLC), an organization of flooring associations, released highlights from an independent study it commissioned last year to “quantify the scope and severity” of the installation labor shortage within the flooring industry.
The study, conducted by Blackstone Group, had more than 300 participants that included flooring subcontractors, installers, retailers and suppliers from 45 states.
The research found that the shortage of available installation labor is having a measurable financial toll on the industry, impacting 3.8 percent of revenue for flooring businesses in 2017.
“The study concluded that not only is the labor shortage real, but its financial impact up the flooring supply chain is significantly more than previously understood,” FCLC said in a statement.
Reliance on subcontractors was found to be widespread in the industry, with one in four companies surveyed using subcontractors exclusively.
“The benefits of subcontracting to lower risk remain compelling enough that no greater shift to direct employees was being planned for 2018,” FCLC stated.
A majority of respondents did not plan on raising wages for direct employees in 2018, despite a widespread perception of the labor shortage, as well as a 3.9 percent increase to the costs of subcontracted services anticipated in 2018.
In an effort to manage risk, the study found that businesses have been using diversification as a core of their business strategy, with almost all of the respondents selling floor covering products as well as providing installation services, with earned revenue from more than one construction sector.
The study also identified gaps in the workforce, including the continuing challenge of recruiting young floor covering installation workers.
FCLC said it will release additional details from the study in the upcoming months.
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