What Makes High-end Remodeling Labor More Expensive Than Other Contractors
There is a shortage of skilled tradesmen in the construction industry which has been putting upward pressure on the rates at which contractors must bill out their labor. Multiple factors contributed to this phenomenon, including the lack of trade school support, a large percentage of tradesmen being forced to exit the field during the financial crisis, and general preference toward safer/less physical white color jobs to name a few. This has had an industry-wide effect that has stretched across the country, especially in dense urban areas which have more firms and are naturally more competitive.
For the high-end remodeler this has had some meaningful effects on how they must approach the labor market in order to both attract and retain the top talent they need to complete their customer’s projects to the standards expected. First and most obvious is they must pay higher wages to their employees. Second is they need to offer a superior benefits package focusing on the items employees want the most. Lastly, more time is spent finding the right people as the skills and standards are generally higher across the board meaning it is more difficult to find the craftsman that can handle the many responsibilities they are tasked with.
Let’s dive in to examining these factors in more detail to get a deeper understanding of what makes high-end remodeling labor more expensive than other types of contractors. Some of these cover the benefits that the carpenters receive directly, and others are secondary considerations like extra training and skills expectations.
Higher Base Pay
There is no way around it, to even get the attention of very experienced, high-quality tradesmen you need to offer competitive wages to get the conversation started on the right foot. Wages have been going up steadily since roughly 2011 for all trades such as plumbers, electricians, carpenters, apprentices, etc.
Health, Vision, Dental, and Additional Insurance
Based on our experience having conversations with hundreds of job candidates we have found that insurance is at or near the top of nearly everybody’s list. Construction is inherently more dangerous than most fields due to the nature of working with heavy equipment, demolition, hazardous materials, etc. Therefore, many employees desire insurance beyond basic healthcare. Many like to have life and disability policies in addition, plus coverage for their family is always a bonus.
Retirement Savings Opportunities
More and more companies are offering percentage matched 401k or other retirement savings accounts to assist their employees with security long after they are done swinging a hammer. Offering to match employees’ contributions can help build a team atmosphere and make everyone feel like they are investing their time in something bigger than themselves. Other options we have seen are employee ownership of company shares and profit-sharing that is dispersed quarterly or yearly.
Vacation Time and Paid Sick Days
Just like anybody else, sometimes craftsmen need to take some time off to spend with their family or attend to their health. Having the security of paid time off ensures that employees don’t have to worry about missing out on a paycheck in order to keep their personal life in order. In the short term it is not ideal to miss out on that labor, but that sort of trust tends to pay its way forward in the form of happier employees, better work quality, and overall client satisfaction in the long term!
Additional Fringe Benefits
We have found that the more you can offer employees, the more they feel invested in the company and in doing the absolute best job for our customers. Some additional fringe benefits to consider are vehicle maintenance/gas allowances, tool allowances, performance bonuses based on achieving goals, clean company uniforms, etc. Every company is different and it is up to individual companies to decide what benefits package is right for their team.
“On the Books” Payment and Proper Insurance
Some of the biggest costs of following the proper avenues of doing business are the so-called “labor burden” of paying employees. This factors everything that accompanies the base wage rate such as payroll taxes and fees, the benefits listed previously, and probably the biggest of all – insurance! Worker’s compensation and liability insurance can add 20 cents or more per dollar paid to the labor rate, but it is absolutely crucial to protect property-owners, business-owners, and employees alike. You may think you are getting a deal by hiring a handyman who pays his team in cash “under the table” until you run into a mess of liability when one of his employees gets hurt on your property. There are lots of costs to doing business the “right way” and it is important to consider those.
Continuing Education and Industry Training
New materials and better building methods are constantly coming out and it takes a dedication to knowledge and doing things the right way to stay abreast of industry best practices. This involves taking the time to schedule and commit to attending trade shows, hosting seminars, and inviting in trade partners to advise our team on how to best utilize the people and products we work with.
Commitment to Safety
Running a safe job site is priority number one, and that takes a committed approach to make sure everything goes right every single day. Regular safety reviews, requiring proper PPE (personal protective equipment), and detailed project management are a few of the many factors that we stress. A remodeling project should be an enjoyable and stress-free experience and that starts with keeping all employees and members of our clients’ families safe.
Lead Carpenter Positional Flexibility
Many remodeling specialists utilize the lead carpenter system to help provide an excellent customer experience and smooth project delivery. Lead carpenters need to wear a lot of hats so not just anyone can do it. Not only do they need to be skilled in the field at a variety of tasks, they also take on some management and customer service responsibilities. They are your main point of contact, they keep the schedule on track, they meet with inspectors and tradesmen, and they juggle multiple jobs at once. Since they have lots of responsibility above and beyond working with their hands it can take longer to find good ones and they command higher pay than a typical carpenter.
Highly Skilled and Experienced Craftsmen
Often contractors are able to get away with hiring less-skilled labor as the projects they perform are more straightforward with less thinking and fine detail. For example, someone who installs roofing or siding all day, every day can get proficient at those skills relatively quickly. A skilled carpenter must be able to think on his or her feet and apply a huge range of skills on a daily basis. As a contrast to the roofer, a carpenter might have to plan and construct a set of stairs, install custom crown moulding, and build a vanity base cabinet in-house – all in the same day. These skilled craftsmen have spent years learning and honing their numerous skills. Much like any other career, the more you advance yourself, the more salary you can expect to earn as you move up the skilled trades ladder.
Hopefully this overview of what goes on behind the scenes when hiring the best talent has been useful in understanding the wide range of labor rates you may come across when searching for a contractor for your project. As a good rule of thumb, you can expect to “get what you pay for” just like any other product or service. Skilled craftsmen are not a commodity and they deserve to earn a fair income with benefits for the services and knowledge they provide. This is not to say that a high-end remodeler is the right fit for every job either. Sometimes, say for residing your house, it would make sense to hire someone who is less skilled overall but who is very quick at that task. Other times, say for a full kitchen remodel, you would want a team that works exclusively on complex projects who is confident in tackling any issues that may crop up. As always it is about finding the right fit for your particular project.