As most homeowners know, there comes a time when one must remodel a part or the entirety of their residence. Sometimes, this is caused by natural wear and tear over time. Then again, there are many situations where people simply want to upgrade their home and give it a more modern look. Regardless of the reason, most individuals who have had a chance to live in their own house or apartment probably dealt with a remodeling venture at some point.
Well, in the past, going about this venture used to be as simple as finding a reputable remodeling agency and letting them handle everything. Although the process remains pretty much the same, Dean Buescher, Divisional President of Vintage Estate Homes from New Braunfels, Texas says this industry has been experiencing some issues related to the labor supply. In other words, the number of people working in the remodeling sector has declined enough to cause some concern. So, what exactly is the current status of the market and how did it get there?
Labor Shortage
The most authoritative agency in the field of remodeling, the National Association of Home Builders, recently published the results of their latest research. Although they focused on a few different topics, one of their objectives was to analyze the current availability of labor for remodeling. After conducting the necessary investigation, they showcased that there is a serious reduction in the number of carpenters, framing crews, and electricians.
Additionally, bricklayers and masons are also on the list with a minor reduction in the current supply. So, what does this mean? Well, it causes the market to experience noticeable delays in project times and in some cases, greatly increased cost. In turn, customer satisfaction rates and word-of-mouth referrals are slowly dying out. Hence why a lot of the companies that operate in the field are quite worried about the trend. After all, having unsatisfied customers can easily snowball into a very low demand for their services and, in turn, destroy their long-term profits.
Causes for the Drop in Labor
According to the Division President of Vintage Estate Homes, Dean Buescher, there are quite a few different factors that play a role here. First, it is important to consider the current state of the economy. Although it is presently thriving and the unemployment rate is lower than average, it has not been so positive in the past years. In fact, some of the recent economic downturns are still lingering with effects that continue to impact people who lost a lot of capital. Thus, the nation is just now turning a new page and truly starting to enjoy prosperity. This could mean that the demand for remodeling services will soon grow again as more people decide to get into such projects.
Another very common reason for the drop in the labor supply boils down to reduced interest. People who are learning a trade skill nowadays are mostly focused on skills that more directly relate to creating a product which can then be sold online. Additionally, a growing number of young people are choosing to go to college and acquire a formal certification in their craft. This has led to a drop in the availability of workers who are willing to devote the time to learning a craft on the job.
The Impact on the Industry
As mentioned, there are some noticeable impacts that the labor shortage has on the industry. Beyond the delays that cause customers to be less satisfied, Dean Buescher also recognizes that project prices and acceptance rates are adversely affected. For instance, the fact that there are much fewer crews working in remodeling is allowing the ones that operate to increase the prices. Well, although higher prices will yield a boost in revenues, they are not favorable in the long run. Why? Well, it will not be long before customers find the inflated costs to be off-putting. This could lead to a fall in demand for remodeling services in general. So, once the labor shortage is resolved, there may not be enough buyers to support the full workforce.
As far as project acceptance rates, the impact seems to be quite similar. The remodeling companies that are still operational at full capacity will ultimately reach a point where they cannot take any more clients. So, they may have to start declining offers or scheduling them for some later time that requires the customer to wait. Expectedly, this will again lead to a lower satisfaction rate of the clients who had to be rejected or put on a long waiting list. Thus, they decide against remodeling completely or try to do it themselves. So, finding a way to overcome the current labor shortage is crucial as it will ensure that companies in this market are not losing revenues in the long run.
