It’s been widely accepted that the biggest problem facing the HVAC industry is the shortage of skilled labor. According to the Bureau of Labor Statistics, this reality is not forecasted to change anytime soon. They estimate that in the next 3 years, the industry will need 50% more skilled technicians that we currently have. That’s a huge deficit, and while Federal and State Governments are working to bolster worker training programs, it doesn’t help HVAC business owners now.
This might be great news for current HVAC technicians, (as higher demand for their skills means higher wages) but its terrible news for the HVAC business owner.
Out of necessity, some owners are changing their strategy to remain competitive – and they’re having good results.
Once such business is Fox Family Heating and Air. Owner Greg Fox credits the HVAC industry for rescuing him from a life tending bar. Starting first as a helper, he quickly advanced and was thriving as a project foreman. Eventually, he amassed enough skills and courage in 2015 to go out on his own.
He has brought that same “grow your own talent” strategy to his own business. He admits when starting, he needed two experienced techs. After that, he hires primarily for character and potential – no industry experience.
“I look for fit, humble and teachable guys. Find good people and teach them the business” he advises.
While that might be easier said than done, Fox follows through using this advancement model. For the first 90 days, its a probationary period where they are paid $15-$20 per hour (California market). After they have demonstrated they have an interest in the industry and are a good fit, he gives them a slight bump in pay and responsibility. They ride with a more experienced tech and mostly observe. “I like this strategy because it exposes them to multiple brands of equipment and helps build their confidence,” Fox says.
In about 3 months they do an evaluation and determine if the new technician is competent enough to do maintenance calls. If they reach this milestone, they will get another wage increase.
In 9 months, the technician should be ready for most service calls and earn another raise.
Fox shares, “I like helping someone better themselves by introducing them to our industry. It gives me a sense of satisfaction, but it’s also out of necessity. I wouldn’t be able to afford to hire industry veterans every time. It’s a win-win for everybody.”‘
Business Broker, Patrick Lange agrees. “One of the hardest things to do in this business is to hire effectively. However, if you can crack the code and move beyond being a single guy in a truck, you will increase the value of your business exponentially. To do so means getting comfortable with taking some risk. Be patient, and mentor.”
According to BLS, the average annual salary of HVAC Technicians is $48,320. Their salary can also be as low as $28,440 if you’re still a newbie with no experience, it could be over $73,350 if you have a ton of experience under your belt.
Lange furthers the case for hiring green.
It builds loyalty
Showing a career path to a young person with only a high school education gives them hope and fans the flame of ambition. Good people will feel grateful and appreciative. In Fox’s company, he hired a Starbucks manager eager to trade the sound of screaming blenders for the drone of residential air handlers. “He loves the blue-collar lifestyle now and is appreciative of the opportunity.”
It’s less expensive in the long run
Depending on your market forces, hiring an experienced tech can cost $70,000 or more per year. Worse yet, there’s little room to give them salary increases or performance bonuses without crushing profit margins. “Every technician gets frustrated when they feel their opportunity-and income is capped.” Lange comments. Whereas when you hiring a greener person, you have a progression plan that can be stretched out years. Employee retention is cheaper than turnover.
It gives you a competitive advantage
For those big jobs you may be in a competitive bid situation. Having up to 25 or 50% less labor costs helps you be flexible enough to win the business and still maintain a healthy profit.
Your company will be worth more
Buyers take a deep look at the company’s financial performance and stability of employees. Having labor costs under control while maintaining profit margin means you have a highly valuable business.
Avoids the bad actors
Superstar technicians are rarely unemployed. If you find a tech that looks good on paper, yet another HVAC owner let him get away, be suspicious and cautious. Young talent doesn’t come with bad habits learned from your competitors.
Bringing new people into your company is never easy, but with some creativity and patience, you can find the right individuals hungry for a shot to spend a career in an industry with enormous potential and job security. Lang concludes, “You’ll have some bad hires along the way, but stay the course, and follow the old Brian Tracy mantra of ‘Fire fast and hire slow.’
About Patrick Lange:
Patrick Lange is an experienced HVAC specific business broker with Business Modification Group based in Horseshoe Beach, Florida. He has a unique background in financial planning and has even owned an HVAC business himself. This makes him well suited to working with some of the most successful HVAC business owners in the country. Specializing in companies with 1-10 million dollars in revenue, he maintains a network of buyers and sellers in the industry. He has sold more HVAC businesses than any other broker in the United States over the last 12 months and is currently the Vice President of the Business Brokers of Florida (North Florida District.)