Internet, immigration, regulation. Get used to those words—you’ll be hearing a lot more of them in the future. Remodeling on the whole is changing, and rapidly. The Internet plays a bigger and bigger role in doing business. More and more customers have smartphones—and smart appliances—that connect over Wi-Fi. If you don’t have company Twitter and Facebook accounts, a Houzz page, at least a dozen Yelp reviews, and (depending on where you live) an Angie’s List profile, you’re probably not getting the most out of your digital presence. As the face of technology changes, so too are your customers. Demographic shifts driven by immigration mean a more diverse list of clients than ever before. Your customers will speak a multitude of languages and belong to more cultural subsets, and you may miss out on business if you count solely on word-of-mouth advertising through your traditional clientele. And if you’re not on the up-and-up with current regulations, you could find yourself on the receiving end of a hefty fine.
Significant as those external forces are, there’s another internal trend in our industry that’s just as big: remodeling’s evolving workforce. Right now, contractors across the country were born in more countries and speak more languages than possibly at any time in the past few decades. And don’t forget: We’re in the middle of a job shortage. If you don’t embrace these kinds of cultural changes, you could end up missing out on hiring quality employees. If you’re at a loss on how to do that, borrow from some companies that already are. Here are three multicultural remodelers—in Dallas, New Orleans, and New York City—that today resemble what tomorrow’s remodeling companies might look like.
Melinda Dzinic, Euro Design/Build/Remodel, Richardson, Texas
Melinda Dzinic knows a thing or two about the importance of diversity. Her family immigrated to the U.S. from the former Yugoslavia when she was just 11, and starting out was a struggle. “In the beginning, it was very difficult for me to communicate,” she says. “But the more I got immersed in it, the easier it became.” As an adult, Dzinic wasn’t a remodeler. Far from it—in fact, she worked in the dental industry. After refugees with remodeling skills began fleeing the civil war in Yugoslavia and started migrating to her Texas neighborhood, Dzinic felt an immediate kinship and realized her true calling. Together with husband, Seval Dzinic, a Bosnian refugee himself, she founded Euro Design/Build/Remodel as a way to help integrate her unemployed immigrant neighbors into their new home.
“To come into a country and not speak the language is pretty deafening and isolating,” Dzinic says. “When you find people who understand you and you have the ability to excel at what you do, it really makes a difference.” Back in their home countries, the refugees had been carpenters, electricians, and flooring installers. Based on their past experience, it was clear to Dzinic that they would be a good fit. They just needed the chance to do what they were good at.
“I knew they had the integrity,” she says. “I could trust them to do a really good job.”
But there was a problem: None of her workers spoke English. “In Texas, it’s either Spanish or English,” Dzinic says. And although both she and her husband understood the immigrants’ native language, the rest of the surrounding community didn’t. Another problem was that, as talented as her new employees were, they were unfamiliar with the newer technology on the market. So Dzinic took on another role—that of teacher.
Each night after closing up shop, Dzinic would hold hands-on training sessions in the back of the office for employees. It wasn’t always easy. “You have certain things that just don’t translate, and you also have a cultural barrier,” she says. “I [too] had to learn a great deal.” But it’s clear that the training paid off. Over the next 16 years, Euro Design/Build/Remodel grew to become a million-dollar business and a full-time job for its founders. Some of Dzinic’s original employees have gone on to do other work, and three even run their own hardwood flooring business. The Dzinics’ employees get 401(k) benefits and, most recently, profit sharing.
Do the Dzinics still hire immigrant workers? You bet. As its original refugee workers left, the company filled the gap with employees who come from south of the border. Nowadays, the company is a melange of both language and culture. “The crew melded together so beautifully that even my Bosnian and Croatian crew speaks Spanish, and the Spanish-[speaking] crew speaks Bosnian and Croatian,” Dzinic says. “They feel like they’re part of this community.”
Fernando Arriola, New Beginnings Enterprises, New Orleans
What might the successful immigrant remodelers of tomorrow look like? They might look a lot like Fernando Arriola, owner of New Beginnings Enterprises, in New Orleans. Since buying the company in 2005, Arriola has earned certifications in lead paint, green remodeling, and aging in place, and has served as member, chairman, and president in organizations such as the Home Builders Association of Greater New Orleans, the National Association of Home Builders Remodelers, and the Louisiana Hispanic Chamber of Commerce.
Like many U.S. immigrants, Arriola found that the road to success was paved with challenges. When he and his family moved to the U.S. from Guatemala in 1970, Arriola had a hard time fitting in at first. Arriola wanted so much to learn English that he would ask his friends to correct him whenever he said a word or phrase wrong—an uncomfortable, but helpful exercise.
In college, Arriola worked hard to get a business degree, and for years, he made his living working in sales. But Arriola, who when he was younger wanted to become an architect, had other aspirations. “I always wanted to do remodeling, basically flipping houses,” he says. Then, in 2005, Hurricane Katrina devastated the city, and Arriola saw his chance to break into the industry.
“I thought that it would be a perfect time to buy houses that were damaged and pick them up and sell them,” he says. So he contacted a friend, who ran local firm Yoni Construction, for tips on how to get started. Instead of leaving the conversation with advice, he left with a remodeling company; the friend had talked him into taking over the business.
The first order of business? Change the name to New Beginnings Enterprises, which reflected his vision of a new beginning for New Orleans.
Second? Learn the trade. He joined NAHB Remodelers, which helped him along the way. “In the first three years, I got 15 years worth of experience,” Arriola says. “The organization is incredibly unselfish.”
Around the same time, Arriola noticed an influx of other Hispanic immigrants following in his footsteps. And, as a member of that community, he says that he was able to hire a talented group of Spanish-speaking workers. “There would always be somebody that knew somebody to help me out,” he says.
Though the labor shortage was in full swing, Arriola found he had no trouble hiring good subs who, because of their challenges speaking English, slipped under the radar of native-born remodelers. In fact, he had so many workers to choose from that he ended up turning many away.
“It gives me an advantage,” he says. “Definitely.”
Ask Arriola if he views himself as the kind of remodeler that we might see more of in the future and he’ll reply with a firm no. But that’s because he believes we’re seeing more of remodelers like himself now, from all across the globe.
“I wish I could learn Portuguese and Vietnamese,” Arriola says with a laugh. “Then I’d be really set.”
Keith Steier, Knockout Renovation, New York
Sit down for a meal at any home in New York City and the odds are only 51% in your favor that the people living there will speak English. Roughly 37% of the city’s residents—3 million people—are foreign-born, and 60% are first- or second-generation Americans. City officials argue that theirs is the most diverse city in the country.
It seems natural, then, that New York City would have some of the most multicultural remodeling companies in the country. Keith Steier’s business, Knockout Renovation, is one such firm. Across its 22-year history, the company has witnessed the city around it morph and change as people moved in and out of the metro area. Steier says that his company employs tradespeople from Hispanic, Asian, Albanian, Russian, and Polish backgrounds, some of whom only recently moved to the country “You find well-qualified people from all over,” he says.
Though Steier stresses the value of basic English skills when hiring, he finds that knowing a foreign language can come in handy, too. “If my guys can speak the same language as the super and the elevator operators, it immediately creates a synergy,” he says. On the job, it’s not uncommon to hear Steier’s workers speaking Spanish, Russian, French, or Arabic. And he says that’s not that uncommon for the city.
In fact, during the past decade, Steier has noticed more and more remodelers and clients from a variety of cultures and backgrounds. “You see a lot of companies of all different cultures not only coming up and growing in NYC,” he says, “but you also see them broadening their market by gradually becoming more familiar with and interacting with other cultures.”
Steier adds that hiring immigrant contractors for work is not only useful, it’s a necessary part of doing business in New York. “If you don’t speak the major languages, you’re missing out on that entire segment of the sales market,” he says.
In some ways, the city might represent a future snapshot of the rest of the country. First- and second-generation Americans are becoming increasingly common in the U.S. population. (See “Punch List,” page 15.) That increases the likelihood that people from all walks of life will interact. And Steier says that’s a good thing for the industry.
“It breaks down some of the stereotypes when people are working together from different culture,” he explains. “Everybody’s got skills to bring to the table.” And if his backyard represents the future demographic makeup of remodelers, then it might be wise to pay attention to who Steier sees as the next generation of leaders at his company.
He tells the story of one of his foremen, a first-generation American from Albania, who started out as a subcontractor’s apprentice. After five years on the job, the apprentice asked Steier if he could assemble his own crew. Steier said yes, and reaped the benefits. “They’ve become one of our top carpentry crews,” he says. “Eventually, if he wants to do it, I want to move him into more of a supervisory role.”
By 2050, 19% of the estimated 438 million Americans will be foreign-born, according to a 2008 projection by the Pew Research Center. That would be the highest percentage share of foreign-born people in this country since the late 19th century, when it peaked at 14.8%. The Pew report also predicts a decline in America’s Caucasian population—down to 47% in 2050 from 67% in 2005—and a jump in Americans who identify as Hispanic, to 29% from 14% in just 45 years.
What does this mean for remodelers?
The answer depends in part on where you live now. Plenty of remodelers who live in states with currently high Hispanic populations may already be catering to bilingual customers. Meanwhile, a higher share of Hispanics in the population presumably leads to a higher share of Hispanic contractor managers and subcontractors as well.
On average, Americans will also be older by 2050. Though most baby boomers will be long gone by then, their descendants will have some of the same home design challenges that some of us are facing now. According to the same Pew study, 19% of all U.S. citizens will be age 65 or older in 2050, as opposed to 12% in 2005. Though it’s exciting to speculate about what kind of cool sci-fi technology might help us get around in the future, you can bet that the physical limitations of an aged body won’t change much. Therefore, it’s safe to assume that many of the core principles of universal design and aging-in-place elements will likely hold true 36 years from now. Designs that optimize ease of access, provide adequate lighting, and offer fall-proof surfaces and railings for stability are increasing likely to be included in future home renovations.
Laptops, smartphones, tablets ... ovens? It’s only a matter of time before many of our home appliances connect to the Internet. According to a 2014 Pew Research Center survey, 58% of U.S. adults have smartphones, and the younger you are, the higher that share is. For instance, 83% of respondents between the ages of 18 and 29 owned smartphones. As your clients become more tech savvy, so will their appliances.
Take, for example, General Electric’s Brillion mobile app designed to operate a homeowner’s appliances from afar. In September, GE released two ovens that can be preheated or monitored by that app. Other new-ish trendy products include Heat & Glo’s IntelliFire ignition system, which lets users control flame height and temperature over their Wi-Fi network, and Keen Home’s Smart Vent, which opens and closes at the swipe of a homeowner’s phone or tablet.
Smart thermostats also represent a popular new trend in appliances. Google’s Nest makes one of the most well-known smart thermostats on the market. But the popularity of Nest has given rise to other smart thermostats, like Honeywell’s Lyric, which even resembles Nest both in its functionality and disc-like design. As if touchscreen controls and Wi-Fi functionality weren’t advanced enough, there’s a voice-activated, Siri-like artificial intelligence called Ivee that aims to manage any home device it can connect to.
In a way, this current trend of smart technology mirrors the conceptual automated homes of tomorrow that were touted back in the 1950s and ’60s. Although those robotic homes never came to fruition, the Internet may finally help realize some of their potential.
In the second quarter of 2014, review website Yelp amassed nearly 138 million unique monthly visits. Houzz, a website that shows design possibilities and connects clients to professional remodelers, claims to have more than 20 million monthly active users. And as of June 10, Angie’s List said that it has nearly 2.6 million paid subscribers.
All this might seem irrelevant to remodelers who have built a business on word-of-mouth advertising and personal referrals. But for future growth, it’s increasingly likely you’ll need to have an online presence that permits potential clients to find, learn about, and hire you. That includes running a robust website (one that looks good on a smartphone as well as on a computer) and maintaining a presence on social media.
What works? A quick Houzz search filtered by top-reviewed firms shows that the more popular remodelers are uploading pictures of past projects and providing plenty of detailed information. According to a May 2014 Houzz survey, 26% of its registered users most often seek out information on bathroom and kitchen remodels and additions. And contractors with high ratings also tend to tease users with high-res photos of those rooms.
It’s not all pretty pictures, though. Leads from social media sites often aren’t as solid as from referrals by past customers. And remodelers who have gotten flamed by a bad review on Angie’s List or Yelp often would just as soon see those sites implode. But all signs point to an increase in the number of remodeling-related social media sites as well as an increase in the amount of traffic on them. Take care with both sides of this two-edged sword.
Some veteran remodelers say that they have never been regulated as much as they are today, and there are no signs that the pressure will ease.
Just last month, the Occupational Safety and Health Administration (OSHA) announced a new rule effective Jan. 1, 2015, that requires you to report within 24 hours if one of your workers gets hospitalized for work-related reasons, has a body part amputated, or loses an eye. In the event that the worker dies, you must report that news within eight hours.
If you think OSHA’s not serious about violations, think again. Since 2009, it has issued a total of 426,838 violations.
Meanwhile, upward of 200,000 remodelers who were among the first to get certified under the lead-paint rule now are in limbo. The Environmental Protection Agency wants to permit the entire recertification course to be taken online, but putting that change into effect is likely to take it to, at best, just days before the July 1, 2015, date for the first wave of recertifications. (Turn to page 16 to read more about RRP and online certification.)
Then there’s the upcoming silica rule, also crafted by OSHA. This proposal would lower the permissible exposure limit of crystalline silica for the construction industry, possibly raising the cost of doing business and upping the amount of employer safety violations.
Opponents of the plan say that there’s a significant disparity between the economic costs to industry that OSHA originally estimated—roughly $511 million—and the economic impact that industry analysts believe the rule will entail—at least $3 to $4 billion annually.