Five years ago, Shigley Construction's employees were doing virtually all of the labor required for their company's remodeling projects. Tim Shigley, the 43-year-old owner of this remodeling company in Augusta, Kan., remembers his workers as being more than a little unreliable. "I was running a day-care center. Guys had drinking problems, had background problems, were going through divorces, and had to move outside of town. It was continual."
Today, Shigley Construction works with more than 100 subcontractors who handle everything except demolition and cleanup. The company has gone to great lengths to find and hire the area's top-notch craftsmen, whom Shigley keeps track of with an elaborate "depth chart" he's put together over the years. And while his costs are higher because he uses skilled subs extensively, "so are my opportunities," Shigley says. In 2003, Shigley Construction's sales rose 8.5% to $810,000.
"I can't see the value of hiring employees who are jacks of all trades and masters of none," says Shigley, explaining his company's dramatic about-face on labor management. "I asked myself how I could afford really good trim carpenters and decided I could afford them if I could get set fees from subs," he says. "Subcontracting is the way the industry is headed, and people had better come around to that."
Shigley's argument appears to ring true with remodelers across the country. Most note, however, that they've had the luxury of working with the same subs for decades and have forged personal bonds. (Shigley says he's known his electrician since junior high school.) The closer remodelers can get to their subcontractors, the fewer the headaches they'll encounter with scheduling and quality control.
Whether such friction-free relationships can be sustained remains to be seen, because the subcontractor market is getting more competitive and more complicated. Home builders, as well as pro dealers that provide installation services, are siphoning off skilled subs who otherwise would be available for remodeling jobs. Plus, the situation is complicated by certain trades that have come to be dominated by workers for whom English is a second language.
In light of these changes, remodelers are taking a new look at how they find, manage, and retain subcontractors. Some are dangling the promise of steadier employment in front of favored subs if they will, in turn, allocate more of their time to the remodeler's company. Others note that by treating subs with greater respect -- referring to them, for example, as "trade partners" -- their companies have a better chance of holding on to them during busy building periods. That's especially important for remodelers in markets where subs tend to lean toward the highest bidder.
All Hands on Deck
Even remodelers who are big proponents of using subcontractors say they still need to be cautious about whom they hire, and they harbor few illusions about the subcontractor community's notorious shortcomings: Subs can be disorganized, undependable, cavalier about their own professionalism, and driven by price. Scott Richards of One-Stop Remodeling, Savannah, Ga., observes that painters in his market "seem to be good for about three jobs, and then they become slack or start overcharging." Richards'$1.5 million design/build firm subs out concrete, framing, plumbing, electrical, and HVAC work.
Some subcontractor shortcomings are counterbalanced by a significant benefit: speed. "They can do this stuff in their sleep," observes Leo Martineau, who owns LCM Remodeling, Merrimack, N.H. "A [drywall] crew can do a 20-by-20-foot room -- rock, mud, and sand it -- in three days, where it would take my guys a week."
Joel Oatten, production manager for design/build firm Classic Homeworks, Denver, adds that as his company has taken on more room additions, it has used framing subs with greater frequency. "They save us at least a week," Oatten says.
But getting a job done quickly and getting it done right are separate issues. Remodelers hang their competitive hats on their reputation for quality work, so they enlist their lead carpenters or production managers to ride herd on subs to ensure that their work meets high standards for craftsmanship. "If subs don't do it the way we want them to, then they don't work for us," says Daniel Ashline, who owns design/build firm Daniel E. Ashline Inc., in St. Petersburg, Fla.
One of the reasons remodelers say they prefer to work with subs they've used before is because those tradesmen know what's expected of them without having to be monitored every second. But Richards points out that subs respond better when "consistent procedures" are in place for everything from scheduling and invoice processing to how subs must comport themselves at the jobsite. "You have to be especially proactive about scheduling, because some of these guys can't think that far in advance," Shigley says. "For us, it isn't a schedule until it's written down, posted, and followed on the jobsite."
Some subs tend to work in isolation without giving much thought to who's coming in after them. So Oatten and others say they are taking more time to prep subs about when they'll be needed and what they'll be doing. Some contact subs as far out as four to six weeks before they need them. Carolyn Mc-Cown, who owns design/build firm Carolyn McCown & Associates, Culver City, Calif., gives trade contractors she's hired a reminder call two or three days before they are scheduled to arrive, at which point she'll walk subs through each project.
A more regimented approach to sub management is in place at River City Contracting, Springdale, Pa. "We control 100% of what our subs do," says Jeff Walter, the company's president. River City's two production managers supervise the subs, and the company purchases virtually all of the building materials its subs install. The subs are contractually obligated to clean up after work every day and are fined if they don't. Those contracts also help resolve conflicts that often erupt around quality issues. "Subs cry like stuck pigs when we find something wrong, but the solution is usually found in the contract," Walter says.
Standing Room Only
Treating subcontractors well pays off. Remodelers with a good reputation in the subcontractor community can afford to be choosy because the supply of qualified subs currently exceeds demand in most markets. "Subs are waiting in line to work with us," boasts Ashline, who notes that one HVAC sub his company started using two-and-a-half years ago had been trying for nine years to get work with his firm.
Classic Homeworks gets solicited by five or more subcontractors each week. But it accepts few of these entreaties because, Oatten explains, "it takes a special kind of sub to work on a remodel; it's not a 'blow and go' job."
Most remodelers would concur, which is why they prefer to return to subs with whom they have long histories. River City Contracting has used the same plumber for 35 years, according to Walter. McCown has used the same drywall and painting subs for 15 years and had worked with the same carpenter for 21 years until he died recently. "You can never really replace somebody like that," says McCown, who doesn't even feel the need to draw up contracts with longtime subs any-more. David Tyson of David Tyson and Associates, Charlotte, N.C., has approached his electricians about devoting more of their time to his company in exchange for guaranteeing them more work during the year; some, he says, have shown interest.
When remodelers need to find a new subcontractor, most still rely on the word-of-mouth reputation for quality work and reliability that subs have built up with other remodelers, supply houses, lumberyards, or their peers. McCown says that she's driven out to a competitor's jobsite to observe a sub she's interested in.
Shigley said he doesn't want his company to be held captive by any subcontractor's availability, so he maintains what he refers to as his "trade partner book," which includes contact names for 10 excavators, five masons, five framers, six roofers, four siders, four HVAC installers, and two labor companies. "Fortunately, I live in a community with only 450,000 people, and some of these guys I've known forever," he says.
Quality ... at a Price
But remodelers aren't blind to the reality that their best subs are also those who are most in demand by competitors and that booking their services will get tougher and more expensive as that demand rises. "The trades have suffered from advanced average age and a diminishing pipeline of young people choosing a career in construction," says Richard Provost, president of U.S. Structures, a Richmond, Va.â??based company with 83 Archadeck franchises. "This has resulted in a shortage of qualified tradespeople to meet the needs of the industry for the past few boom years. Basic economics tells you that a decreasing supply of a desirable product will increase its costs. Recruiting and retaining reliable, quality-conscious subcontractors will come at increasing costs over the years, and these costs must be passed along to consumers."
Tyson, the Charlotte remodeler, agrees. "Subs are becoming more expensive for a variety of reasons, and that's had an impact on what I need to charge for a job," he says. "But I don't mind paying them more as long as they are representing my company well."
For Tyson, the benefits of hiring quality subcontractors pay for themselves, beginning with fewer call-backs. "If you hire cheap you are almost always going to have problems," Tyson says.
Many remodelers have already embarked on the road that U.S. Structures now travels. Several say they have access to their subs' price lists so they can skirt the bidding process and cost out labor closer to what subs will actually charge them. And because most contracts include cost-plus provisions, remodelers aren't too concerned about any backlash from homeowners if they need to increase prices to ensure the quality of their work. — John Caulfield is a freelance writer and editor based in New Jersey.