Do you hire and train your own installers? Or do you outsource the work? The question can be vexing for floor covering retailers – particularly those who see installation as an area where they can distinguish themselves from big box competition. While the bottom line may suggest that outsourced help may be less costly in the short-term, an in-house staff ensures that the retailer has tighter control over the job. What to do?
NFT posed the question to two industry veterans who have focused extensively on installation: John Namba, executive director of International Certified Floor Covering Installers Association (CFI), and certified Master II level installer; and Gary Kloth, United Brotherhood of Carpenters and Joiners of America, and Floor Covering Installation Contractors Association (FCICA) board member.
They agree the outsourcing vs. in-house question is only one layer of the installation “onion” (see box: “Questions to Ask”). Retailers, they say, need to look at the big picture and the long-term implications of both options. They stress that retailers should make the decision with a clear understanding that installation is an essential element of floorcovering.
“As an industry, we speak of selling fashion,” says Kloth. “Installation is a managed process, not just a matter of fact or burden that must be dealt with.”
Namba adds that retailers looking for discount installation run the risk of compromising the appearance of the finished product. “You get what you pay for,” he says. “Retailers need to understand that what they are doing to blindly cut costs is a double-edged sword. Hiring subcontractors saves them money in overhead and insurance costs, yet many retailers will require subcontractors to do things a certain way as if there was an employer/employee understanding – but won’t pay for the quality.”
Both Kloth and Namba say they understand that there are fluctuations in the flooring business that can make it difficult to keep permanent staff busy. And there are, of course, other times when a sudden spike in business can overwhelm an in-house crew. Even so, they caution that retailers who play the pricing game with installation can compromise a key attribute of their business: customer service. Also, when flooring specialty stores compete by undercutting each other’s price, they can undermine the industry as a whole.
Maintaining control is the key, says Kloth. “You have the ability to mold the installer’s skills, make the installation department part of your team, build the manpower to suit your type of client or market, and train them for the products you sell. Image plays a vital role for the consumer.”
Namba adds that there are inherent problems when someone else signs the installer’s paycheck. “Unfortunately, retailers can lose control of a subcontracting staff,” he says. He notes, for example, that if retailers fail to monitor the actual hours spent by an outside crew at a jobsite, efficiency becomes a moot point.
“If a retailer has a good relationship with a subcontractor, then that’s the perfect scenario,” says Namba. Still, he adds, those who outsource the work risk using workers that may not have an adequate level of expertise. “You’ll get a high complaint ratio if you can’t call on your ‘A-list’ crew or even your ‘B-list.’ After the ‘C-list’ crew is done, troubleshooters are enlisted to clean up the mess, and you worry about the repercussions later.”
The bottom line? No matter if it was an in-house crew or outside help, if the work is shoddy, a retailer’s reputation will suffer.
Generally speaking, retailers agree that using installers who are part of their permanent staff offer a number of undeniable advantages. They adhere to your specific standards and they know how to work with customers – perhaps even driving ancillary sales by encouraging the customer to redo other floors in the house. You can also ensure that they stay up-to-date with supplemental training. If a crew member fails to meet your standards, you can make a personnel move as needed.
But what if hiring and retaining a qualified installation crew isn’t feasible? What are your options? Kloth and Namba assure using a subcontractor can be a viable (and profitable) option for the retailer, if the process is approached correctly. Those who outsource the work should communicate their exact specifications for the job. What they should not do is dictate the price of installation.
Like other businesses, professional installers have fixed costs (materials, tools, insurance, taxes, etc.) that increase each year. Retailers are often reluctant to accept such price hikes and insist on paying the “old price.”
Still, there is wide agreement among installers that those who take a low-ball approach when negotiating fees are only adding to the industry’s installation woes.
“It’s going to take involvement from everyone – manufacturers, retailers and installers – for the installation field to reach a professional level,” says Namba. “This has been said repeatedly over the years but nothing has changed. Consumers lose with substandard installation practices and products because retailers are still paying out prices or working from a pricelist that dates from the 1950s or 60s,” adds Namba.
Whether a subcontractor or an in-house installation crew is needed for the job, Kloth and Namba note that installers are an extension of a retailer’s business. They need to scrutinize the technicians they choose to represent their store: apart from their technical skills, are they courteous and customer friendly? Is their appearance professional? Is there accountability for any claims that crop up? Most importantly, will they help generate repeat business and increase customer satisfaction levels?
Namba points out that fluctuation in the business will put even more pressure on retailers to maintain high levels of service, while keeping an eye on their bottom line.
“As the floor covering industry’s economy starts slowing down, you’re going to see a weeding out phase of retailers who won’t be able to stay in business because they can’t generate enough income,” he says. “Successful retailers understand the value of a professional installer’s impact on their business.”