To understand the state of the construction industry in West Michigan, a check-in with trade contractors is a necessity.
Trade contractors are responsible for much of the actual construction portion of a building, so the trends those companies experience are crucial to understanding the struggles that lie ahead, even in good economic times.
Nearly all trade contractors are experiencing full workloads, according to several West Michigan trade executives.
Workloads for some contractors are such they are becoming picky about who they work with and what projects they take. General contractors and construction managers have preached the need for more skilled labor to fuel the projects in the pipeline, but it’s the trade contractors who provide much of that skilled labor, said Tony Vermaas, president and CEO of Sobie Company, a dry wall contractor.
“Five or six years ago, the script was flipped, and we were begging for work,” Vermaas said. “Now, it’s general contractors courting and locking in with trades they can find that will be along for the ride in the long haul.”
For many companies, there is no such thing as too much work, but when skilled labor is an issue, contractors must limit their projects.
“There’s enough work out there if we could hire a bunch more people, we’d go after more work,” said Matt Fennema, vice president of Kent Companies, a concrete contractor. “It’s hard because you don’t want to say no to a good customer when they’re trying to work with you. On our end, it’s very key to project out and not overcommit.”
Electrical contractor Windemuller Inc. is limiting the growth it undertakes, opting for a more sustainable growth pattern, said Steve Alles, Windemuller CFO. Adding workers to supply major projects isn’t a viable pathway, lest a company end up laying people off as it might have during the Great Recession.
“We’re trying to be smart in our growth, trying to make sure it’s organic,” Alles said. “Not necessarily grow through massive projects. In our business and the economy we’re in, those are necessary projects, but that’s not how we want to grow the organization.”
The industry trade groups, like Associated Builders and Contractors, are promoting the skilled trades as a viable career option for many, especially K-12 students, and much of the industry is “turning rocks to find people,” according to Vermaas.
Sobie Company isn’t having an issue finding people, however, and has hired 12 employees in six months, in part because the company is focusing on providing an attractive workplace. The past year, Sobie Company has rolled out multiple perks, such as bonuses, a new truck fleet, employer-paid disability and life insurance and additional vacation time.
“It’s a lot of things for in-house employees, which is naturally an enticing thing for others,” Vermaas said. “Create a nice lawn, and people want to sit in it.”
Fennema said for Kent Companies, it can train skill but not attitude. The length of training will depend on a candidate’s ability to learn. Many of Kent Companies’ larger projects are repetitive pouring patterns, so a worker could learn within two weeks.
“Trust is built in the field,” Fennema said. “We push the envelope on how quickly we can get someone skilled. We try to provide various training opportunities and try to push them through it to see what sticks. It’s not too hard to find general labor and bodies, but you have to continually do that to find the diamond in the rough.”
Workers should be in demand for several more years, as most West Michigan contractors don’t see a slowdown anytime soon. Vermaas said Sobie Company has a four-year backlog of work.
Kent Companies is finishing pouring concrete on one wave of major developments and starting another.
“West Michigan is extremely strong. We’ve been so repressed — it was such a big dip — developers wanted to get going and now it’s bursting forth,” Fennema said. “We think we can have a few-year run with it. There’s a lot of really good stuff out there.”
Several in the industry, including Vermaas and Fennema, have discussed the trend of more trade contractors being brought in as investors and initial planning phases of projects. Bringing trade contractors — and other partners, such as architects — into projects at the ground level ensures all parties are on the same page and increases project efficiencies, according to Vermaas.
“The construction managers and general contractors thinking about front end, those getting us involved early have a leg up over the competition,” Fennema said. “The ones that really focus working with trades and have a team atmosphere, in my opinion, have a leg up. It makes our jobs easier, and it’s like we’re helping drive the bus for them.”
With trade contractors’ hands on the wheels, schedules are easier to keep, an important aspect of making sure contractors can keep as many projects as possible going.
For Kent Companies, that gets back to the pledge not to overcommit.
“Whatever company I’m working for, if I say I’m there June 1 pouring footing, I’m going to be there,” Fennema said. “You can name little things that pop up and you get behind, and the whole schedule moves around.”
In an ever-changing industry where schedules can change in a heartbeat, technology is beginning to makes presence necessary as well, Alles said.
“Technology is changing how we do our work, and there’s much more emphasis on pre-planning, because if you have a better plan going in, you’re more likely to execute better when you get there,” Alles said about technologies allowing for more prefabricated packages. “These technologies are coming at such a fast pace, it’s hard to know which ones you really want to make a significant part of your business. You really need to make sure that, maybe not the leading edge, but you’re keeping up with technology, because if you’re not, there’s a good chance you’re gone.”