The Value of Tradespeople–A Moving Target
What are trades worth?
The worth of tradespeople is not top of mind. We think about it the moment we need something done. We quickly jump to “how much will I have to spend–and how can I minimize it“. This need to minimize what we pay is human nature. We love to brag about how little we paid, but, in the end, seeking out the cheapest tradesman usually sabotages the results.
I had a friend that suggested that no carpenter was worth more than 20$/ hour. This while I was helping him hang a door at his house…for free! Out of friendship! I questioned him and suggested that I could likely produce more than 3 carpenters that get paid $20/hour. He said it didn’t matter. He wouldn’t personally pay any carpenter or deck builders more than 15 or 20 per hour. It likely wasn’t his fault, his parents were lawyers and he was born with that silver spoon sense of entitlement.
To a point, as long as there is a line of people willing to perform the task for that price, he doesn’t have to change his view. Quality is not something he is capable of identifying nor appreciating, and his foresight only involves the next 30 days. Unfortunately for my friend, tradespeople are not a commodity, so his argument is flawed.
Best Deal at all Costs!
In the past 2 months, I have fielded about 200 calls, 80% of which are bound to a very rigid budget expectation. Some call and say that they already have 2 bids on their project, but in the next breath they tell me “it’s about this big”, but there are no plans or specifications. How do you bid apples to grapes? Every single builder will use different materials, methods, and techniques, and code specifies a huge window of opportunity for the dishonest builder to climb through. Most specifications in Building Code are poor quality details at best.
When somebody agrees to do a job for a set price, without specifications or designs, it can only go south. You have to trust the tradesman to provide the level of quality you expect and build what you envision with nothing in writing. Take it from somebody that has hired and fired hundreds of builders in my years. Trusting a builder blindly is a fool’s errand. Transparency is key–everything needs spelling out.
Let them Earn your Trust
How does a layman determine which trades are better at what they do?
The internet is there for a reason. Read a little about the project you are considering hiring for. Learn 2 or 3 finer points, commit them to memory and if you are considering 2 or 3 companies for a task, ask them some tough questions and gauge their reactions. Don’t let “Price”, guide you, let your gut send you in the right direction.
If it is woodwork related, learn about “Crown” and ask them why it is important. Ask about “Coping Trim”…why is it done? Ask “why do posts crack?”. If it is a landscape project ask them how long interlock lasts compared to stone. Ask about the differences between preparing a base for stone vs interlock, and driveway vs walkway. Write down all their answers. Compare.
Most importantly, ask anyone you are serious about hiring to see a project more than 3 years old. Important that it is not brand new. Let’s see the flaws…let’s see the wear. Let’s see where they made poor decisions and where things worked! This is the only way to get the true picture.
A flawed project 3 years in is obviously worth less than something aging gracefully. “How much?” is the question.
Experience–Does that Imply Value?
How long does it take to get really good at something?
I am going to have to generalize here for you. In general, the longer you do something the better you get at it–However– if you are a rigid personality, sensitive to criticism or correction and you didn’t spend time working for others, and you never return to see if what you built lasted you have the potential to stagnate. You could invest 30 years into a career and never get good at it because you didn’t learn from others and you didn’t learn from your own mistakes. You could be making the same mistakes over and over again, but you don’t know because you don’t really care.
If one deck falls down in 3 years, and the other is serviceable for 30 years, what should they be worth? It takes a few years doing any trade to get good at it, but it takes commitment to become great. You have to care about what you do, work hard and study it as well. Learn from your own mistakes and those of others. Building Code is a great thing, but it is by no means an installation manual. When it comes down to it the people that created code haven’t a clue why some decks fall off houses.
“Experience, what is it worth? Not much, but a positive attitude and a questioning nature through a long career is priceless.”
Is $15/ hour a fair wage for an Auto Mechanic?
That could be if the auto mechanic is working out of his driveway in East LA, but maybe that mechanic is underpriced or overvalued.
A mechanic really needs a proper shop with hoists, tools and all the computerized specialty equipment at his fingertips. When all that is in place their rates are between $70-150 per hour shop rate. Why the disparity? How is one mechanic, that may do a great job and be able to fix most things in his driveway be worth so much less? Why on earth would somebody want to go to a big professional shop, that pays taxes and likely benefits to their employees, warranties their work and invests in itself over and over to improve and grow in order to serve more and more customers?
The main difference is that the large shop makes sure that their employees are trustworthy, talented and capable, and when they mess up, the company fixes it. Customers take their cars to them to get fixed and not stress about the results. When you take it to the backyard mechanic, you have to ask “Judge Judy” to give you some of your money back on nationwide TV!
I used this analogy to clarify a point. Kijiji and Craigslist are just as Wild West as some dude with a toolbox in East LA working out of his driveway. Taking your car to some sketchy guy in a back alley to fix it is one thing–inviting some guy that put up a free ad on an internet directory to hang out at your home is asking for real trouble. That’s where you live! Not only might they botch the job or steal from you, but without liability insurance, workers comp and a business license you open yourself up to real losses. Ie, one of his laborers falls off a ladder and paralyzes himself–and you get sued. Your insurance company says, no, they are not covering it because you hired an illegitimate business–which is the same as doing it yourself. You could be on the hook for millions in damages.
Some things are not worth the risk.
There are handymen, carpenters and landscapers working out of cars and pickup trucks all across the globe and some are technically good at what they do. Most of them are charging so far under the going rate that it makes the legitimate trades look like criminals to the uneducated eye. You cannot expect a professional to work for Craigslist prices. We both know that when you hire for a ridiculously low price you should be breaking out in a cold sweat expecting to be taken.
We get people saying that “I have quotes for 1/3 of your price, are you taking advantage of me?” Handling this tactfully is tough.
You are an experienced business person with thick skin, but every time you hear this a wave of sadness washes over you. You know that when you hear this, 9 times out of 10, you won’t be doing this job and the client lacks common sense. I explain it this way.
“…every year there are 700 new deck companies in our area…”
Guys with questionable experience that for some reason believe they are better at this trade than the guys that have been doing it for decades. They have zero overhead, no business training and in many cases can’t even do an estimate correctly. They are doing the work for free or at a loss but they don’t figure that out until they don’t have the money to pay for materials. The whole house of cards comes crashing down about July-August as they burn through deposits, about 90% are gone mid summer. As they abandon customers mid-project, or often before they start, I often get the call. Usually 30-40 per year. That said, I haven’t had the first one yet this year. Do you have my number on your phone yet?(you need to smile when you say that last part).
Tradesmen as Performing Artists
I see the best tradesmen as rock stars, doing their thing with smiles on their faces. What the best builders do can be as intriguing as art. (Not to devalue the designer’s part in the process), but when details are well done I find myself lost in the beauty of the finely crafted connections. I admire so many of our builders and wouldn’t risk losing them. Elite Tradesmen have to be paid well for what they do or they will be gone.
When you compare what elite tradesmen build to the average builder’s work, they barely resemble each other. Dive into when it is 10 years old, and they really look nothing alike. When one project ages so much better than another, and was more beautiful to start with, what is the effect on value?
Trades that want to be known for being the best _______s (fill in the blank), you need high priced talent. If you are the low bid, you cannot afford to pay high priced talent. It’s that simple.
“Low bid builders are never the best at anything–they cannot afford talented employees”.
Reality TV’s Muddied Waters
People are confused about what it costs to renovate or build things for good reasons. TV shows routinely refer to the elusive $5,000 decks. This is not helpful. People often call and have no clue, and every time I hear that I brace myself for the $5000 number. I explain that our average deck is about 25k and some people are astonished and even angry? They often demand to know why?
There are a couple of things going on here. Fishing is one thing happening. Some people see tradesmen as a commodity, and personally, changing people’s attitudes about that takes a large investment of time. To be candid, I qualify them out on the phone as quickly as possible. These folks assume that if they give an unrealistically low budget up front, it will cause you to keep a sharp pencil and benefit them in the end. Unfortunately for them, these days, the good builders are also interviewing their customers during the first contact.
Others have a preconceived notion gained by watching hundreds of Reality DIY Television shows quoting pie in the sky, happy numbers. They are selling a dream, a fantasy. A perfect ending. If they are quoting numbers and they want to make the general public believe that a home improvement is achievable, which makes them happy and in turn improves the show’s ratings they need to lowball it. $5000 for a deck, $15000 for a kitchen, $100,000 for a whole house reno… neat tidy numbers and achievable to viewers in general.
Kudos to Brian Baumler, The Property Brothers and Paul Lafrance for not lowballing… (much). If more TV personalities could give realistic numbers it would make life so much easier for all tradespeople in general.
There is a dance going on between the trades and homeowners. It has been happening forever. The information age is giving homeowners access to expertise like never before, and also giving the tradespeople access to information that helps them be better in business. At the same time, due to the downward pressure on the value of trades during the Made in China Era, where everyone was using the trades as a fallback, there is a serious shortage of qualified tradespeople.
We are entering the guilded age for tradespeople! I expect many will become wealthy in the coming years.