Even with the specter of a cooling housing market, chronic labor shortages remain top of mind for most home builders. Are these shortages an intractable problem? I can't answer that question for you, but I can offer some advice that has made it a nonissue for my company.
Are there enough trades? Start by asking yourself if there are enough local trade resources to build your homes. Chances are the answer is yes. At my firm, Thrive Home Builders, we ask the question this way: Are there enough good trades to build 250 great houses per year in Denver? In a market that builds well over 10,000 new homes per year, of course there are.
So, the more relevant question is how to get them to work for us rather than for another builder. In other words, how do we become the builder of choice for those trades?
There's no shortage of advice on this topic, but I suggest you begin by showing simple gratitude and appreciation for the hard-working people building your homes. This is so rare that extending it will really make you stand out.
For us, it starts on the jobsite. We have a simple practice: When our superintendents see a job well done, we ask them to thank the crew members who did the job. Then we ask our superintendents to send an email to the owners of the company and to copy me on it. When I get my copy of the email I contact the owners and ask them out to lunch to thank them for their work and to ask how we can do more together.
One of our top framers told me that when a crew receives this type of recognition, each crew member gets a spot bonus. Really? Because we expressed our gratitude, crew members get paid better? While I doubt that happens every time, I’ll bet that crew is very happy when they return to our jobsite.
Appreciation for work well done is one of the things that make trades want to work for us. For example, a few years ago after our annual Trade Partner Appreciation Dinner, I got a call from Holly, the owner of one of our plumbing contractors, asking if I was available for lunch. I incorrectly assumed that this would be a private gripe session. To my surprise, she thanked me for the appreciation dinner and said, “Nobody ever thanks us for anything.”
In addition to working for Thrive, which is a relatively small production builder, Holly had also been working with one of the area's biggest builders. She told me that she had decided to sever ties with them after becoming worn out from the challenges of trying to meet their demands and never getting any appreciation for that effort.
“I have 33 good plumbers," she said. To service the big builders, I have to hire people who aren't as good, and then I have to send one of my good plumbers to clean up their messes.” She went on to say that she had decided to live within her existing labor resources and to be choosier about whom she worked with. “I want to do more with builders like you.”
Honestly, her work costs a little more, but we found a way to do more together. Now she is among our most respected subcontractors and a valued member of our Vendor Council. I count her as a friend. When things don’t go well, we don’t deal in threats. We work them out.
Another time I was copied on an email complimenting one of our excavation contractors. I reached out to the owners, Juan and Tony, but didn’t get a response. The next week I followed up and I got a one-line email reply saying that the two partners agreed to have lunch.
Two visibly uncomfortable men showed up in our lobby at the appointed time. They thought I was going to fire them. When we settled into our seats at a nearby pizza restaurant, I asked how many builders they worked for. Just one, they answered—us. Our construction and purchasing team had put them into business, and I didn’t even know it. I also hadn't realized how loyal they were to our company.
How many employees did they have? Just the two sitting in front of me. They are Mexican immigrants who legally came to the United States and gained citizenship in 1999. They asked me a piercing question: “Can they take that away from me?” They told me their story of coming to the United States, working their way up and finally owning their own company.
We used to call that the American Dream. Of course, our industry has appropriated that term to apply to homeownership. I agree. But surely America should still be about opportunity for hard-working people like Juan and Tony, and home builders should be in the business of encouraging them.
Is it really that simple? Yes, all the aspects of being the builder of choice we hear about — clear scopes of work, timely payment, job readiness — are true and necessary. But, for me, gratitude and respect for the men and women who build our homes has been the easiest and best place to start.