Contractors pass business down to new generation that faces new challenges:
The electrical contracting industry as a whole has experienced numerous changes over the years, both major and minor, but today the future is looking brighter than ever. One major concern has been the aging of the industry toward and its effect on the younger generation. The demographic of aging contractors is fueling a demand for the younger generation to step up.
“Seven or eight years ago, within the Local 103, we took a look internally at the list of signatory contracts and found that it was aging significantly,” said Mike Monahan, business manager for the International Brotherhood of Electrical Workers (IBEW) 103 of Boston. “It was a real concern of ours. We had a relationship with all of the owners and knew they were getting older and would one day retire. We weren’t sure what would happen when they retired if they would shut their doors or pass the business along to someone else.”
For a period of time, there was some concern over where the industry was headed. It was faced with a number of crises that threatened to eradicate the strength of the whole industry. As companies and individuals have an increased amount of money to spend on electrical installations, there is a need for more contractors to service these customers. “We were concerned with these employers and what the future held,” Monahan continued. “We put on business seminars from SCORE to promote electricians, who are employees. Many have gone on to open their own business and are now successful contractors.”
Aging contractors presented an industry that needed to defend its business model against technology, rapidly changing demographics and declining consumer contact. As a result, today, technologically savvy contractors understand the necessity to gain advanced knowledge and training. Family-run companies were once faced with conflict within the workforce, but the younger generation seems to have capitalized on these challenges.
“For the most part, these contractors are in their 30s, and they are the future of the organization,” Monahan said. “We are now comfortable with our employer base. Of course, like everything, some survive and some don’t.”
The electrical industry seems to have gained a renewed commitment to innovation and revitalization of the nation’s aging and overburdened electrical infrastructure. “The future is very bright for the electrical contracting industry,” Monahan said. “We feel really great about it. It’s a time of energy, youth and optimism. The market has steadily grown over the past seven years, and hours and membership has increased dramatically as a result.”
In the past, contractors had to abide by strict guidelines from a design engineer, but today they are receiving more training and getting involved in design/build projects to put themselves at the forefront.
Contractors now understand the need to diversify their skills to include not only basic wiring of homes or commercial office buildings but also energy management systems, home automation controls and even fiber optics. Without the technical knowledge of these solutions, contractors are learning they may be overlooked for a specific job. As a result, it is important to gain valuable training to stand apart from the competition.
“We are seeing more and more electrical contractors moving into low voltage, doing structured wiring, cable distribution and lighting control,” said Thomas Pickral Jr., business development manager for HAI. “Within the realm of the electrical contractor, we have seen a lot of growth.”
Years ago, the electrical work was relatively simple and just a small sector of the overall project. Competition was not as fierce, and the contractor would simply have to review the job and provide an estimate. Now, contractors are entering bidding wars and dealing with complex scopes under difficult time constraints.
“What had previously been specified by the interior decorator is now being recognized by the electrical contractor as a newfound opportunity with the builder and customers,” Pickral added. “More contractors are now able to expand and sell more in the low voltage markets, including lighting control. There is a lot of competition out there. Contractors are now leaving the company they work for and competing against their former employers.” Power quality is becoming an issue of concern for just about every electrical contractor today. Many power quality issues involve distribution system grounding integrity, voltage fluctuation, high frequency noise and voltage transients. As a result, power quality monitoring products have dramatically increased over the past 25 years.
“For the electrical contractor to be profitable and grow their business, they must expand their offering and customer base to recognize the opportunity to make more money by offering lighting control systems,” Pickral noted. “They are building on a foundation that they already know. They do not need a different way to install the fixtures.”
In addition, today’s residential consumer has an increased interest in home automation technologies with a primary focus on lighting controls, total home automation and even security systems. Contractors are also installing voice and data products, security systems, closed-circuit television, card access and satellite communications systems. They are also using fluorescent lamps, which are more compact, easier to install and aesthetically more pleasing to the customer. Metal halide lamp installations offer unique opportunities in commercial applications. These lamps offer reduced energy consumption and better lumens and life over traditional metal halide lamps.
“Dimmers and keypads are some expansion options as well as touch screens and complex interfaces such as temperature controls,” Pickral said. “We are seeing an extraordinary growth here, especially in whole home audio that had traditionally been sold by specialty low voltage installers. Now the systems are simple and do not require the technical wherewithal since it’s not a sophisticated rack of equipment being installed.”
Not only have opportunities increased for the electrical contractor but also advances in the manufacture of electrical fixtures in shaping the electrical contracting industry can now be seen to offer unlimited opportunities for added installations. Many markets are expanding their needs for electrical contractors, and they are now realizing these opportunities and capitalizing on them.
“One of the best ways for the electrical contractor to grow is to recognize their existing relationships and capitalize on them,” Pickral noted. “The trick is to have the devices that don’t require a ton of program, so it’s an easy and simple install.”
While faced with the issue of an aging industry, electrical contractors now understand the need to stand apart, and with a little bit of knowledge and some added training, they have been able to do just that. ECSPEED is a freelance writer based in Weymouth, Mass. She can be reached at 617.529.2676 or firstname.lastname@example.org.