It’s common knowledge that electrical contractors are under increasing pressure in today’s competitive business landscape—from labor shortages and an influx of new technology to the drive for greater efficiency and more. The electrical contracting industry is constantly challenged to do more with less and optimize its business processes so that it can continue to operate profitably and grow.
Several contractors discuss some of the most pressing business challenges they’re grappling with today and how they’re addressing them—or how they would like to resolve them in a perfect world.
The pace of technology
“From rotary phones to smartphones and so much more, my generation has seen the gamut when it comes to technology,” said Shane Snyder, executive vice president of Cannon & Wendt, a 75-year-old firm based in Phoenix. “Today’s influx of new technology—from Revit and BIM models to Trimble and more—and the speed at which it’s changing makes it extremely difficult for us to get our arms around it; it’s difficult to manage the technology side of the business while you’re doing work. We’re going to need to commit to personnel to manage this for us. We could do this by reassigning someone on our team away from their current job, but probably we’ll need to hire a dedicated research and development-type person in the future.”
“With all of the cool new technology that’s now available—e.g., drones, augmented reality glasses like the Microsoft HoloLens, etc.—we’re going to need people who are familiar with these solutions because we can’t turn electricians into techies overnight. These candidates will need to be tech-savvy but also have some business acumen to help us prioritize our investments in technology based on their ROIs—e.g., they’ll need to help us determine if something is just a flash in the pan or an interim solution versus something that’s ‘forever’ that we can build on.”
“One of the most tedious challenges we face today is the amount of redundant administrative processes,” said Tony Mann, president and CEO of E-J Electric Installation Co., a 120-year-old contracting firm based in New York.
“Years ago, this situation involved a large amount of paper documents that you needed to fill out for your company internally; you’d then have to transfer all of that same information to all of your clients’ forms and processes. Today, we still have the same problem—we’ve simply transferred these redundant tasks to a number of software solutions. You now need subscriptions to all of these programs that your clients require while managing your own solutions and processes. Information is becoming more and more fragmented with greater room for error.”
“I believe that a step in the right direction would be to have a software solution for your company where all of the data is in a single-source location. By creating the ability to replicate any customer or third-party forms in your systems based on what’s required, you can leverage your data so that it can be used for multiple applications and significantly cut down the time wasted on this tedious task,” Mann said.
“There’s a lack of standards on prefabrication and typical electrical building assemblies,” said Anton Mikec, chief operating officer at 35-year-old Lighthouse Electric, Canonsburg, Pa., which employs some 500 electricians. “A solution would be to develop some standards. BICSI—a global professional association based in Tampa, Fla., that supports the advancement of the information and communications technology community has done a great job on the data side, and the industry should follow their lead.”
Nonspecific safety apps
“I believe that there are too many ‘canned’ safety apps in the industry today,” said Jesse Mikec, director of safety at Lighthouse Electric. “We need a practical app that’s specific to the electrical industry and links to electrical safety and production.”
“In a business like ours that relies heavily on labor, expenses have to be paid weekly, and that reality can make cash flow challenging,” Anton Mikec said. “Owners and GCs need to understand that we operate within a labor-intense industry and should commit to cash neutral terms (‘pay when paid’) or better contracts.”
Bidding and drawing processes
“There are too many opportunities to bid in our industry today and limited estimating resources. I wish there was a practical and simple tool to help sort out these opportunities,” Anton Mikec said. “Current software involves drawing by system, but we don’t install by system—an example is an overhead rack or corridor conduit with multiple systems. I’d love to see a solution that combined drawings by area and system.”
Lack of team commitment
Jesse Mikec said, “Customers and owners want BIM and prefab from electrical contractors but are unwilling to personally commit to the process. To improve this, we need to start with a team approach and a commitment to planning and fabrication, with all trades buying into the process.”
Definition of craftsmanship
“Electricians define craftsmanship as custom,” Anton Mikec said. “I think that we need to redefine craftsmanship as ‘building great products with standard installation.’”
“In our industry, planning for general material typically happens the day before install,” Anton Mikec said. “I wish that everyone could think and order at least one week in advance and, ideally, 30 days in advance for greater efficiency and savings.”
Not enough data on new products
Despite the best marketing efforts of electrical product manufacturers, Jesse Mikec feels that old habits die hard among ECs.
“The industry has witnessed breakthroughs in innovative installation products and time-saving solutions, but many contractors and/or customers are afraid of them because they’re not what they’re used to seeing or are unwilling to change,” he said. “It would be great if the industry could make more quantified data available around some of these new products to prove that they can drive a safer and a faster installation to help accelerate their adoption.”
Create a marketing campaign
“Thanks to attractive tax incentives for businesses, and the fact that operating expenses are lower here than in other parts of the country, the data center, healthcare and housing markets are all currently booming in Arizona, but we don’t necessarily have the resources to capitalize on all of this positive construction activity,” Snyder said. “We don’t take on work if we don’t have a sustainable plan to complete it and, in times like these, it becomes very challenging to develop those sustainable plans. If handled incorrectly, there’s the potential for these situations to end up stunting growth and leaving us demotivated.”
Snyder believes that the problem began decades ago.
“It goes back to the generations before who all told kids to go to college, so now we have nobody to do the work,” he said. “Thanks to good marketing and some efforts to get out in front of young people, however, I’ve seen a recent increase in the number of younger folks getting into the electrical contracting business. But I still think we need to reach out with a public marketing campaign that shares what it means to be in the construction industry. A lot of younger people and their parents might not be aware of the fact that you get paid as an apprentice while you learn the ropes and then can come out making a starting salary of approximately $60,000 a year.”
Build an army of ‘bots’
“While raising three young boys, I’ve had the huge benefit of watching animated movies such as ‘Cars,’ ‘Toy Story,’ ‘Finding Nemo,’ ‘Up,’ and so on for a number of years. It seemed like that was all we would watch at home!” said Matt Englert, senior vice president of Rosendin, San Jose, Calif., a century-old contracting firm with 15 regional offices nationwide.
“As one of the top construction organizations in the nation, we’re involved in some of the most complex projects in the world. The projects we build are continually getting bigger, faster and much more complicated, and this is all occurring during a historic construction labor shortage where a tremendous amount of skill and knowledge will retire out of the workforce over the next five years,” he said. “It’s a big challenge, and this is where I draw from my library of animation for a solution. In ‘Big Hero 6,’ a computer-animated superhero film released by Disney in 2014, a young robotics prodigy, Hiro Hamada, can bring us the answer. In the film, Hiro creates microbots—swarms of tiny robots that can link together in any arrangement imaginable using a neurocranial transmitter. You just think what you want the microbots to do and they do it! Construction projects that would take months or years to complete with many workers could be done through the thought of one person! So yeah,” Englert said, “I would want to create an army of microbots to tackle the labor-shortage problem.”