June 4, 2021

Although we are seeing light at the end of the tunnel in regard to stemming the spread of COVID-19, the pandemic aftereffects are having a major impact on the residential remodeling and building industries. Global shipping issues, extended product lead times, raw material shortages, not enough labor for the amount of demand and price increases everywhere – these are the industry concerns we are facing right now, and there is no concrete end in sight.

And while trying to maintain their own businesses, design professionals also have to manage their clients’ expectations during these trying times. KBB recently met with its esteemed Editorial Advisory Board members on these important topics to get a better read on the challenges they are facing and some of the solutions they have implemented.

Product Distress: Extended Lead Times, Shortages & Price Hikes

All three of these pain points are occurring – sometimes concurrently – and this means making time to find product replacements. According to Christopher Grubb of Beverly Hills, Calif.-based Arch-Interiors Design Group, many lead times have gone from two to six weeks to more than 16 or more. He estimates his firm is putting in 30% more time on their projects to pre-shop multiple products that are in stock  or making substitutions for replacements of items that sell out.

Michael Menn, principal architect at Northbrook, Ill.-based Michael Menn Ltd., said his firm has inserted an escalation clause into its service contract for materials so he is covered when product prices and surcharges increase.

“We are ordering everything up front, and we are taking a larger deposit,” he added. “So when we order things like lumber, that is being paid for up front. We are keeping our clients informed throughout the process so we can protect both sides.”

For Bill Feinberg, president of Allied Kitchen & Bath in Wilton Manors, Fla., his firm has not been this busy in 37 years but has had to raise prices for services and project carefully.

“Prices in every industry have increased,” he said. “We just tell clients they need to be prepared. If they want work done in the next month, we are not the firm for them. Most people understand and are willing to wait on such a big investment.”

According to Nar Bustamante, president and principal designer at Sacramento, Calif.-based Nar Design Group, it is illegal in his state to take more money up front from clients – even as brands are taking advantage of the current situation to raise prices.

“I’m advising clients and letting them know the reality,” he added. “We can’t give out any promises, but we can still give our best.”

Navigating the Inflexible Contractor

During this harrowing time, some contractors have started changing their prices after the first bids, which results in homeowners needing to place deposits and sign contracts sooner. According to designer Julie Schuster of New York City-based Julie Schuster Design Studio, they are vetting clients, and there is little to no room for negotiation.

“Some construction companies do not want to work on smaller projects with multiple trades because of scheduling inflexibility,” said Rose Dostal, architect and designer at Hudson, Ohio-based RMD Designs LLC.

She works with some contractors who don’t want to work on kitchens right now because those involve too many different trades. Bathrooms are easier because they can do most of the work themselves.

“The tradespeople want to start a project with all of the necessary materials and leave after a few weeks,” said Dostal. “And they are jumping from one contractor to another, depending on who pays more.”

According to Lou Salge, vice president of Four Seasons Design & Remodeling in Angola, Ind., this is a difficult time to be a contractor. Things are often missing from orders, and some materials are taking longer to arrive – delaying the jobs even as skilled laborers are on site to work on them.

The Elephant Still in the Room: Skilled Labor Shortage

Five years ago, our Editorial Advisory Board said the same thing: Our industry needs to address the skilled labor shortage. If we don’t, in five to 10 years we won’t be in business because no one will be around to do the work. This is definitely an industry concern that has not been adequately overcome.

“The problem is that most parents don’t understand that these are lucrative jobs that do not require four years of education and that make good money,” said Feinberg, who believes the push should start in the schools and says his state is lobbying for Pell Grants.

Adam Gibson, CMKBD, CLIPP, CAPS and president of Indianapolis-based Adam Gibson Design, states that many parents are still pushing a four-year college degree as the dividing line between working-class and professional — and that earning a BA is superior to going into a trade.

“Until this perceived stereotype is lessened, we will continue to have a labor shortage,” he added.

Suggestions from the members to address this major industry concern included such things as designating specific degrees for the trades, design firms incorporating apprenticeship programs, promoting our industry to lower grades in schools and learning how to compete with the commercial sector.

The National Association of Home Builders is working on outreach programs, and the National Kitchen & Bath Association (NKBA) was getting into schools in a pilot program in Texas via its NextUp initiative before COVID hit. The NKBA website offers tools to search for jobs in our industry, learn about NKBA-affiliated schools and hear what it’s like to work in the industry.

The Hammer Heads program supported by the Central Ontario Building Trades started in 2009 to offer apprenticeship career opportunities to at-risk youth. Mike Hetherman, CKD and CEO of Willis, says the program is working successfully and that about 300 kids have passed through.

“We also have to keep in mind that this is hard work that wears people out, which is one of the biggest barriers to people entering the skilled labor force,” said Salge. “We need to be conscientious as an industry and have our workers involved in a hard project for a certain amount of time and then move them to something easier so they can recover.”

In that same vein, Ebony Stephenson of Designs by Ebony in Newport News, Va., and an NKBA chapter president, believes in taking care of your mental and physical health – and that of your employees, who are out in the field all day working hard.

Managing Client Expectations

I saved the most-discussed topic for last, although this could definitely have had a place at the top of the list. Some clients are confused about the higher prices and longer project and lead times, but unless they are living under a rock, they should have some understanding about what is going on.

Our Editorial Advisory Board believes in being completely up front with clients; transparency is key in softening the blow. If they are aware from the start, they will know they need to make decisions faster so you can put orders in earlier.

“Before the pandemic, most of our clients didn’t know the meaning of a backorder, and now they understand that this is a global crisis and that we are doing the best we can,” said Jack Bernstein, founder and CEO of Brooklyn, N.Y.-based Kurrent Kitchen and Bath.

When products are not available in time to complete a project, it also helps to give your clients other options, like Grubb does with his. He advises substituting with something in the same style, if possible, and to offer three selections based on which will arrive the soonest. If clients can be flexible with size and color – even better. Going with a different brand or mixing brands can also be helpful.

According to designers with Richmond, Va.-based Jennifer Stone Interiors, it is a good idea to explain to your clients that you making purchases for them rather than the other way around will allow them to take advantage of “in-stock” availability.

“We have a strict policy that if a client orders a product on their own and it comes in damaged, we are not held accountable,” said Brandy Souza, vice president of Kitchen Views in New Bedford, Mass. “We wait until everything is in and fully inspected before it is scheduled for installation. And with larger vendors, we have switched to a live order process, which bumps up the process three weeks faster.”

So where is the light at the end of the tunnel for overcoming these industry concerns? Some say it won’t come anytime soon, but some say things will get better as the world slowly gets back to normal. After all, that is why we are facing these challenges in the first place, so something eventually has to give as people start to emerge from their homes and put more money toward travel and entertainment versus renovations.

-By Chelsie Butler
Photo credit: Love the wind/Adobe Stock