In August 2017, the Floor Covering Leadership Council (FCLC) commissioned an independent research firm to conduct a multi-phase study to quantify the scope and severity of the lack of installation professionals on the flooring industry’s sustainability and growth. Chicago-based research firm, Blackstone Group, was contracted to conduct the research which focused on businesses that purchased workers’ services by engaging floor covering installers as direct employees and/or subcontractors in 2017. Over 300 responses were received covering subcontractors, installers, retailers and suppliers from forty five of the fifty states.
Executive summary highlights of the research findings include:
- Businesses that perform floor covering installation use diversification as a core business strategy to manage risk. Almost all of respondents had sold floor covering products in addition to installation services and earned revenue from more than one construction sector while two thirds used both direct employees and subcontractors to perform installation services.
- While diversification was widespread, respondents did rely more on subcontractors than on direct employees. One in four used subcontractors exclusively. The benefits of subcontracting to lower risk remain compelling enough that no greater shift to direct employees was being planned for in 2018.
- Respondents were somewhat likely to recommend floor covering installation as a career. Financial advantages drive career recommendations while tough working conditions are the primary barrier to making a recommendation.
- Perceptions that the industry was experiencing workforce shortages were widespread and were high relative to both the shortage of direct employees as well as subcontractors. Serious shortage perceptions were driven by labor market characteristics including higher perceptions in non-union versus union markets as well as revenue mix where perceptions were higher for those generating residential revenue versus non-residential.
- Despite perceptions of labor shortages, most of the respondents do not plan on raising wages for direct employees in 2018 even though costs of subcontracted services are expected to rise by an average of 3.9% in 2018.
- The research identified gaps in the workforce including the challenge of recruiting young floor covering installation workers and the fact that retailers had the lowest percentage of directly employed installation workers who received formal training compared to contractors and installation businesses.
- The shortage of installation workers is having a measurable financial impact on the industry. The combined cost of the labor shortages impacts on the businesses was 3.8% of their total 2017 floor covering product sales and/or installation revenues.
The study concluded that not only is the labor shortage real, but its financial impact up the flooring supply chain is significantly more than previously understood.
Additional details on the findings will be released in the coming months featuring in-depth highlights on the following categories of the research:
- Characteristics of the businesses that rely on floor covering installation workers
- Business’ use and perceptions of the installation workforce
- Installation as a Career including motivations, barriers and recruitment
- Gaps in the installation workforce including perceptions and market indicators
- Financial impacts of installer shortages
FCLC’s primary objectives of the research project included:
- Estimating the current size of the gaps between supply and demand of floor covering installers as well as the projection of these gaps in 5-10 years
- Quantifying the financial impact of the installer shortage up the supply chain
- Identifying the key drivers behind the installer shortage as well as potential solutions
Member associations of FCLC donated funds necessary to kick-off the initial phase of the research project. Ongoing industry fundraising will be coordinated to generate the funding needed for additional stages of the project.
The FCLC was established in 2015 as a coalition of flooring industry trade associations committed to identifying issue and developing solutions to the industry’s most pressing challenges. Currently, 12 flooring associations support the FCLC including: American Floorcovering Alliance, Inc. (AFA), International Certified Flooring Installers Associations Inc. (CFI), Ceramic Tile Distributors Association (CTDA), Floor Covering Installation Contractors Association (FCICA), Multilayer Flooring Association (MFA), Natural Stone Institute (NSI), North American Association of Floor Covering Distributors (NAFCD), North American Laminate Flooring Association (NALFA), National Institute of Certified Floorcoverings Inspectors (NICFI), National Tile Contractors Association (NTCA), Resilient Floor Covering Institute (RFCI), World Floor Covering Association (WFCA). For more information, visit www.fclcouncil.org.