Since the dawn of history, humans have been fighting over resources. Battles have been fought and wars waged over hunting grounds, fishing waters, farming land, oil, gas, and just about every mineral reserve on the planet. Today, even the most civilized societies still jockey for power and control over assets necessary for their best interests.

Businesses are no different. During the Industrial Era of the late 19^th century, tycoons such as Rockefeller, Carnegie, and Westinghouse went to great lengths to secure their interests in natural resources, land, infrastructure, and labor. The motives back then were centered on power and wealth. Today, I believe, a case could be made that it will quickly become a matter of survival. And for contractors there are two big resources that will become increasingly more valuable: labor and technology.

Labor

The restoration industry has been blessed with years where demand has exceeded the supply for services. Coming off a few years of heavy consolidation, the buyers in the market are going to start getting organized with brand alignment and operational efficiency. This is going to force contractors into an even more competitive landscape for labor and subcontractors. In the not-so-distant future, it won't be about how much market share you can gather, but rather how much capacity you have to perform the work.

There is certainly no lack of research and discussion about the shortage of skilled and unskilled labor in the marketplace. Demographic, economic, and social changes have all contributed to the struggles that contractors face in the lack of available labor to get work done. To survive and remain competitive in the future, contractors must be prepared for an all-out war on human capital.

In my opinion, winning this war will depend on two things: a company’s ability to recruit AND retain employees and subcontractors. For years, I have told clients they need to be prepared to one day spend just as much money in their human resources budgets as they do on their sales and marketing efforts. That day is not far off, if it isn’t already here.

On the recruiting side, companies making headway are those who are embracing social media and professional networks. They are throwing traditional job placement ads to the wind and using the power of LinkedIn, Facebook, Twitter, Instagram, and other applications to build their recruiting pipelines. While harnessing the power of videos to tell stories and provide positive reinforcement of a company’s culture, these campaigns must be deliberate, well-funded, and require the efforts and participation of all employees in the company to bring top talent to the table.

The same holds true for subcontractors. Gone are the days when subs would line up just to have a shot at a general contractor’s book of business. Trades understand the position they are in. They use their leverage, and they are conveniently selective when it comes to who they work for. With that said, contractors must engage in active recruiting strategies and constantly be on the hunt for partnerships that benefit both parties.

If there is a silver lining with subcontractors, it’s that they don’t require much for them to make your company a priority. In fact, over three decades of personally working with these folks has taught me that all they are looking for in a successful partnership is to get:

• Clear communication, instructions, plans, and specifications
• A clean job site that is ready for them to work
• Proper coordination with other trades
• Permits, materials, equipment, and utilities they aren’t expected to bring themselves
• Prompt payment

Just like every healthy relationship, there should be flexibility by all parties. This can go a long way toward creating loyalty and commitment from the folks you need to rely on the most. It also sets the stage for better retention and tenure with both subs and laborers.

Creating an employee and subtrade retention program may be a foreign concept, especially when we consider the daily demands on everyone’s schedules. Taking the time to intentionally cultivate lasting relationships takes effort, but it is necessary. The best way to accomplish this is through education and training. Most folks won’t remember trivial gifts or company luncheons, but the value of knowledge is never forgotten because it lets others know that you care enough about them to invest in them. The return on this investment is almost always worth it.

Technology

One of the most interesting things about the restoration industry is the lack of patented technology. Now I’m not referring to a company’s secret formula for deodorization or antimicrobial spray. I’m referring to methods of service delivery. Looking back in the history of American business, from Ford’s assembly line to McDonald’s kitchen layout, entire empires have been built on proprietary methods. So why is it that service contractors lack unique methods of doing business? It certainly isn’t for lack of innovation. Just attend a tradeshow and you will find plenty of that. It may not even be a lack of effort, especially if you remember the legal battle between Thermapure, Inc., Water Out, and the rest of the industry.

I would propose the issue is a lack of dedicated resources. I don’t think anyone would debate that restoration contractors are pretty resourceful folks, mechanically inclined, and creative. However, the average restorer is undercapitalized in both money and time. This is where private equity-backed organizations will have a distinct advantage in the marketplace. Their ability to dedicate resources to the development of proprietary operating systems could potentially change the landscape of the industry.

To be clear, I’m not referring to figuring out ways to dry buildings faster. The science and chemistry of restoration is pretty mature and any significant advances on that front might need to defy the laws of physics to have a major impact. This is unlikely to happen, at least any time soon.

The greatest opportunity for restorers to innovate will be in project administration and service delivery. We are already seeing wide-spread application of 3D imaging and remote estimating, along with real-time monitoring, communication, and inventory. To every restorer’s benefit, these technologies are being mass-marketed by independent manufacturers, distributors, and savvy franchisors. However, it’s only a matter of time before a contractor patents a piece of equipment, a process, or a method that is a game changer. The result will be a wide-spread metamorphosis of the way the industry conducts business. If you think this might be an understatement, just ask anyone on the planet under the age of 12 if they would rather shop at Amazon or Sears.

Conclusion

Preparing your business for the battleground of the future will not be easy. The most important decision for most will be determining if they will be on the offensive or defensive side of the war. Either way, restoration contractors must fortify their positions now by strengthening their brands, labor pools, and financial positions. This posturing will allow them to innovate more freely and capitalize on opportunities as they are presented. This point was articulated best by the Director of Space Technologies at the University of Arizona and Founder of Bloom Technologies, KR Sridhar, when he said, “When you don’t have resources, you become resourceful.”

While the restoration industry is not putting satellites into orbit or producing fuel cells to power them, it is populated with some of the most resourceful folks I’ve had the privilege of working with. If you are one of these folks, it’s time to double down on your skills and acquire the labor, trade partners, and technologies necessary for your business to grow in a new competitive landscape.