Coffee Conversations - The 2022 Trends Report! Sponsored by Beacon - PODCAST TRANSCRIPTION

Editor's note: The following is the transcript of an live interview with Tim Brown of Beacon, Sherri Miles of Miles Roofing, and Joe Hoffman of Hoffman Weber Construction. You can read the interview below, watch the webinar, or listen to the podcast here.

Heidi Ellsworth:

Hey. Hello everybody, and welcome to Coffee Conversations from RoofersCoffeeShop. My name is Heidi Ellsworth, and we are here again to be talking about what's happening in the industry. Here at RoofersCoffeeShop, we have been doing trends reports since 2016. And so we are going to be looking at the trends and the results for this year, for 2022. So before we get started, just a reminder, this is being recorded. We do have the chat open. We're very excited to have everybody in here chatting or asking questions, so please use that. If you have any problems, just let us know. But Q&A or chat, as we go along, we'll be reading those and bringing those about. And again, this is being recorded and it will be available within the next 24 hours on demand. So be sure to share it and let everyone see all this great data and information.

So to get started. First of all, I would like to say again, this is going to be on the 2022 Trends Report. We have a spectacular panel that I'll introduce here in just a minute, and it is sponsored by Beacon. So not just this Coffee Conversations, but the whole trends report has been sponsored by Beacon. I have to tell you, they care about the voice of the customer. They care about the contractors. They want to know what you think, what you need, greatest needs, greatest challenges. And because of that, Beacon has partnered with RoofersCoffeeShop to do this survey and put out this report.

So huge thank you to Beacon for all they do for the industry and for really caring what contractors need and what they have to say. So the Trends 2022 report. First of all, what we did is as we put together this trends report, I went out and I said, "Hmm, we need to get some contractors on here who can really talk to these numbers, share their experiences, and really kind of bring in some different views." So we invited three amazing contractors, and the first one I'd like to introduce is Tim Brown with RGS Exteriors out of Utah. Tim, welcome to the show.

Tim Brown:

Well, thanks for being here. Glad to be here.

Heidi Ellsworth:

Tim, please introduce yourself, and share a little bit about you and your company.

Tim Brown:

Well, that's great. So Tim Brown Jr, like she said. I'm actually a fourth of a five generation company, the fifth generation's my kids. I've got two kids in college, and then daughter and son in high school. So this summer all four of them work for us, so they're the fifth. So that's kind of fun. But out of Salt Lake City, and we do really everything on the outside except for roofing, ironically enough. That's the only thing we don't do, but we love to be involved in these types of things, and help out the industry as much as we can. But that's pretty much us.

Heidi Ellsworth:

That's great. Well, Tim, thank you. I know this is your first time on Coffee Conversations, so welcome. We're really excited.

Tim Brown:

No, thank you. Thank you. Thank you.

Heidi Ellsworth:

Thank you. And next I would like to introduce Sherri Miles. Sherri is returning. She's been on the Coffee Conversations before with Miles Roofing. Sherri, welcome to the show again.

Sherri Miles:

Hey, Heidi. Thank you so much. Yes. Also fourth gen here. Woohoo. And working on my fifth gen, Tim. I might have to pick your brain on-

Tim Brown:

Love it.

Sherri Miles:

How to get the kids more involved. We are a commercial, primarily roofing, contractor in Virginia, but we also have a residential division that does all exteriors. So a little bit of everything for us.

Heidi Ellsworth:

Great. So now we have Utah and Virginia. So as you can tell, we're kind of trying to hit different parts of the country. So Sherri, welcome and thank you again for being here. And then last but certainly not least is Joe Hoffman. Joe is with Hoffman Weber Construction, and also is the founder of a new technology that you're going to be hearing a lot about, Roofle, and he ... first time on the show, Joe. We are so happy to have you. Welcome, and please introduce yourself.

Joe Hoffman:

Yeah. Thank you so much for having me. I'm in Minneapolis, so right in the middle of these two. So I took over Hoffman Weber Construction. Second generation. My stepdad started that company. As you can see, we grew that through the recession, doing a lot of insurance work. Switched that over to a retail focus, and now my leadership team from Hoffman Weber Construction, we kind of launched a new initiative to really transform how roofs are priced and sold online. We're bringing e-commerce to contractors.

Heidi Ellsworth:

So great. I have to tell you, everyone should watch for this. We're going to have more special webinars, different things with Joe coming up in the new year about this new technology. It's very cool. And a lot of what we're going to be talking about today, you'll see there's a huge need. So let's get started. The 2022 Trends Report, I just want to give everybody a little bit of data so you kind of know where we're at. So it was ... ran February through August, and we promoted it through RoofersCoffeeShop, through our social media, through eNews, and we ended up with a total of 256 responses. So we were very excited about that. We felt like that was a good quantified ... and we worked with Beacon, and they're analysts, and the folks that they have there. Such great data. Special call out to Catalina who worked with us on this.

We also had our team, Lauren White and Natalie, who worked on bringing all the information together. So we want to give you a little bit of a look at the types of respondents we had at the survey. And some of this is kind of interesting when you look back in past years. So this year, our number one group of respondents came from California, followed by Florida, and then Texas. This is pretty normal. Florida, Texas and California are our top three states at RoofersCoffeeShop. Usually Texas tends to take the lead, but California, thank you all you California folks for getting your information in. And we also wanted to look at the size of the companies that were responding, which we also found very interesting from past years. But one to nine employees was at 32%, 10 to 49 at 39%, and then above 50, we really looked at, that's probably mostly your big exterior contractors, and also your big commercial contractors. So a nice balance between commercial and residential, and kind of across the board on sizes of companies.

And a really large leap this year from past years was the amount of owners who responded. So 56% of respondees were business owners. So thank you all for getting your information out here. This is what really makes it work. And everybody else, we need all sides of the equation. And then again, really interesting to kind of give you an idea of the types of contractors that were responding. The number one materials installed for the respondents was single ply followed by metal, which that is a huge increase from past years. And third was asphalt shingles. And then you can go down the way. So an extraordinary mix of commercial and residential installations. So with that, I just want to [inaudible 00:07:54] the ground points so that everybody kind of knows a little bit about the people who responded. So now we're going to get start this discussion with our panel, and we're going to talk about some of the areas of the trends report.

I will say that this is just a portion of the trends report. We took the highlights from each section. The full report is available on RoofersCoffeeShop, and I'll give you that ... well, Megan will have that link in the chat so that you can go in and download that when you're ready, so ... for the full report. Okay. So let's start out with distributors. So one of the things that we wanted to look at was how are contractors purchasing and communicating with their distributor? And really interesting, I found this interesting, that it's still 63% is by phone, and this is for purchases, 53% are in person, and 45% are sales reps in the field. And then at 37% it's distributor technology platform followed by other ones. And notice email is pretty far down there too. So I want to show the next slide here just because this is, in comparison, this is how they're interacting. But again, phone, in-person, sales rep, text. I'm going to start with Joe. What kind of stands out to you on how the communication and the purchasing with the distribution from the survey?

Joe Hoffman:

Well, when we were kind of preparing, still, I am pretty blown away that many people are still faxing in orders. That's a technology that I thought was long gone, but it looks like it's still happening. So looking at phone and in-person too, they strike me as pretty inefficient ways to call it in. But I suppose maybe those are going to stick around for a long time, because if you're on the road, and you're pulled over, and you just ... or you're at a job site, it might actually be more efficient than it seems to call in an order.

Heidi Ellsworth:

Yeah. Tim, what are you seeing? How are you working with your distribution?

Tim Brown:

I would say we're the distributor technology platform, but as we kind of talked yesterday, as we met beforehand to prepare for this, I was thinking about it. I think that the reason why phone and in-person's probably so high is I tend to think that a lot of that's on the suppliers as well, because a lot of these suppliers just aren't as tech savvy. Some of them are still a mom and pop shops. The smaller companies that just haven't bought into the technology, and so if they haven't, really the only way they can accept it is phone and in-person.

And the lovely fax, like Joe said ... I mean that still surprises me. I don't even think we own a fax machine anymore. But I think that as tech companies get more savvy and as suppliers get more savvy, I think the digital ... anything digital is going to be the way to go. I mean there's a way to track it, because how many times do you say, "Well I ordered that. What do you mean you don't have it?" "Well, I do. Right here it shows that we have it." And vice versa.

Heidi Ellsworth:

Yeah. It's the paperwork flow, which kind of goes back to that distributor technology platform that we're seeing, and the third party platforms that are going to have everything right already in the programs that we're using. So Sherri, how are you using that?

Sherri Miles:

Well, I think I'm probably in the majority here of how the respondents came in. We still talk on the phone and order through the phone even if we have a purchase order that we have in our system. Sometimes it's emailed, sometimes it maybe faxed. I don't think so. But I think this actually shows, to me, the importance of the relationships, and that relationships are still key when you're buying and when you're selling, both from the distribution side and from the contractor side. So to me, it's 72% of in-person or on phone, you're talking to a person. When we're talking about training our people and we're talking about propelling the roofing industry, we really need to focus on making sure we have those soft skills in place.

Heidi Ellsworth:

I think that's so true, because how frustrated do we get when we're trying to get ahold of somebody, and we're put on hold, and we can't get there, and it's ... but I think also on the other side of it, this is really showing the importance for technology and that we are going to ... so that we aren't making duplication errors, and that we are able to get things done faster. And also that younger generation who's coming in, they don't tend to pick up the phone as much. So it's going to be interesting to see how that starts to shift over the years. And I want to welcome everybody to let us know what you do. Are you calling? Paul just came in. He says phone, and in-person, and sales rep. So we want to know how you are working with your distribution and if you agree with these numbers. It sounds like we're pretty much on the same page, but it's going to be really interesting to see what happens over the next couple years.

Tim Brown:

Heidi, I wanted to add one thing that I thought was really interesting with what Sherri was saying, because I think we can't forget how important those relationships are, especially the last two years. I remember I was at a conference literally right weeks before Covid happened, and the speaker was talking about how, "Look, your suppliers are making a lot of money. Go beat them up against each other. Go price them against each other, and save yourself a couple points. Those couple points could mean everything." And I personally disagreed with it, but I didn't say anything. Well, lo and behold, those that have gotten materials in the last couple years are who? Those that are loyal, those that have the relationships, those that are ... so I think it's very important, even though we may go to a digital platform, to make sure that those relationships, because they are key, especially when we're in a time we are. If you have those relationships, you're still getting materials.

Heidi Ellsworth:

And the roofing industry's about relationships. Good ahead, Joe.

Joe Hoffman:

No, I was just going to reiterate that. I totally agree. Part of our mission at Hoffman Weber has always been to be a client of choice, not just the provider of choice, but the client of choice to the vendors. And our team is ... we've never, knock on wood, we've never had a late bill in our 20 year history, and I think that's a big part of why we were able to get materials when, frankly, a lot of people weren't, especially in Minneapolis [inaudible 00:14:43] here at the hailstones.

Heidi Ellsworth:

And so much going on across the board that way. And I do want to point out too. John Kenny just chatted in here, that I think is great, that he doesn't find these numbers surprising at all. But one of the things that it does cause is at times that there's a lot of contractors who have job cost tracking problems. They're not always issuing a proper PO trail communicating through the phone and in-person. So it's something to think about. I think the nugget from that is great relationships, and use the technology. Kind of a combination of both to make sure that you're doing the best for your thing. Also, we had Eric just come in for the panel. Would you say the relationship is more important than the product offering? That's a great question.

Sherri Miles:

Well, I'll say when we have supply shortages like the past two years, yes. Because products can change. We can work on an architect to change the spec. Because of that relationship we have with our suppliers, they tell us what's going on, they tell us what's available, they tell us when we can get things in a timely manner so that our end user customer is satisfied. So I mean it has really shown, to me, at least with the supply shortage issues, that relationships are king.

Heidi Ellsworth:

Yeah.

Sherri Miles:

Queen.

Heidi Ellsworth:

Queen. All of the above. All the point. Okay, great. And we're going to kind of move into that here on ... in fact, that was our next slide. So Eric, thank you. That was a great question. So we also asked within that, what have been the most difficult materials to obtain over the last year? And single ply, number one, fasteners, nails and screws, ISO, then shingles, accessories. I don't see a whole lot here that surprises me. But Sherri, let's start with you. Any surprises here?

Sherri Miles:

No, not at all. And in fact it comes in waves. So right now we need fasteners. A few months ago we needed ISO. So it's just really depends on when this survey was taken, what was really hot at that point, I think.

Heidi Ellsworth:

Yeah. I think Tim said this yesterday that if we took this survey again right now for the next three months, it could totally look, not maybe totally different, but it definitely would look a little bit different. Tim, are you seeing this in Utah? Kind of seeing the same shortages, and I know yours is mostly residential.

Tim Brown:

Yeah. I mean, absolutely. The thing that is interesting, it wouldn't really affect this group, but the thing that this year has been the hardest has [inaudible 00:17:28] anything cement based. So for us, like stucco, but there's such a huge cement shortage that homes couldn't even be built because of the cement. But again, I think we're over that now, and now it's something else. I think fasteners, like you say, is the thing right now that's the hardest thing for everybody.

Heidi Ellsworth:

It's [inaudible 00:17:44]. And I thought it was really interesting. We actually had two different things. [inaudible 00:17:48] we had shingles and then we had colored shingles that actually got pulled out different when as contractors were answering this. So Joe, have you seen that with the colors? I've heard that a lot.

Joe Hoffman:

Yeah. There was massive restrictions on colors this year. There was a time period where people could choose black or black. If they got lucky, weathered wood. It got pretty rough. But still our team ... it's all perspective, right? Our team's just been grateful that we're not doing low slope roofing. I do not know how the low slope roofers did it through the last two years with the ISO and fasteners. You said it perfectly, Sherri. And I don't know personally, but I've heard exactly what you said, which is it has just been a nightmare.

Sherri Miles:

Well, yeah. And right now, single ply. We ordered a job, I don't know, about six months ago, and got a tentative delivery of next end of April.

Heidi Ellsworth:

Oh, geez.

Sherri Miles:

[inaudible 00:18:49] a year. And that's again where those relationships come in so that you can tell ... be upfront with your customers and tell them, "I can't get this. I still can't get this." It's tough. It's tough.

Joe Hoffman:

It's not what they want to hear, but it's better for them to hear it than find it [inaudible 00:19:08].

Sherri Miles:

Exactly. Exactly, Joe.

Heidi Ellsworth:

And that leads ... you guys are just awesome. You're just leading right into everything perfectly. So that leads to communications. So we wanted to know where do contractors get their information. And these top four, I just was like, wow, this is so indicative. So roofing websites, so thank you all for coming down to RoofersCoffeeShop by the way, manufacturer reps, distributors and suppliers, and roofing associations all within two points of each other. And then social media, magazines, web searches, other contractors, employees and coworkers. So I found this really interesting. What are you seeing, Joe, on really where your team is going to get information, and where they're finding it? And we talked about just a little bit earlier where homeowners and building owners are going to get their information.

Joe Hoffman:

So the same thing. I think we line up really well with this. We do a lot of conferences as well through a lot of it. But a fairly good segue, I'll take the opportunity to plug Roofle right now, hoping that homeowners get a lot of information directly from contractors, directly from contractors websites through our Roof Quote PRO widget being installed. So this is exactly what we're looking to shake up is kind of democratizing access to information.

Heidi Ellsworth:

Getting the information out there. And you know what I think is really interesting too is this goes exactly back to what we were talking about on the distributor on relationships. The top three is a combination of technology and relationships. Manufacturers reps, every year for the four years that we've done this, has always been very high to the top. They are such an important part of the community that sometimes they are aren't always talked about. So Sherri, your manufacturers reps and distributors, I mean this really is that combination.

Sherri Miles:

Absolutely. And that's a lot where we get our information from. We're very similar to this. Again, that relationship, and the importance of solid information. I don't want a sales pitch information, I want actual information. Be honest with me, let me know what's going on, because that gives an opportunity for a different solution. Right? So I would agree with these numbers, and we fit in right there where we get our information.

Heidi Ellsworth:

And Tim, anything here that kind of surprises you?

Tim Brown:

Nope. These guys have said it right on.

Heidi Ellsworth:

Yeah. It's-

Sherri Miles:

I will say one other point back to that, Heidi, for just a second. I think the timeliness of it. You can see roofing websites with you all like information is key, and it's very timely. We need to know if it changes quickly that we get that information sooner. So if you wait for a magazine that's not going to give you the most up to date of what's happening.

Heidi Ellsworth:

It's true. It's true.

Tim Brown:

And I think just like we talked yesterday. Literally these surveys right now can change daily. I mean think if we're being honest, I think this conversation we'll get to slides later about labor, but I think that how to get leads is going to be a bigger factor than all these right now, two months from now. So going back to the point that the website's still key, because it can be real time up to date. And right now this market is changing so rapidly, we just have one problem to another to another to another. And frankly, let's be honest, those that are on this podcast care, or whatever we're calling this, they care. That's why they're listening. And they are the ones that are going to be able to adapt, because they're learning. They want to find out what's going on so they can adapt and change. Those that aren't are going to be in trouble, and they're the ones that are going to be left behind.

Heidi Ellsworth:

I agree. I agree. And knowing what the distributions out there, how to do it, I think, is so important. And Tim, I want to go back to you too, because we had a great conversation about this yesterday talking about changing how people are looking. But you were a little surprised by some of these numbers on what social media people are using.

Tim Brown:

So what I was surprised about frankly was LinkedIn in a really positive way. My personal opinion is LinkedIn is a little bit more savvy contractor. Someone that's a little bit more, like we just talked about, up to date, on top of things more, and so that that many people are on LinkedIn is awesome to me. I think that's a really good sign and a trend. Look, all the other ones are all fun. They're all just something to pass our time, and to check things out, to check out what Johnny's doing, and Billy's doing, and those kinds of things, but LinkedIn is all business, and so I think that's awesome that it was that high.

Heidi Ellsworth:

Yeah. I also was very encouraged by even some of the, what I would say would be younger generation, the Instagram, the TikTok, YouTube. Some of those numbers are really growing and showing that we have this next generation. So Sherri, I see you nodding. I thought that was interesting.

Sherri Miles:

Yeah. Well, when we think about our digital marketing, we have to think about all of this. Right? About every platform, and what audience is there. When we recruit, Facebook seems to tend to be the place to put those messages there. But information, back to Tim's point, of just what's happening, LinkedIn is certainly the place where we go. But yes, we've had my fifth gen do some TikTok videos for us just so that we can relate, to be top of mind to kids coming up as a place possibly to work. But I think correlating the LinkedIn number back to your pie chart at the beginning of how many owners were answering this survey, I think that lends itself to more LinkedIn usage as an owner of a [inaudible 00:25:15].

Heidi Ellsworth:

I think so too, and I've seen it grow so, so much. But I do love the fact that, Joe, you just chatted you're TikTok.

Joe Hoffman:

Yeah.

Heidi Ellsworth:

I love it.

Joe Hoffman:

Yeah, I'm a TikTok to fan. The Chinese can have my information. They're worth it. It's a great app. I don't care.

Heidi Ellsworth:

And I think, going back to your point Sherri, on that we're using social media for so many different things. It's to gather information, it's to recruit, it's retention in some ways, it's obviously getting leads, talking to your customers. So when you look at this, this isn't just getting information, this is how people are using all of these across the board.

Tim Brown:

I was just going to say, just go really quick. This is why I love being on panels like this is because you learn just as much. Right? I'm just sitting there thinking I've never done this. I've got a daughter that has had several TikTok videos go extremely viral, she's an influencer on Instagram, and I've had her do absolutely nothing for the company. I'm like, why?

Sherri Miles:

It's time, Tim. It's time?

Tim Brown:

So you guys just talked about using the ... I'm like, "Dude, that's teenagers. Who cares?" Well, no. I [inaudible 00:26:24] to recruit, and to use these things for other things. So my daughter doesn't know, but she just got a job.

Heidi Ellsworth:

There you go.

Tim Brown:

Honestly, guys, I appreciate that. I never thought about that until just now.

Heidi Ellsworth:

Yes. Have your daughter talk to Megan Ellsworth, our producer in the back space here, because she does all of our TikTok's so ... and-

Tim Brown:

Great. I love it. Done.

Heidi Ellsworth:

They tell me just to stay out of the way. We got this. We'll put it out there. Okay, this one, we have seen a substantial increase from the past years of people who said yes to belonging to a trade association membership. And I just realized, I was actually going to put a word cloud in here that showed all of the different associations, and I didn't do that, but that's more reason for everyone to download the report, and you can see that. But it was great. We showed all of the different associations that they're involved in, but really seeing this number grow says so much to me about just the growing professionalism. And also going back, Sherri, to your point of how many business owners we had taking on as respondents. But what does this ... Sherri, you're so involved with all the associations. What does this say to you?

Sherri Miles:

Well, it could be two things. It could be now you're talking to, or the people that are responding are from a smaller pool that are already in trade associations. That could be one of the answers. But I think there's power in trade associations, and affiliate organizations, because you have a common purpose, and you have a common goal. We've gotten so good at doing best practices for each of our businesses by listening to our peers, kind of like what we did just today. Right, Tim?

Tim Brown:

Right.

Sherri Miles:

So being a part of an affiliate organization is such a game changer when it comes to your personal business and your person. I've grown tremendously as a leader because of the trade organizations I've been in, and helping that leadership development piece.

Heidi Ellsworth:

You, right now, are at the legal conference for NRCA, right?

Sherri Miles:

I am, yes. In Austin, Texas.

Heidi Ellsworth:

And I didn't say thank you. I meant to thank both you and Joe, because I know you're both at conferences, and still calling in for the panel. So awesome. So Joe, which conference are you at, and what is the importance of getting involved, whether it's associations or these important groups?

Joe Hoffman:

So I'm at the Exterior Contractors Alliance, the ECA, right now. And it's exactly what Sherri is talking about. It's growing as a leader, growing professionally, making great connections. And I think you're seeing this increase and it's ... what I've seen is a really growing or increasing sophistication in our industry, even out of a lot of the newer companies. I meet some of these newer business owners in these trade associations, at the conferences, and they've only been in business three or four years. And you start looking at the things that they're doing, and the technologies they're embracing, and the marketing that they're taking ... they're just really innovative marketing practices, and tracking metrics, and everything else, going, "Man, when I was just three years into this business, I was not at your level."

And you see it more and more and more. I feel like it's a broader spectrum of the home services industry, specifically exteriors where I'm a part of, but ... and so I'm really not too surprised to see that this is growing. And it might be part of, with that sophistication, opening up and being more willing to share like Sherri was talking about, and realizing a rising tide raises all ships instead of trying to stay protective of our own little secrets. Being [inaudible 00:30:27] to share secrets and knowing that if you share your secrets, they'll share theirs, and everybody will do better.

Heidi Ellsworth:

Roofing respect. There you go. I love it. Tim, I know you're involved in a number of groups and associations. Same thing.

Tim Brown:

Yeah. I could talk for hours about this. To me, this is the most important thing, hands down, that I've done for my company. Going to events, being part of masterminds. It's a whole new level. If you want to be a company, you've got to do this. And top 500 was last week. Patrick O'Tool does an amazing job. You've got guys that are on stage, like Powers, who's going to do a billion a year. And then you've got people like Amy Bender who started out as a million a year and doing, what, 10 this year, or whatever it is. I love it, because you have every gamut of it. But organizations like that, CCN, Accelerate, Grasso, Yoho, you name it, these events and associations are key. Key, key, key to the business. There is nothing ... if I had to pinpoint what is the one thing that I've done that's helped, hands down, it's join organizations and be involved in them.

Heidi Ellsworth:

I love it. I love it. Well, obviously everyone's agreeing too. They're all seeing that light. So let's go into our top business issues. And so we asked our respondents what were their top issues? And so the first one, labor. And we all know that. And 61% of recruitment and retention, and then followed with training employees, and hiring. So very similar, but this was free form, so we were really able to hear what people were saying. You'll see that fully in the full report. But Sherri, let's start out with you. I mean you are doing so much with Skills USA, with your local vocational schools. Recruitment and retention is the number one struggle, isn't it?

Sherri Miles:

It is. And kind of going back ... touching back to the trade organizations, and really making ourselves professional, and inspiring each other as business leaders, we're also making roofing aspirational by going into the school system and saying what a great career it could be. Getting kids in elementary and middle school. We were just at a function this week. We reached over 3000 middle schoolers. They came by our booth, they hammered some nails, they bent some metal. It was the most popular booth, very proudly to say, in the entire walkthrough. They had architectural firms, and energy firms, and all sorts of different career paths. But roofing, we made it super fun and super cool. And the parents that come and see that and like, "Okay, this could be an option for my kid." It's really trying to make roofing aspirational and not something you just do, because you can't do anything else or don't want to do anything else.

So I think it's going to take some time, and we do it little bit by bit, but I think the recruitment ... I think all of these are one, really. Right? It's all training and uplifting the people that work for us currently, to speak about ourselves better, to make sure that the next gen that's coming in want to do and look up to the people, the professionals, that are doing it today. Like Tim, I can talk about this a lot, and I get all fired up about it, because it really is making sure people live into a purpose-filled life, and that they're going to want to come into our industry.

Heidi Ellsworth:

I love it. And we're getting a lot of ... just so everybody knows too, we are getting a lot of chats in here, and some of them I didn't quite capture, but I do want to point out, and so I'm going to go, because this kind of goes to what you're just talking about Sherri. But one of the things George Daisy brought about was YouTube, and how important YouTube is. And that's where a lot of these young kids are going to how-tos. So how to roof, how to bend metal, all of those kind of things are out there. And a lot of ... thank you everyone for printing your associations in. Just is so cool. But John Kenny just had a question here that goes with this, and I'm going to direct this starting with you Joe. What are the personal company or what are company struggles of the panel when it comes to retention currently or what they overcome if retention is not an issue? So I know you have some interesting things you're doing within your company for retention, so maybe you can share that.

Joe Hoffman:

Yeah, we ... very blessed. Retention has not been an issue for us at all. And I think what Sherri said was really powerful that hiring and training leads to retention. So they're looking at the problem, not the ... looking at the symptoms, not the disease. If you focus in on hiring, if you hire better and train better, retention just happens. And then if you have a really powerful team, recruitment isn't really an issue either, right, because it's just good high energy, everybody's feeling good, and people want to be a part of it. They stop in for the interview, everybody's happy, nobody's running around mad, and swearing, and looking like they're going to punch you. It's a good healthy environment, and supportive, and people want to stick around.

One thing that we do a lot of is really just personal empowerment and freedom for our people, which can be really difficult. It's funny, actually, this morning's opening session at the conference I'm at was talking about this exact thing, and we've kind of been conditioned in our society, from the industrial age on, into this hierarchy. And getting away from that mindset. Not thinking just flat, but thinking more in a, we like to call it a circle, that the three companies are structured like a circle where it's not ... and there's nobody at the top of the pyramid, everyody's job is the most important at times.

And if you're at the top, it's your job to move that circle forward, and let somebody else's job be the top, most important, and then it's their job to move it forward a little bit more. And part of that is letting go of control. It was very difficult for me. It's very difficult for a lot of the leaders in my company. It's not an easy thing to do, but just letting go, and letting people do the task the way that they think it's going to be best. And if you've hired right and you've trained them right, chances are pretty good they're going to make the right decision most of the time, right? 80% of the time they're going to make the right decision.

Heidi Ellsworth:

I want to actually move forward a little bit, because Tim brought up some great points, and I want to show that slide, so I'm going to ... it goes exactly with what you're saying, Joe. I'm going to move this forward, but as we talked about before, material availability, material costs, all a concern. [inaudible 00:37:34] since we kind of talked about that, I'm going to just scoop up here. So Tim, when we're talking about the labor shortage, and retention recruitment, taking care of it, one of the things is we had 21% said not experiencing a shortage. And you've seen kind of both sides of this. So maybe you can talk about that experience.

Tim Brown:

Yeah. Six months ago I was in the ... I absolutely needed field workers. That was a major problem. Right now, all I'm short is one salesperson. So that's it. But we're not really experiencing a true shortage. And I think our experience is is there's been a shift. We're a high new construction market, meaning a lot of the field workers work on new construction, not commercial, but just new construction homes. Well, the production homes builders are projecting to do half in 2023 what they did in 2022. That's their budgets, that's what they're guessing. So where do all those guys have to go to work? They have to find places. So fortunately for us, they've come to places like us that know that we still have work, that focus on remodels, and that are on the re-roof and re-installs, and so we haven't had that labor shortage currently. Six months ago we had it big time. And so that goes back to the conversation we're having. I have a feeling that a lot of these questions, six months from now, could change dramatically. Our market's just changing so quickly.

Heidi Ellsworth:

And it really ... it continues to. Now Sherri, you are still seeing you ... and those third graders, unfortunately, are a long ways away, but you're getting in front of ... or I should say middle school, but what are you seeing with your labor shortage in Virginia?

Sherri Miles:

I mean, all the time, when I come back from doing those events, the first thing my production guys are saying, "Well where are the people? Who did you hire while you were there?" "Well, they're in fifth grade," but we do need people, and we need them now. We'll need them in six months when our materials show up for certain jobs. So we've actually ... yes, we do have a labor shortage. It's been an opportunity for us to cross train. If we're waiting for single ply, we'll move those guys into the windows and doors temporarily. Not their favorite thing to do, not their wheelhouse, but we kind of have to ebb and flow as different products are available. But yes, I could use 20 more people tomorrow, and my production guys would still not be happy. They'd still want more.

Heidi Ellsworth:

And as we're kind of coming back on those recruiting methods, which we talked about before, this is really interesting when you're looking at employee referrals, advertising, online boards. Joe, what are you ... I liked what you said earlier. Make sure you're doing good hires. How's that working for you with trying to recruit?

Joe Hoffman:

It's been phenomenal. And we use all the above, but I would say employee referrals is probably where we get most of our people too. And we made a pretty rapid, big shift four years ago in 2018, and we hire strictly on culture and values. And I know that it's kind of cliche, it gets beat up, but we really stay true to it. As long as the person has the cognitive ability to do the task, and they're a culture value fit, we'll train the rest of them. I mean, let's face it, nothing that we're doing is overly complicated here. We're not trying to colonize Mars or build a self-driving car. So we found that if we hire strictly on values, if there's a value match between the person and our company, we will be able to train the rest of it. We'll be able to teach them anything else that they need to know.

And it's just a matter of time. And from that perspective, what we have done too, in that same time period, is started looking way further ahead on when we're going to need somebody. If we want to fill a position, we're trying to hire up to six months before we actually need that position filled, and just give that person a really long, slow onboarding, not just drop them in the deep end anymore. Try to limit their drinking from a fire hose feeling, and just give them a long, slow onboarding process where they can really immerse themselves in the company, and the culture, and learn what they need to learn well in advance of actually having to perform the task. And it's worked out well. It's very well for us.

Heidi Ellsworth:

So good. So Tim, what are you using ... I mean, as you're moving some of your labor from production, I think that's really interesting that they don't have jobs at new construction, so they're moving over. And it's interesting, because when you look at the next slide on retention methods, enough work.

Tim Brown:

That is absolutely hands down, the number one. Unfortunately. I would love to say it was they love the culture, they love all these things. Look, they want work. The production mindset anyway. Right? Now our office, ourselves, is a different conversation, but if we're talking about field employees, enough work and knowing that they get paid every week is number one. I think that is hands down. One thing I was going to mention too. We have not done this, so I don't have experience with this, but I have a really good friend in our industry that has had a lot of success with this. And he paid a very large sign-on bonus and a referral fee, and I'm talking like $5,000 to each. To those that referred, and those that signed on. But here was the catch.

It was like the first 30 days they got nothing, and then after ... the first 90 days, I don't think they got anything. Then after 90 days, they got like, I'm going to make up numbers, but say it was $2,500. But then after that it was $500 each month for the next to up to six months. He broke it up into six months. And what they found was is after six months, people weren't going to leave. At that point in time, they've realized what kind a company they are. And so if you think about it like $10,000 for employees is a lot of money, but if you could get a really high level producer, and somebody that was good, every one of us would pay $10,000 for that. Not even a question. And so that's something that he's done, and had a lot of success with it.

Heidi Ellsworth:

I like that fact too with the referral with the person who refers it, they also are getting that money over the time. So that gives them a vested interest to help onboard, train, to make this person want to stay with the company.

Tim Brown:

That's exactly it, because they know if they stay, they're getting $500 a ... I mean, look, $500 a month for six months or whatever it is, I guess that's only three grand, so however it worked out, but that's powerful. It was a really good concept.

Heidi Ellsworth:

That is really cool. And one of the big ... Go ahead.

Joe Hoffman:

Oh, no, sorry. It's a car payment. It covers a car payment for six months. [inaudible 00:44:37]

Tim Brown:

That's right. That's right. Especially for ... I mean, for a field worker, that's a huge deal.

Heidi Ellsworth:

Well, and when you look here, retention methods, training, training in other languages, and we're going to have a slide here pretty soon about the languages that we're seeing for training. Again, safe work environment. All these things are very important and what we want to be offering to the companies. You all said it earlier that if you aren't keeping up with this, you're going to be left behind. So making sure your culture is fitting these kinds of things is really, is going to be key for retention and for that labor shortage.

Let's go in real quick to that languages that we just talked about. So we were really interested, from RoofersCoffeeShop side, of what the languages that are out there, and what are they training in. And as you can see here, 89% responded that was English while 51% selected Spanish. To me, I was like, that was ... to me, that's great numbers, that we're actually thinking now that we need to be training in dual languages, bilingual, that we need to have our Spanish training to make sense for that safety, for the quality of performance, and of installation. Let's just start, Sherri, what are you seeing with this on training in multiple languages?

Sherri Miles:

Oh, yeah, we've been doing that for years though. Probably 70% of our field labor force is from the same town in Mexico, and they've worked, and brought their families here for the past 30 to 40 years, but still Spanish. And that, we hired to that as well. So we just brought on board almost a year ago, a new payroll person, and she's bilingual. She's Puerto Rican. But the guys, we're finding that their questions are being answered more quickly, they're turning their time sheets in, they're getting stuff done in a more efficient way, because they're able to talk and ask questions where they hadn't been before. So I think it's super important. Yes, safety is top in training, and making sure that there's no misunderstanding in what needs to happen if we say in English [inaudible 00:46:54].

Heidi Ellsworth:

Right.

Sherri Miles:

Yeah. We've got to teach in both.

Heidi Ellsworth:

As we go through these. And I'm going to start going through ... we're going move to some of these next slides, because I just want to make sure we get all the information out there, and the time always just slips away. But greatest training needs. New hire training, technology on the roof, new products and installation, this is ... we keep hearing this over and over. So Tim, what are you seeing on your greatest training needs?

Tim Brown:

I love what Joe said. The problem is we don't train, right, because we're so buried, we just throw them to work, and we don't train them like we need to. So I think one thing that's not on here, that hindsight maybe should be on here, is what is our greatest training needs? Time to do it right. I mean, it's something I hadn't thought about until today, but so many times we do that. Because when do we hire? When we needed a position yesterday. We're not thinking forward three months ahead, so ... I don't know. I've just changed my mind just on this panel right now.

Heidi Ellsworth:

I love it. Well, and a lot of this, with that technology on the roof being the second highest, you can see what are the greatest technology needs. And I just had John Kenny earlier this morning say estimating project management, that's a big deal. But this is still, I mean, as we're bringing people in, these are things that are needed out there on the technology. Joe, you are on the leading edge of technology. What is these results say to you?

Joe Hoffman:

That again, our industry's getting more sophisticated and they're starting to look forward. They're starting to acknowledge the changes that are coming down the pike, that are going to happen whether we like it or not.

Heidi Ellsworth:

When I look at this, I think robotics. I think if we look in the next, to Tim's earlier point, if we look in the next couple years, maybe even the next six months, how much is, and Sherri, we talked about this a little bit yesterday too, how much is robotics going to change? Because we need to fill that labor gap, and so robotics is going to only become more and more. The buying process, Joe, with what you're doing with Roofle, we're just seeing so much. And Sherri, you're nodding your head. What do you see there?

Sherri Miles:

I think, again, with great pain comes great opportunity for change. And so that's where I see the possibilities happening in robotics are up on the roof. And if we can't find the labor, we can design something that it's going to make it easier, faster, simpler, or actually do the work. And we use drones so much more the past five years, and we never used them 10 years ago, for both estimating and project management. We can estimate a roof. We don't have to send a team of people out or one person out. We can watch what's happening project management wise, take pictures every day of the progress. So technology has changed, and is going to be an important part of production coming up.

Heidi Ellsworth:

I want to say just on RoofersCoffeeShop, we have Imagine Technologies who's doing so much with drones, and Drone U, which is training on drones. We have CRMs on there, we have estimating and project management. As I mentioned, John Kenny's on here. I continue, I mean, from even the days of EagleView, continue to see the technology just explode on where we're going. But along with that is also the technology that's changing with marketing. And so number one, digital advertising, websites, content marketing plans. And Tim, you had just some great thoughts on this, and you do a lot of marketing. What are you seeing?

Tim Brown:

I think it's a little of everything. I mean, honestly, and I'm looking at this, we do one of those things. Obviously, online is number one, but we can't forget about the old traditional stuff. Mailers, TV, radio, it's a good balance. And then the other thing that ... what we were talking about yesterday was you're almost going to have A, B and C type marketing. A are people that are very interested, that have sought you out online, that are looking for it. B is going to be maybe somebody that was canvased, somebody that you knocked on their door, and asked for a lead. And then the last one is going to be maybe these lead generation companies. Angi, well not Angies but home ... Help me out guys, what am I ... I'm brain farting here.

Joe Hoffman:

Angies. You got it right?

Tim Brown:

[inaudible 00:51:35] HomeAdvisor. That's what I was looking for. But now Angi, now. But these lead aggregates that are maybe a different category, and it's like, "Well when do I want to put money on which area?" And the answer is yes to all. It's just a balance of everything. You need all those types of leads, and you need to fill those buckets at different times. So we've got to make sure that we're continually marketing. And the last thing I would mention is, as the last little bit, we haven't needed leads, because everybody's been so busy. But I think [inaudible 00:52:11] we got to remember when it's like that we still need to advertise, we still need to put money out there, and not forget, because you got to have your name out there, because when you need it, and then you want to shut it on, it doesn't always work. So you got to keep it going all the time. Anyway, that's my thoughts.

Joe Hoffman:

Even more so when times are tough, that's when you want to double down on your marketing, and maybe as a business except a little lower net profit or dip into GP or whatever you need to. But cut anything but marketing. Right?

Tim Brown:

That's right.

Joe Hoffman:

[inaudible 00:52:42] That's when you want to lean in hardest.

Sherri Miles:

That's what I argue all the time because I'm in charge of marketing, so I'm always ... I'm pushing for more money, especially when there's not a ... we're looking at the budgets. I like, "You can't stop marketing. The competition will, but we can't. We can't."

Heidi Ellsworth:

Right.

Tim Brown:

If you want to maintain that market share, you've always got to market no matter what. Whether things are good, bad, it doesn't matter, you've got to continue to be in front of the customer.

Joe Hoffman:

Yeah. And we found when times are tough, marketing gets cheaper, so it's actually easier. You almost don't have to spend more money. You can almost increase your reach by just maintaining your budget.

Heidi Ellsworth:

And one of the things too that I see and that I didn't see as much in here, but I think it's probably kind of encompassed a little bit in that digital advertising is all the new ways of getting to customers. So whether that's with a product like Roofle where you're actually bringing the homeowners in to get research to understand, and to start generating ... basically getting them into a funnel of information or if it's LinkedIn. Sherri, I see you do so much on LinkedIn out to the commercial space. I think all of those are new ways that are not, especially when you talk about social media, not as expensive as everyone ... as it may have been, but it takes time, and it takes talent to make it work.

Sherri Miles:

It does take a lot of time. Exactly. And there's so many places. To your point, Heidi, there's so many places where you could be. Where is the most effective with that time, if time is a commodity, where it could be less expensive? As Joe says, true, but it still takes your time. And so where are you going to hit the business owners that you want to get in front of? Where are you going to hit the people that you want to hire? So you have to think about where you spend your time and energy, even if the platforms are less expensive. But I mean you could just send a buckshot out there, and hope for the best, but I really think you need to use data. We use a lot of data analytics. We look at our most profitable jobs, and we find out a lot about those people so that we can continue to market to them in ways that they're going to see us.

Heidi Ellsworth:

Yes, that's it. Exactly. And Holly, thank you Holly, she threw some stats out here for us in the chat. Marketing budgets increased to 9.5% of total company revenue in 2022 according to a Gartner report, up from 6.4% in 2021. So it sounds like everyone's agreeing with what you all are saying.

Tim Brown:

Unfortunately, it's going to be higher this year, because marketing costs has gone up so flipping much.

Heidi Ellsworth:

And with the economy and everything, we don't know what's going to happen and going into winter, so it's going to be interesting. So I'm hoping that some of these numbers and this conversation will help all of you as you're looking at things. Like to Tim's point, one nugget, one nugget, put your daughter to work on social media. There you go. I think it's so good. So I want to thank the panel so much. We have one more comment here too from Ray. Thank you, Ray, for being on. I think a great retention tool is company culture, especially in the roofing industry. If your company culture is not inclusive, and a segment of your workforce feels excluded, they will leave. So true. And I'm going to do a shout out for National Women in Roofing, and what they're doing on diversity, and Ray is leading that, and we're going to actually have a Coffee Conversation on that in December.

So stay tuned on that company culture. Ray, thank you. Thank you Joe, Tim, Sherri. You guys are amazing. You're just a wealth of information. I want everyone to know too, you can find, if you want to get in touch with Sherri, Tim or Joe, you can find them in our R-Club in the contractor directory. You can email me. We'll connect you. And this is the kind of networking that is just awesome. And thank you all for being on the panel today, and helping us launch, and get the information out on our trends report.

Tim Brown:

Thanks for having us.

Heidi Ellsworth:

Thank you.

Joe Hoffman:

Thank you so much Heidi.

Heidi Ellsworth:

So good.

Joe Hoffman:

[inaudible 00:56:53] for everybody listening.

Heidi Ellsworth:

And so for everyone who you want to get the trends report, Megan is putting that into the chat right now. It's also on your screen. If you go to RoofersCoffeeShop under the news, it's going to be the first line, trends report. Simple. There is a little form to fill out, but just fill that out and you'll get all four of them from 2016 through this most recent one for 2022. We want to say thank you again to Beacon. Again, the customer voice. I just don't think there's anything more important than really hearing what is causing pain, what is the challenges, what are things that are going well, and that's really coming from all the contractors, all of you. And I want to say a big thank you to anybody and everyone who did fill out the survey. It's so important to hear.

And then I do want to mention, two weeks from today, we are going to have a really special Coffee Conversations. So it's going to be on mental health awareness in the workplace. Mandy McIntyre has started a company by the name of Level Up Consulting, and it's all about bringing mental health into your toolbox talks, making mental health part of your safety program, part of your culture. And Christee Graham and Tom, sorry I'm going to get the name right here, Tom Truelson have both incorporated this into their companies, and are doing mental health counseling, toolbox talks, and certified to really be able to make a change in their culture, and really, at the end of the day, save lives. So please join us. And that's two weeks from today, easy to register online. It's going to be amazing. So once again, to my amazing panelists, thank you so much for being here today.

Sherri Miles:

Thank you. And thank you for making sure that we get the information out in a timely manner, whether it's a trends report or staying on top of things like mental health. I mean, I think you are putting the important issues out and appreciate you for that.

Heidi Ellsworth:

Thank you, Sherri.

Joe Hoffman:

Keep up the good fight, Heidi.

Heidi Ellsworth:

I love having you guys on here. You're the best. Thank you so much, and thank you all for listening. This will be available within 24 hours. Of course, you can listen to all the Coffee Conversations on demand, under Coffee Conversations. You can always find it right at the very top on the right hand side of every page on RoofersCoffeeShop. Easy to get this information. Thank you. Thank you all, and have a great week. We'll see you in two weeks.

Sherri Miles:

Thank you.