Unveiling the 2023 Roofing Trends Report: Sponsored by Beacon! - TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Lee Lipniskis from Levello Construction, Beth Kegley from Beacon Building Products and John Kenney with Cotney Consulting Group. You can read the transcript below, listen to the podcast or watch the webinar.

Heidi J. Ellsworth: Hello, and welcome to Coffee Conversations from RoofersCoffeeShop. My name is Heidi Ellsworth, and today is a really cool day. We are going to be unveiling our Trends Report, which is all about what the roofing contractors and the roofing community is saying. So we are very excited for this today. What we've done is we have, our Trends Report is available on RoofersCoffeeShop and MetalCoffeeShop and CoatingsCoffeeShop underneath the Trends Report. If you go in there, you can download the full report, but we are going to be giving you a glimpse of what we found out today and going through that with some leading roofing professionals who are going to help us look at those trends and look at the results and see what comes from it.

So before we get started, a few housekeeping. First of all, as always, I want to thank Beacon Building Products so much for being our sponsor of the Trends Report. I have to tell you, they care about the voice of the customer, they care what the industry is saying, and it is so obvious by being the sponsor of the Trends Report, all the work that they do with us on this and putting that together. So thank you, Beacon. And we have Beth Kegley here from Beacon, who's going to be helping us with the analysis today. So again, very happy to have them as our sponsor for our Trends Report and for this Coffee Conversations.

I do want to remind everybody this is being recorded and it will be available within 24 hours. So please share it out with your friends and roofing professionals and within your company. This kind of information is really what helps us get ready for the new year, 2024, and to continue to improve our industry. So not only share out this Coffee Conversations, but please share out overall the Trends Report that, as I said, is now available on RoofersCoffeeShop. So let's get started.

First of all, I would like to introduce Lee Lipniskis, who is the president and owner of Levello Construction out of Denver, Colorado. Lee, thank you so much for being here today. Tell us a little bit about you.

Lee Lipniskis: Yeah, thank you for having me. Yeah, so I own Levello Construction in Denver, Colorado. I am in my car today. I apologize. But if you are a contractor, especially in Colorado, you know our weather right now. So we are all about pivoting and trying to get things done before it starts to snow. So I am actually at a job site currently, watching them tear off a roof and we'll roof today. But excited to be here. Thank you for having me.

Heidi J. Ellsworth: Lee, as I've already said, I think it's awesome that you're sitting at a job site, getting work done, but also taking your time out to really give us your thoughts and your feedback, really from what is happening. So thank you. Thank you so much.

Lee Lipniskis: You're welcome. You're welcome.

Heidi J. Ellsworth: And then John Kenney, who is our special editor, special contributor with RoofersCoffeeShop and just pretty dang amazing. John, can you introduce yourself please?

John Kenney: Sure, yep. Well, I'm John Kenney. Right now I'm currently CEO of Cotney Consulting Group. Prior to founding that and what we do is, prior to founding, I've been in the industry 45 years as a roofing contractor on that side. And as anybody knows, if you've listened to me, my heart is absolutely in the roofing industry. That is the gold for me. And I love doing these and I love participating and it's always great to see everybody, and this is a really great panel. So I'm really honored to be here today with this panel.

Heidi J. Ellsworth: I'll tell you what, I'm pretty honored myself, John. Thank you so much. To have all of you is pretty amazing. And as I mentioned before, I want to introduce Beth Kegley, who is with Beacon Building Products. And Beth and I are actually both in Nashville right now at the NRCA fall meetings. But Beth, please introduce yourself. And again, thank you so much for not only being a sponsor but being on this panel today.

Beth Kegley: Yeah, absolutely. Thank you so much for having us. It's always an honor to be able to support. So I'm Beth Kegley. I'm the director of national accounts. I joined Beacon about a year and a half ago. I spent the first 20 years of my career with Owens Corning on the manufacturing side in various different roles.

But what I loved the most about working for Owens Corning was calling on contractors, and I'm so thankful that I get to do that still with Beacon. That is where my heart's at, like John, and I'm sure, like Lee, I love this industry. My entire career has been spent in it, and I'm just really happy to be here and share some data and just chat with you all. So thanks for having me.

Heidi J. Ellsworth: We are so excited to have you. And if there's some of you out there right now thinking, didn't I see Greg Bloom's picture on some ads out there? Greg is actually here, but he had a meeting and so I was like, "Can we have Beth? Beth would be awesome." So Beth, thank you for our win. Poor Greg, his loss. But we are so excited about this today.

I want to remind everybody that the chat is open, so please chat. And we've already, Christine, hello, from New Jersey. Please tell us where you're from. Solange, Karen Edwards, Bill Bailey. Hello. Lindsey Walsh and Jim Rizzo. You guys, thank you all for being on here. We're really excited. Please keep the chat going. Let us know where you're from. If you have questions as we're going, or just comments and thoughts, we're going to be adding them all in. So I see Missy McLean on there too. Missy, good to see you.

So let's start out and talk a little bit about the Trends Report. So this has been going on at RoofersCoffeeShop since 2016, and I give full credit to many of you out there who will know Vicki Sharples, my business partner, first started this. And we did it together in 2016 and we've been tracking this now ever since. Some years have been combined. So this is actually our fifth Trends Report.

And we do it because we want to know what everyone thinks. We want to know what you out there working every day, like Lee is in her car right now, and we're on with her team and her crew out there, we want to know what you think, what's happening, and then how we can continue to bring great topics and also more information to help you in your business every day.

So like I said, that Trends Report is available online, the full one, and Megan already put the link into, and on the backend, as you all know, our amazing multimedia producer, Megan Ellsworth, is in the back also on the chat.

So how did we do it? We opened this March 6th, 2023 and we closed it September 31st, 2023. We worked with Beacon, and they put it out. We also put it out through all of our channels as you can see on there, and we were thrilled when we had 210 responses. I will say, just as a quick note to let everyone know, we did have a winner. We had an incentive to win $250 for everyone who came in. They also received some free classified ads. So we want to make this fun for everybody. But congratulations, Gianna from HER Roofing out of Lake Oswego, Oregon, who won the $250. We are so excited for you. That was great.

So what are we looking at? Our main states and this is very, we see this in our Google Analytics too, but Florida, Texas, California, our largest states. Then you can go Ohio, Illinois, but you can see 38 states and two countries were all represented. So we had great representation from across the country, so we're really able to give some good data on what is happening everywhere.

Also, this slide I find incredibly, this is very, very interesting. If you go back, if you get a chance to look back through all of our Trends Reports from 2016 on, you'll see that really asphalt and single ply were the largest products used by the respondents to this survey. This is the first year that metal is the largest. I find that we hear it, we talk about it in the trends, but now we are actually seeing it. And so I'm going to stop here just for a second because John, did you find this interesting, really looking at this on what products contractors are using?

John Kenney: I did. I think it's a great representation of what's actually going on out there. I've got to say I was not surprised to see metal finally pull ahead in the lead because I'm really seeing much more of it being used in the industry and I'm really seeing it being embraced, especially on the residential homeowner side. You're seeing more and more of it being incorporated into the design and construction.

Asphalt is always going to be up there because that is the major player in the market. It's going to be for quite a long time. Tile, though, I'm kind of surprised tile's at 47%. I've got to say that. That's pretty high. And then [inaudible 00:09:17] say single ply is in as far as the commercial side, that's not surprising, except I think built up is ... You had a good respondent of commercial contractors who are still doing built up. So that one did surprise me a little bit, as high as it is.

Heidi J. Ellsworth: Yeah, I was actually really happy to see this distribution. I mean, really everything was represented as we're going through this. Beth, with what you're seeing every day out there in distribution, does the materials surprise you on anything about this?

Beth Kegley: Not necessarily, especially when you look at your respondents. I mean, California and Florida, obviously heavy tile markets for us as we look at it. I think single ply continues to be that portion of commercial. It's still growing, it's still pushing out some other systems that we've been used to. But no, I think the spread is not surprising to me. And I think especially with the supply chain issues in both commercial and residential, it's a little bit fluid still.

Heidi J. Ellsworth: It really is, and we're seeing it and it's nice to have it validated here. So Lee, looking at this, this is kind of, I know you are on a lot of residential, maybe tell everybody where your focus is, but looking at this and the materials that are being used out there, any surprises?

Lee Lipniskis: I'm kind of surprised at how low the tile percentage is, but I definitely get it from what Beth said, with who responded in definitely California and Florida. But in Colorado, it's not surprising. I do strictly residential, mostly asphalt, a little bit of tile and a little bit of modified bit. But I think the tile percentage was a little bit surprising for me for sure. I figured it would be a little bit higher.

Heidi J. Ellsworth: Especially for your area. Because when I think about Boulder, how much tile goes on in Boulder? Sorry.

Lee Lipniskis: Yeah.

Heidi J. Ellsworth: Yeah, I know. It's really interesting. And we did have a question, is the metal going on commercial or residential or both more? And it's everything. So that's going to count on everything, both commercial and residential. Probably some industrial too, for that question out there.

Okay, so number of employees. I thought this was really interesting too, and this is if you look back at the Trends Reports, early on in 2016, we were much higher one through nine. Looking at it now, we really are seeing that growth of 10 to 49, and also above that, 50 to 99. So really interesting in there. And John, you made a comment about this earlier, that this is really what you're seeing in the industry too.

John Kenney: Yeah, for sure. You had probably the best mix that actually represents the industry. And this is exactly, if I was to take this and do a survey of taking all the data from the government, the taxes, all the stuff that gets filed that tells you where people are at and the size of their company, you're right on. This is spot on, the way your percentages are. And I'm really happy to see that because that means we are getting a great feedback going out through this survey of really as each company and the size they are is how they're seeing their marketplace. So I think this is really, really good.

Heidi J. Ellsworth: Strong data. And one of the slides you'll see in the Trends Report is what that breakdown is on residential and commercial. And what was really interesting this year is usually we're looking at 35% commercial, 35% residential and 40% both. And I think I said those numbers wrong. So anyway.

But when we looked at it this year, 59% of our respondents did both commercial and residential. That is a huge growth and it also shows the diversification, I think, of the industry, that we are getting so many companies that are now doing both and really making that work. So check out, you'll see all kinds of stats there as you go through that.

And then the last one we wanted to note here too was 50% of the respondents were building or business owners and 50% were not. Great distribution. So we are getting thoughts and comments from the entire industry. And if you look back on the old Trends Reports, that has fluctuated, but this is really the most even across the board, obviously 50/50, that we've seen.

Let's get started and go through some of the highlights. So we wanted to start with materials, and one of our questions was which materials have been the most difficult for you to obtain this year in 2023? And for everyone, you saw the dates, it's from March through September, so some of it changes that fast. We may already be seeing some. Should I just move my slide? Sorry, there we go.

So, number one in difficult materials, fasteners, screws and nails at 11%. Then insulation, shingles, single ply, metal, but very interesting, at the bottom, at the leader, 22%, none. Wow, what a great change in conversation from last year. So Beth, let's start with you. Looking at this, what are you seeing out there in the industry with distribution and looking at some of these numbers?

Beth Kegley: Yeah, I think about it from the two buckets of commercial and residential. I think commercial, we're going to see a drastic change, I think, the next time you do this survey. I think that that we've really come out of those issues. Everyone is back to standard, more normal lead times. I think manufacturers are feeling like they're in a much more comfortable spot. Raw materials have stabilized on that side of things.

I think the residential side is another kind of bag of tricks. It's just a challenge. I think everything that could have gone wrong I think has gone wrong for shingle manufacturers. Although the caveat to that is we reported the largest second quarter in ARMA shipments in the second quarter, like in the history of ARMA. So clearly they're figuring out a way around this enormous demand. I think things have still not really come out of pre-pandemic for them. It's been a challenge.

So you've got markets, and Lee's in one of them, you've got markets that are just really still constrained. Nearly every manufacturer is still struggling to get enough shingles out the door. They're all managed availability. They're still struggling with some of their raw materials. So that part has still, I think, hung on. I think, again, I think you'll see a shift in the commercial being way lower on the list and residential still being sort of high on the list as we go into 2024.

Heidi J. Ellsworth: That's interesting. Lee, what are you seeing in your market, as Beth was talking about?

Lee Lipniskis: I mean, yeah, absolutely. I definitely agree on the residential side, especially in Colorado. We haven't had a hailstorm in four or five years and then we had 17 hailstorms in three months, and so it has been a little bit chaotic here. But yeah, I mean the kind of trends that we're seeing right now is shingles are tough, depending on color and manufacturer. And so we've had to pivot a little bit on either who we're buying and what we're buying and being flexible with homeowners on color options and impact resistant, things like that.

And so we're still seeing definitely some shingles shortages. I think for a couple months it was even tough to get fasteners and nails for a while, or something as simple as a furnace cap. We just didn't have them for a while. So I think I'm finding that we're somewhat coming out of that a little bit, but also I believe that it's just, in my world, it's just all about communication with the homeowner and making sure that they understand, hey, you just have to be patient. But shingle shortage is real out here for sure.

Heidi J. Ellsworth: Yeah, and I've also heard colors, like you said, getting the colors you want.

Lee Lipniskis: Yeah, absolutely.

Heidi J. Ellsworth: So, John, on the other side of the country in Florida, same sorts of things. Even though no hurricanes this year, thank goodness, you've had a lot of backlog. What are some of the areas that you are seeing with shortages or not?

John Kenney: Yeah, when you break these numbers down and look at them, they were taken earlier but I still don't think they're that far off. I mean, let's look at ISO, for example. Five percent are having difficulty. That means 95% of the contractors are not having difficulty. So I think if you look at it from that aspect, these numbers are actually fairly representative. Depending on what market you answered this in, you may have an issue in comparison. So I think they're pretty fair about that. But right now, overall there's no doubt between all over the United States, Florida market, even up in the Canadian market, material is not the major problem, especially on the commercial side, that it was coming through the pandemic and out of the pandemic.

The only thing I will note on this is going into '24, unfortunately you're seeing it in other manufacturing sectors other than roofing. We are only ever one disaster, one supply chain hiccup away from having a problem. So the only thing I'd like to just, and I never, I'm a major optimist that people know me and I'm a realist at the same time, but always be prepared. The best thing you can do to have your difficulties in materials not be an issue in your business is pre-plan and pre-order as early as you possibly can. And again, this comes down to running your business ahead of schedule rather than try to catch up from the rear.

Heidi J. Ellsworth: Yeah, that's great advice. And we are seeing in the chat, and I want everybody to please let us know what you're seeing out there, but we heard it was fasteners and really screws, but color and shingles is the worst, pushing the job out. So that, I mean, we're still seeing it across the board, so thank you. And then communication through the channel will help everyone win. I think so. And I have to say here, Beth, just before we move on, it's the relationship with your distributor too. You have to have a good relationship with your branch.

Lee Lipniskis: Absolutely. Oh, sorry, go ahead. Go ahead, Beth.

Beth Kegley: No, you're good. You're good, Lee. Go ahead.

Lee Lipniskis: No, I just, that is so crucial, is having a good relationship with your distribution rep and just being able to have those talks. I think honestly, I buy from Beacon, but I think I talk to my Beacon rep four or five times a week. He is just phenomenal and just very, will email us every other day about, hey, this is what we have, these are the shingles that are available, this is how much we have, get on it. I mean, right now it is very crucial to have a good communicative line between us as contractors and distribution.

Heidi J. Ellsworth: Yeah, so critical. Okay, let's go to how contractors are purchasing from distribution. And I think, Beth, this has to be of interest, but sales reps in the field, to what Lee just said, 32% right up there. And it was interesting when we were going through some of this with some of our younger folks who work at RoofersCoffeeShop, they're like, people are still calling in and people are doing these things? So it was really interesting. But look at the growth of the website app or the distributor app and also third party platforms is really interesting. So Beth, maybe walk us through this a little bit on, is this what you're seeing?

Beth Kegley: Yeah, I think all of us could agree it will always come back to being a relationship business ultimately. I mean, these jobs are not small, they're not small potatoes. So we're asking people to spend a lot of money with us as a distributor. So I think that personal touch will never be absent, I hope.

I think the digital piece, it is accelerating quite significantly I would say over the last five years. I think we've seen it come about 10, 15 years ago, but there's so much focus on it. A lot of the younger people coming up through the profession are used to using a lot of digital interaction. That's how they work, that's how they create efficiencies. And I think it's important for us to see that spread across the industry. It reduces errors, it, again, creates efficiencies, it helps save time. You can order on these third party platforms from your couch at night when you're placing your POs with distribution. There's a lot of convenience there. So I think we'll still continue to see it push and move in that direction more.

And we love it, too. The more efficient we can be for our customers, the better. So it benefits everyone in that food chain of creating more efficiency.

Heidi J. Ellsworth: It does. And you know the one I'm excited about on this, fax is at zero percent. Finally, we've moved beyond the fax. It's so exciting. So John, you've been watching this for a long time, and people who, when fax was everything that we were doing and now to the website, and obviously the relationships in the field, which are so obviously critical. What's some of your thoughts on this?

John Kenney: Yeah, I think fax is not a surprise. It's been replaced by more better and useful technology for sure. But yeah, I remember those days. From my perspective, I think phone and sales rep kind of go together. I really do. I think that means that that's a relationship type of buying that's going on, whether it's phoning in directly to the person behind the counter that you have a relationship to or you're dealing with your sales reps. So that doesn't surprise me. You put those two together, you're up almost around closer to 50%, which I think is still the case from what I hear out there in the industry.

I do see the in-person branch, that doesn't surprise me. A lot of, especially going back to our survey, if you've got one to nine employees in your company, you're stopping at that branch. And I did it myself coming up early days in the industry, where I would go with the truck and load it and be ready for the next day when we were going out.

And then I think the distributor app and the website and the third party, again, I want to lump those together because that is the newer technology, moving towards ordering online. I could be wrong, but I think that's going to be your greatest growth over [inaudible 00:23:46], especially the residential sector, over the next two, three surveys that come out that you do over the next couple of years.

Heidi J. Ellsworth: Yeah, it'll be interesting. We're going to have to watch this one because I think you're right. I think this is going to really start changing. So Lee, how do you order materials?

Lee Lipniskis: Well, it's shifted very much. In the first year of my business, I was a one-woman show. And so efficiency is very key for me, because as you see, I'm out in the field. And so integration of technology from my CRM system to my distributor has been crucial for me to be able to be here and not skip a beat. So if I call my distribution rep, it's because I have a question or I want to chat about something. But for the most part, it's all online through the app, through my CRM, which then gets to Beacon. I mean, I'm just going to talk about Beacon because, one, I love them, and two, I strictly use them. But I go through the Beacon Pro Plus app or online that way, and it's phenomenal.

But it's technology now within our industry I think is shifting so much. And I don't think, as Beth said, I think relationships are so important in how we buy things and who we communicate with, especially at distribution. There's one guy at a Beacon here in town who is the forklift driver, his name's Chris, and we just connected and I love that. Every time I see him, we get excited to see each other and we hug each other, which is phenomenal.

So I feel like relationships are not going to go away, but the way that we are buying things is shifting. I can buy a roof at midnight on an app, and back when that was not available, that efficiency wasn't there. So I'm loving the way that we can order right now, because I'm out in the field so I need to do stuff at night to keep going.

Heidi J. Ellsworth: Don't we all? That is it. And I want to say, everybody's agreeing on here about communications, we talked about earlier, and really being transparent to help prevent disappointment, and that by having this technology, you know. And then we also, I love this one from Adam, I just have to say it, is that, what is a fax? Okay, I love that. That cracked me up. And then good sales reps from distribution can make or break it. They're so key, especially during peak install season, from Christina Hill. Christina, I'm so excited you're here. Thank you so much. And Jim Rizzo, thanks. Technology help reps sell more instead of being order takers. So true.

So we are going to move on now to the next topic, which is social media platforms. We found this really interesting because in our world of RoofersCoffeeShop and with all of our crew, there is a constant talk about this. What's the better, you know, Instagram, TikTok, Facebook, LinkedIn, Facebook is dead, but guess what, in roofing, nope, it's not. So 85% had Facebook, 65% LinkedIn. That's really what we've been finding also from the industry. But it's really interesting to see the growth of Instagram at 53%, YouTube. I'm just shocked that Twitter X is still there, and then you even see some TikTok coming on.

So Lee, let's start with you. What do you use for your social media platforms? And does any of this surprise you?

Lee Lipniskis: No, it does not surprise me. I use Facebook and Instagram and a little bit of LinkedIn. I think that LinkedIn is, if you look at, again, the demographic of who filled out your survey, a lot of Florida, a lot of California, they're probably more commercial roofing. And I believe that if you're in that commercial space, then you may use LinkedIn a lot more than an Instagram or something like that.

But absolutely Facebook, it doesn't surprise me because my crews are on Facebook, not only myself, my employees, but my crews as well. And we can communicate that way through social media. They're not really on Instagram or TikTok or something else, LinkedIn, they're not on there. So it really doesn't surprise me that Facebook is the top.

Heidi J. Ellsworth: I think that's really interesting too, because it's not just for advertising or getting your information out there about your company, but it's about communicating with people in your circle and that Facebook provides that. And you're right, it probably provides it through Messenger better than anyone out there. Beth, what are you seeing with contractors that you're seeing across the country?

Beth Kegley: I think I'm not surprised that Facebook is out and above the rest. I think even when I look at it from my own personal consuming habits, Facebook shapes a lot of our opinions about how we look at the world, how we buy things, what we do, what groups we belong to, what circles we run in. So I think it's one of those platforms that is literally for anyone and everyone. You can use it as a local business, a store, you can create a fan page for yourself, you can be an influencer, you can direct people to your website. I think it's a great place to increase your brand awareness especially. So that's why I think it's such a powerful tool. I think you can get really specific on your audience even, so that makes it powerful as well.

I think Facebook is of course a crowded marketplace, but I don't think that contractors should ever sit out because of that. I think you can always make a space for yourself. I think small businesses especially can't afford to not be on Facebook. I think it continues to prove itself as the most cost effective option, really. So I think it's well worth taking advantage of. I use Instagram less, but I'm 43. I don't know if that puts me in a different demographic. I love Facebook and I don't ever see getting off of it, so I am—

Heidi J. Ellsworth: I'm just glad that Facebook now will automatically go onto Instagram. So then that helps me because I don't have to do between people and stuff. But John, you are the king of LinkedIn, and looking at these numbers, I was kind of actually not surprised. I think LinkedIn is growing, I think we're going to see this change coming up. What's your thoughts?

John Kenney: Yeah, I mean, I could tell you on Facebook, jumping back to that one, if you're a residential contractor, that's where you've got to live. That's where your business is going to come from. But I think commercial contractors kind of miss the boat not having a page on there because you're liable to have somebody that's going to see your stuff that works for a company that's going to need something. But absolutely, if you're a commercial contractor, your business to business belongs on LinkedIn. That's where it happens. If you're business to business, LinkedIn is the place where you're going to be seen. You've got to be, LinkedIn's a little bit different, you've got to kind of be a thought leader on there. And I think showcasing your projects really puts a roofer out in front and you get your most hits.

Instagram is a little bit different. I use it. I think Instagram is kind of a connection to Facebook, but I think Instagram's probably split. You could be successful commercially, you could be successful as a residential, and it's a great place to showcase. YouTube, learning videos, get them out there. A lot of companies do not promote themselves properly on YouTube. It's good.

The only thing I will say about Twitter is I think the only reason Twitter hit 26% is because we all keep trying to hope Twitter's going to do something. I still go on there myself, but it's definitely a platform that I've never seen a whole lot of any positive for business coming out of either residential or commercial. That's just my thoughts on that.

Heidi J. Ellsworth: I always say it's for SEO, and there you go. That's just about what it works for in this industry. But it's really interesting, and I do want to comment here that I thought was really good, is how LinkedIn has changed from really being a, and Christine said this, to be a place where people went looking for jobs, and now it's used really to connect people. And I find that all the time. I use it to connect all the time, and it's very powerful in that direction. And speaking of that ... Oh wait, did I go too far? I thought I had one more. Nope, that's it. Okay.

So Megan did put in the chat, let us know what you're using because we would be very interested, and if you have any questions, but we're going to move on to associations, which again, some great data on associations. Are you a member of any trade association? 66% said yes. That is up from years past. We definitely saw through the respondents that this is definitely something that's important that is going on. And we also asked, are you a member of your state or local RCA? And that was really interesting too, where 54% were no. So 66% were yes, I'm part of an association, but when we got down to the state or local RCA, it was 54%.

And then ... Oh shoot, sorry. So we also have a slide in the Trends Report, I thought it was next, but we have a slide in the Trends Report that also talks about which associations are being mentioned the most through our respondents and it's a word cloud. So it's really interesting to see if your associations are on there and what they're doing.
So let's start, John, let's start with you. You have been involved in associations your whole career. You have worked so much within the Florida FRSA. What are some of the things that you're seeing around associations? And really when we're talking about that growth in people being a member, but maybe a little bit less on the local and state?

John Kenney: Well, I think a contractor is missing a lot of advantages by not being involved on the local or state level. Now, I know not every area has a local contractors association, but that is a great place to get your feet wet when you're a younger, newer contractor coming up. And also to get the mentoring ability that comes along with it. And then the state associations really is you're fighting for what's in your area that's really important to your business.

And then I think on the national level, that is where you're going to the next. A lot of people from this accordingly are belonging on the national association more than they are the locals. But I think national's completely different. I think we look at that as to be more of what is shaping in the USA, the whole thing. And even I know up in Canada, they have their national association, but they also have it by provincial, and that works out really well. And I think you need to be involved at that lower level and the state level. I think it'll benefit you growing your business and also help promote yourself out as a local professional in your area that you're working in.

Heidi J. Ellsworth: Yeah. Yeah. I would love everyone in the chat, if you don't mind, share what associations you belong to. We'd just love to see which ones you're involved in. Beth, you and I are here right now at the NRCA meetings and the Roofing Alliance we're going to be at tomorrow. Both such important things. So talk to us a little bit about the importance of associations and what you're seeing with people being involved, membership, all those.

Beth Kegley: Yeah, I think there's a few benefits that we've sort of touched on. John, you touched on them really eloquently. I think the personal networking obviously is fantastic. Best practice sharing is fantastic. But I think the one voice, the one collective voice as an industry, just is a really powerful, impactful initiative for us to all come alongside one another and push this industry forward. And that could be a whole variety of things. I think from, I guess supply chain issues, trends. What are we seeing in the industry? Just like this time that we're spending together today? What are the trends? What's happening in labor? How can we help one another? How are we adapting to those market conditions? How are we all maintaining an edge in this industry?

I mean, Heidi and I sat in a breakfast this morning that talked quite deeply about some things that were not even on my radar as a distributor, some things that are changing in the industry, and protecting our workers in different ways. And so when you look at NRCA, it's this collective force to push the industry to just, I guess level up our game, create even more professionalism, even more safety standards, even better practices, more advocation on Capitol Hill. There's so many things happening in the background.

And I think when you marry that with your local and state organizations, I think it just brings it all together and then helps it drill down those large industry initiatives to how does this apply to my 50 mile radius or whatever it is. How do I apply this to my local market? What does that mean in the state of Montana? What does that mean in the state of Florida?

So I think it's important to be involved in both. I have seen it be personally and professionally very beneficial for me. I told you all I love this industry, and spending time with people like Heidi and amazing industry experts, you can't pass it up.

Heidi J. Ellsworth: I feel the exact same way, Beth. I feel the same way. It brings so much. And I can remember sitting at a Colorado Roofing Association, many times next to Lee. Lee, I know you're very involved with Colorado. You and I have been on the board of National Women in Roofing, so many things. So associations, what does that mean to your business?

Lee Lipniskis: I mean, I don't think I could say it more eloquently than Beth just said it, but I will attempt to. Associations for my business personally and my personal growth, I've been in the industry for 17 years now, and so I don't think I would be where I am without associations or without the people that I've met there. And Heidi, you have been very influential in where I am today.

But National Women in Roofing is huge as far as, yes, I firmly believe in local associations, and having that collective group, like Beth said, is very crucial, I think, to our industry and leveling up our industry, absolutely. But also other associations, National Women in Roofing has been huge for me. I have a group chat with three other women business owners and we talk every day, and they're all over the nation.

And I just met a new friend of mine in Colorado where we've been friends for a year and a half, never met, and we just became besties. And she owns a company in northern Colorado, and we share subcontractors. That's not normal in our industry. And so I feel like associations just bring people together, and especially during Covid, we had to share, we had to come together as an industry to figure out what are we going to do? Who has what material? And how can we raise each other up and help each other so that the contractors that are out there don't fail? So I'm a huge advocate for associations.

Heidi J. Ellsworth: Well, and it's so true. I think about where it's brought my career and the friendships that we've made. And when I look at the chat in here, I love all the people. Kathy [inaudible 00:39:32], thank you so much, and has just joined National Women in Roofing. She's going to go to National Women Roofing Day this year. This is the kind of stuff that really makes a difference, I think, and keeps people, as we move on to our next topic, it's really what keeps the labor and retention.

This is one of the things that we have found in RoofersCoffeeShop is the more our crew gets to be involved in the industry and in the associations, the more we get to, they want to stay. They find the passion of just exactly what Beth and Lee and John, you were all talking about.

So, let's move on to the top business issues because this kind of goes right hand-in-hand as we're moving down there, but the top business issues that were concerns in labor, so we're going to break this down into a couple of different categories, but in labor was recruitment and retention at 54%, then training, employees plus HR and then hiring. So really, that recruitment and retention is leading everything.

John, you do tons of training. You do consulting for businesses on this direction. I'm sure this slide does not surprise you whatsoever.

John Kenney: No, not at all. And it's going to get worse. Again, I'm not being pessimistic, but it is. Until we get it all figured out, and I don't think there's any way that any single organization or anybody can figure it out alone, but I will tell you the biggest tip on this is put training and your recruitment and retention, they really go hand-in-hand.
And the biggest thing that I'm seeing people having the most trouble with, the retention part of it, is you don't have a substantial training program within your company. You can't depend on outside. You have to have something in your company.

And the other thing for retention is mentoring. You've got to take the time as a contractor to really set up a mentoring program within your company. Being part of organizations can get you the resources you need, but you've got to take that commitment to do it. These numbers are not going to change until contractors take this one, as they say, bull by the horns and pull it in. And they've got to really start doing this within their companies. And I think you're going to see that change over time.

Heidi J. Ellsworth: Yeah, culture is the key. And recruitment and retention isn't just with the roofing contractors. It's across the board, it's in manufacturing and Beth, it's in distribution. What are you seeing?

Beth Kegley: Yeah, I think I'll speak to the contractor piece of it, just something I've noticed, and I'll talk to distribution too. I think on the contractor piece, I've seen several, really small, large and medium-sized contracting companies do in-house recruiting, and they're no longer outsourcing it. I might be late to the game, but I've had two people in the last three days tell me, "Oh, no, no, no. We have a full-time in-house recruiter who that is their job. They're not an admin trying to field resumes. They're not an admin trying to take candidate phone calls. That is what they do on a full-time daily basis."

And I think being intentional about that allows you to respond really quickly because I think good candidates, I think we all know this, good candidates, they disappear quickly unless you are right on top of it. And I think having somebody just very, very laser focused on that effort will definitely help. It's not going to solve it, like John said. I think this is an issue that it seems like it's on every slide deck I've looked at over the last 21 years for trends in the industry. It's just a continuing piece of challenge. So how are we refining our processes to respond to that?

I think in distribution it's the same. I mean, we all probably know this too. A lot of us get into the industry and rarely leave. So we start to see the same people flow through and show up at the same places, and we just have to make sure we're capturing the best talent and capturing it quickly. But John also said it, you've got to get them, but you also have to spend very intentional time doing formal repeatable onboarding. So you've got a consistent process, you've got to pour into them. I think the younger generations have this expectation, right or wrong, that, okay, employer, what are you doing for me? It's not about what I'm bringing to the table, but what are you doing for me? How are you investing in me? How are you working your butt off to keep me at your company?

And I think we cannot turn a blind eye to that. So how are we investing? How are we giving them professional development skills? How are we honing on their strengths and leveraging them so they're successful and satisfied? So it's a big task.

Heidi J. Ellsworth: I think so, too. There's a lot there. And Lee, talk about growth. You have grown so much, exponentially, over this last year and now have a number of employees. Does any of this surprise you on an issue for you?

Lee Lipniskis: I look at it as internally my business growth, and I actually have a team now and full-time employees. And so that has been interesting on I am that recruiter. I mean, I wore 15 hats for a really long time and now I don't have to do that as much anymore. But I found recruiting for a small business, it was all about social media for me. I went on social media, I went on Facebook. I'm a part of a lot of city Facebook groups or word of mouth, so to speak. And that's how I found my office manager, and she's absolutely wonderful. So I'm finding that social media is definitely a place where people will go to find a job.

But I also think about recruiting and retention in regards to my crews, and how do I find good crews and how do I retain them? What kind of working relationship do we have together where they say, "Hey, I want to work for Lee with Levello more and more?" So I find that it's that hands-on approach and just all around communication to retain those subs because we had a labor shortage for a very long time, and then the 17 hailstorms this summer happened, and now it flip flopped. Now there's an abundant amount of labor. And so that supply and demand.

And so it's that fine dance between what do we do for our subcontractors, as in what Beth said for newer, younger employees, what do you do for me? Well, I have that with subcontractors now. What do you do for me? Why do I want to work for you and do roofing, siding, whatever, for you? So it's been very interesting this summer as a big flip flop.

Heidi J. Ellsworth: I think that's really interesting. Subcontractors have been a major discussion here at the NRCA meetings. And Lee, you are right on the pinpoint, and you can see here, contractors, labor shortage, where we're finding, when it says contractors that's in the field, we're seeing those things.

And I want to go back to what you said, Lee, because I think that you were right on, that you are looking for and finding people on social media. These are the recruiting methods that people came back with. 75% was on referrals. 49% were online job boards. I will just mention there, RoofersCoffeeShop classified ads, and advertising, but we don't really have social media on here. And I think you're right. That is the one that should be. We found some really great people for us on social media in our little town of Sisters, Oregon too, on Facebook. So when you look at this, are you doing any of these other things, or are you mostly focused, seeing success on social media?

Lee Lipniskis: Both and I think referrals are amazing. That's how I found my field supervisor, was through a referral, and then my office manager's through social media. So I think above all, I would love a referral. We would all love for somebody to say, "Hey, I have a great candidate for you. They have X, Y and Z skills. They would fit you perfectly." Referrals I think are amazing. And that number doesn't surprise me at all. Not at all.

Heidi J. Ellsworth: John, looking at this, when you're seeing any of this, does any of this surprise you or is referral still the key?

John Kenney: No, referrals actually is the most successful method that a contractor can use to hire a quality employee because most people are not going to recommend someone to bring in the company if they're going to make them look bad. So, you've already got kind of a good screening right up front. So I think referrals is a huge way to improve on getting more quality people into your company. And you've got to have some incentive backed programs working with that and make sure everybody's got some skin in the game. And you set them up correctly, they're one of the greatest successes you can use for recruitment.

Heidi J. Ellsworth: It's true. And Beth, this has been a huge topic here at NRCA and also what you're hearing now in the contractors. What are you seeing?

Beth Kegley: Yeah, I don't disagree with any of this, any of the comments John or Lee shared and any of this response. I know for my time at Beacon, my time at Owens Corning, referrals were paramount. I think they do not just stay in the contractor space. I think distribution, manufacturing, a lot of different industries. I think the success rate, I would be shocked if it was lower anywhere. I could go on about that because I think that is the key. I mean, John said it perfectly. You've already got someone backing this person. So a lot of the upfront work of who is this guy, who is this gal, is done.

Heidi J. Ellsworth: Yeah, it is. I really think, and this hour is going by so fast, so I just wanted to show this slide on retention methods [inaudible 00:49:49] work. I think that obviously you have that in Colorado, Lee. Benefits, safe work environment, training, all the important things, but this is what a retention is looking like and this is what people are really seeing to keep their folks there.

I wanted to go onto this top business issues today because I found this one to be really interesting, because like Beth, you just said it doesn't matter what business you're in, a lot of these are the same. And so these top three things are exactly the things we're dealing with at RoofersCoffeeShop, and I was like, oh yeah, these make a lot of sense.

So Beth, let's start with you. I mean, as you're looking at the contractors out there who you're working with and just the industry overall, the expansion and growth, taxes and regulations, insurance, all within that just a percentage point, what do you see?

Beth Kegley: Yeah, one of the things I think that's on the top of my mind is the expansion and growth piece. And I think there's a lot of different ways you can define that. I think the consolidation that's happening on both the residential and commercial contracting space, I think that's of concern. I think a lot of companies still want to continue to grow, but they're up against some changing dynamics with these companies being acquired and things are looking differently.

I think the taxes and regulations, I think that that pressure may be coming up from the homeowners even. I mean, we're all personally feeling some changes there too. So I think that's definitely top of mind. Yeah, the uncertainty in the economy, of course. I'm surprised that's not higher. I think some people just, they tow their own rope, they're not worried about what's happening in external marketplace. But I think a lot of people are still a little bit anxious about how that's going to play out and how that's going to impact homeowners reinvesting in their homes, building owners pushing their budget off or pulling it forward. There's just so many dynamics. So yeah, those are some things that come to my mind.

Heidi J. Ellsworth: It's really interesting looking at past Trends Reports, economy has been much higher before. But now I found, this is probably one of the most interesting slides to me that came out through this. And John, I want to kind of hone in on that insurance one, the third one down, because you have been very active with this and this is causing a lot of pain.

John Kenney: Yeah. I think insurance, depending on what type of contractor niche you're doing, it means a couple different things. I think on the business operations side in that it's harder to get insurance than it used to be, and it's more expensive and you're fighting that. But as far as insurance goes, if you're in Florida is a great example of the insurance market that's gone haywire and our legislature's made some changes and it's gotten even worse.

You're a residential contractor now. You have a whole new set of rules to go by in order to be able to navigate through the insurance world. It's completely different than it is in most states. You cannot have that representation to the insurance company anymore. They're forcing people to re-roof in 15 years in the insurance market or you're paying a hefty premium or a dual deductible. And then also there's a lot of roof systems and methods that we're used to that are not acceptable anymore to the insurance companies that are being forced out of the park.

So the only note of caution, I'll put this plug in, I know you've got an article coming out that we worked on together explaining more of this for in depth. I don't want to take the time up now. But everyone in the US needs to take caution on this. This isn't just happening in Florida. Insurance companies are nationally wide and they want a huge battle. So, they're going to take that win and it's going to start, you're going to see it in all your other states, one after another, and that's how it's going to go.

Heidi J. Ellsworth: Great question from Kathy. She said, "What can manufacturers do to help out roofers in any of these areas?" So Lee, let's take that to you. When you look at this, how do your manufacturers help you with some of these pain points?

Lee Lipniskis: That's a really great question. I don't know. Honestly, I don't know how to answer that because the issues that are here, taxes and regulations and insurance, I think of what I pay in insurance, general liability and workers' comp insurance, not necessarily what manufacturers could do. Maybe Beth can answer from a distribution point of view.

But Heidi, I have no idea how to answer that because I am in it with them, trying to navigate my own issues with insurance as it pertains to a small business versus I am in a hail market and I work with insurance companies, and that's my background as an adjuster, former adjuster. But it's been really tough out there to navigate, just all of it in general. They're cracking down for sure.

Heidi J. Ellsworth: Well, I think you have a perfect point too, because really when you're talking about expansion, growth, well, maybe not that much, but taxes and regulations insurance for sure, that's just like there. But we do know manufacturers are doing a lot to help with advertising and communications, to help with trainings, and to even help on how do you grow your business in a sustainable method. So I think sometimes when you look at some of these, you can go, okay, this is where they're helping. And maybe that's why they're a little bit smaller, less painful than some of the things that are, to your point, really hard to do.

And I want to keep going because unfortunately we're at the end of the hour. So my panel, hold on. We're going to whip through these and I have one more. So greatest training needs, new hire training, technology on the roof, certifications. Again, this is all available in there, but this is the last slide that I really wanted to have just a little bit of discussion. So we're going to make it quick, a little fire around here, but the sustainable practices and offerings, how important this is. Huge topic right here at NRCA, talking about sustainability, what needs to happen.

And you can see this is what contractors are offering, what they are doing for sustainability. And it's garden and green roofs, recycle or tear off in construction waste, solar solutions, use market recycled products. I thought this was really interesting. Beth, just give us your thoughts on this.

Beth Kegley: Yeah, I think the solar piece of it is, I think we thought that would grow years ago. It fizzled and now it's almost like it's a reborn trend in the industry, which is really exciting to us. I think we're looking as a distributor is how do we collect some of that construction waste and partner with some of the manufacturers that are trying to push that forward? What do we do as far as our own fleets? Do we switch over to more hybrid or electric vehicles? So there's, yes, a lot of excitement I think around this space.

Heidi J. Ellsworth: And it's going to be forced, so we're trying to get in front of it. And Lee, you talk about recyclability and Colorado, Denver is the big green roof. How do you see this?

Lee Lipniskis: Yeah, I definitely agree with Beth as well. I think solar is very, very popular here in Colorado just because it's always sunny, and it's a growing trend right now. And as a contractor we used to be able to recycle shingles here in Colorado. We don't anymore. And I would say I would love to get back to that. I hate being wasteful and I think that there's just such a big missed opportunity here in the state and maybe also nationwide, to where we could recycle more products. I just hate being wasteful. So that's it. If we could figure that out, that would be fantastic.

Heidi J. Ellsworth: There is something where the manufacturers can help. That is, and I know a lot of-

Lee Lipniskis: There you go.

Heidi J. Ellsworth: ... manufacturers are working on it right now. That's what we need probably more than anything. John, we're going to, last comments on the sustainability and overall.

John Kenney: Yeah, I'm going to hit on the garden and green roof. We've touched on the others. This is going to be growing for probably areas that people aren't thinking about, but I can tell you from behind the scenes, where I'm seeing it transform in other areas, is this is going to be an urban solution for floodings in that it's going to be used in the blue roof concept to slow water drainage down. Excuse me.

And I think you're going to see that grow tremendously over the next 10 years for other than what you think. It's not so much for the green roof to be on there for having the garden look more than it's going to be for controlling flooding areas and controlling the water flows.

Heidi J. Ellsworth: Yeah. Watch this. We're going to keep doing in our Trends Report. So much is out there. I just want to thank all of you so much for being here today. You're amazing. We had some great questions. How do you recycle shingles? I just want to say there is a Coffee Conversations on that. Go in and look. You'll see one from Owens Corning, I think it was last spring. So there is a lot of work being done on that. A lot of great information. So John, Beth, Lee, thank you so much.

John Kenney: Thank you.

Lee Lipniskis: You're welcome. Thank you.

Beth Kegley: I appreciate you having us.

Heidi J. Ellsworth: Love it. And thank you, Beacon, again for listening, the voice of the customers, the voice of the industry. We are so proud to have them as our sponsors and our partners in really getting all this information out to you. Please be sure to download the Trends Report. You can find it. It's in the chat. If you have any problems, you'll be able to find it on the homepage or under the navigation, under the newsroom, you'll see the Trends Report. So please download that.

And then join us in a couple weeks with IB Roof Systems, and we're going to be talking about regulations and what's happening out there that really can affect. And since that was a number two pain point, taxes and regulations, you don't want to miss this Coffee Conversations. So we are excited to have you. Thank you so much. Please share this. It will be available on demand within 24 hours, and we will see you on the next Coffee Conversations. Thank you for joining us.