What’s Next in Roofing? 2024 Trends Uncovered! - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of an live interview with Rachel Hoover of Ace Roofing, Jon Gardner of Owens Corning, Amanda Veinott of Maven Roofing and Lauren White of RoofersCoffeeShop. You can read the interview below, listen to the podcast here or watch the recording.

Intro: Welcome to an exciting episode of Coffee Conversations. My name's Karen Edwards, and I am going to be your host for this morning's conversation, which I'm really looking forward to. We've got a great topic and we have some great guests. It's all about what's next in roofing. It's our 2024 Trends Report. Thank you to our friends at Beacon. They have been a sponsor and supporter of the Trends Report for the last few years, and we wouldn't be able to do this without them. So let me jump right in and well, before I start with introductions of our guests, I do want to let everyone know that we want this to be a conversation and we've got the chat open. There's Kyle. Welcome everybody. Tell us who you are, where you're from. We want your comments, we want your questions. We want this to be a conversation as we go through. So let's get started and I will introduce, well actually Jon, I'll ask you to introduce yourself.

Jon Gardner: Good morning, Karen. Good morning team. Good morning everyone on today's podcast. First and foremost, Karen and to the Roofers Coffee Shop team, thanks so much for the invitation and all the great work that you do for this industry. Really good stuff. For me, I'm a long-timer in this industry. It seems like once you get in, you never get out. I started in 1993 and quite literally, I just never left because I love it. And for the last 13 years I've been with Owens Corning, and today I lead our learning and development and strategic partnerships for the company. And what that means, at the end of the day, it's really developing the strategy and executing ways and resources that we have to help our contractors scale.

And today, the conversation that we're having really points to a lot of really unique and amazing changes and adaptions that the roofing contractors are having to make and wanting to make to drive their businesses forward. And so we're really tapping into the next level ways in which that we can help and support our partners in their endeavors. And we look at it as a small business, and so we look at all the different areas of where we might be able to help support. So a really pleasure to be here and thanks so much Karen and looking forward to talking with the team.

Karen Edwards: Yeah, thanks Jon. We're glad you're here. Next, Amanda, please introduce yourself.

Amanda Veinott: Sure. Hi everybody. I'm Amanda Veinott. I am the founder and owner of Maven Roofing out of New Jersey. I am here because I'm giving the owner's perspective, at least one of them, about the data set that came in from the study. I'm really excited about that.

I entered the industry in 2020, so not quite as long as Jon. I had a whole two careers before getting into roofing, which many of us seem to share that same story. I used to do human capital management for global companies and private equity, and then I moved into business ownership for a completely different industry in 2018. Lost that business due to Covid and then pivoted into the construction industry shortly thereafter. And then I started my business in 2023. So we're about 19 months old right now, and I can't wait to get to the two-year mark very soon. So I'm looking forward to that.

Karen Edwards: That's exciting. And Amanda didn't say this, so I will. She was the recipient of National Women in Roofing's Rising Star Award last year, so woo-hoo. We're so glad that you're here. Okay. And Rachel, please introduce yourself.

Rachel Hoover: Hello, my name is Rachel Hoover. I am the director of marketing at Ace Roofing. We're on the Exterior Solutions company based here in Montana, Bozeman, Montana, anybody who knows where that is. We are a residential commercial roofing contractor. We do work all over the state of Montana. We've been in business for a little over 20 years now, so I have not been with the company that long. I joined roofing, transition similar to Amanda was saying, about a little over three years ago. I've been with Ace that whole time and a wonderful company. I also am the vice president of the Montana Roofing Association, so I've had the pleasure of getting to work with Roofers Coffee Shop a bit through the association. They've been incredibly supportive, so we love any opportunity to work with them and excited to look at the data and get to discuss some of that.

Karen Edwards: And vice President means you're going to be president next, right?

Rachel Hoover: I don't know if that's how that works, but we'll see.

Karen Edwards: Usually, I don't know. And less but not least, Lauren, please introduce yourself.

Lauren White: Hello everyone. I'm Lauren White. I am the editor here at the coffee shops, and I have actually been here for about five years now, which is crazy, based out of Bend Oregon. And I am the project lead on the Trends Report and Trend surveys. So excited to talk more about it and look at some graphs today.

Karen Edwards: And some numbers. Yeah.

Lauren White: Yes.

Karen Edwards: Okay, so here it is, the drum roll please. Lauren, why don't you start us off and give us a little bit about the survey and when it started and how it was promoted.

Lauren White: Yeah, definitely. So we've been doing the trend survey since 2016, and this year we had it open for, I just realized about four months. So we had a really big push to get it out to everyone, and we actually got the same amount of responses as we did last year, 210, which was shocking and did a lot of promotion, lots of emails, lots of news blasts and we did a couple of things different this year. We know that everybody's time is valuable and taking a really long survey isn't always part of it. So we made everything multiple choice year with the option to type in another option. Before we had a lot more free response options. So just really honing in on that data and getting exact responses from people, but leaving that option for adding more input. That being said, some of the graphs that you'll see later on had the option to choose all that apply.

There are certain ones that we didn't want to limit people on. So that being said, the graph data might look a little different. It might not add up to a hundred percent. Some we did in percentages, some we did in just the number of responses because we thought that was more valuable to know. And most of the questions we like to keep the same throughout the years. We did a couple different ones this year. We did a focus more on subcontractor crews, which we'll talk about a little bit later on. And sustainability, again was another one that we did a bit of a focus on this year as well. But yeah.

Karen Edwards: Okay, so let's look at where people were. We had a pretty good representation across the country, and you notice our panelists here today, we have Amanda's East Coast, Rachel is more western in Montana and Owen's Corning of course works with contractors all across the country. So we really wanted to bring in people that could speak to what they're seeing in their markets and in their areas. And we're looking to you, our audience out there to chime in as well, if you agree, disagree or have questions. Interesting Texas, Florida, California, they're always are big states, but look at New Jersey, Amanda, you had a nice representation there on the graph.

Amanda Veinott: Well, it gets us into the roofer on every corner thing.

Karen Edwards: Just like a pizza shop, he said.

Jon Gardner: Let's skip Connecticut one. They have one. So that's my state.

Karen Edwards: Was that you, Jon? Probably not. Okay. So we asked this question every year of what type of materials do you install? And all that apply is an option and metal's in the lead every time for these responses. Now I know Amanda, you said in terms of metal, that's not in the market really in New Jersey, but accent metal is right?

Amanda Veinott: Correct. So we don't do a whole ton of full roof metal, but every higher end home seems to need some metal component.

Karen Edwards: Okay. Rachel, what about Montana?

Rachel Hoover: Yeah, we're pretty similar. We don't install a whole lot of metal either, except some accent metal. We are largely asphalt, both on our commercial side and the residential. I'd say on our commercial side, we also do quite a bit of single ply and in some of our, we service a lot of resort towns and so in those markets we are starting to see more specialty products like Raba, DaVinci, but I'd say we're largely asphalt.

Karen Edwards: Okay. And is adhesives under the specialty bucket is the question? I would think that if you're talking about spray foam, different kinds of systems like that, that's probably going to be where people would've answered that. Yep.

Jon Gardner: Yep.

Karen Edwards: Okay, excellent. All right, so let's look at the types the size of the businesses that responded to the survey. You can see it goes from very small, 24% just having under 10 employees up to larger firms with 500 plus. I feel like this is a pretty even distribution, so it should be a good representation of the responses that we got. And then Lauren, you have seen a change this year with owners versus non-owners. Do you want to speak to that?

Lauren White: Yeah, so last year we had an even 50, 50 split of respondents who were roofing business owners and non-roofing business owners. So this year we saw that shift to having more business owners respond, which I found really interesting.

Karen Edwards: Absolutely. And you'll see as we talk through the data, like Amanda said, from an owner's perspective, it's interesting because the answers might be slightly different than someone that's working in the company or helping out as a project manager or estimator. So that's why we put this panel together to bring in those different perspectives. But yeah. So one of the first things that we wanted to find out was how are you purchasing from your distributors? How are you purchasing the materials? And Amanda, when we were talking the other day about this, yours was like, old schools, not broke, don't fix it. You want to talk about that?

Amanda Veinott: Sure. So we are very tech driven. Everything we do is tech driven, but the one area where we haven't adopted the tech integrations between our CRM and our project management software is the integration with material ordering. So my production leader does all of our material ordering and he goes direct to our contact at each of our supply houses and our distributors to purchase our materials. He has a very tried and true method that's very simple and it works for us and it works for our partners. So not that we don't love the integrations and the technology capabilities that are out there now, and we'll probably see that at a higher adoption rate moving forward, but we're still sending email with all the materials, double check everything and we don't have a problem with getting things wrong.

Karen Edwards: That's good. Rachel, what do you guys do?

Rachel Hoover: Yeah, so I mean, we have our project managers, they are the ones that place the super material orders to keep it all kind of streamlined. So we don't really have our sales doing that for us. They get a lot of the upfront measurements, but it gets passed off to our project management team that does that. And with the admin support, we are always end of the line in terms of distribution going up here in Montana. So we rely pretty heavily on our distributors and those relationships. And I think over the years they've done a great job taking care of us and making sure that we can get what we need.

Karen Edwards: Okay. And I know there's some joking going on about the fax machines. Do you know last year's survey, zero, right? No fax.

Jon Gardner: It's back.

Karen Edwards: We thought no fax was gone.

Lauren White: It made a comeback.

Karen Edwards: It came back this year.

Lauren White: Apparently not.

Karen Edwards: Unbelievable. Yeah, unbelievable. We'd love to know what you guys do if you're in your business, if you are using third-party platforms. I know a lot of the distributors are integrated with certain CRMs. I know that there are apps out there that the distributors have that seem pretty handy to me, but you're the ones that are doing it every day and using it. And so we would love to hear from you what you're doing to order your materials. Okay, so now we're going to talk a little bit about social media. And I find this really interesting. We have had, now Lauren, you have last year's. I don't know if you have that pulled up in front of you, where I looked and these numbers really shifted down from last year. Facebook was really high last year, and this is high still, but it was even higher.

Lauren White: I know. Facebook was at 85% last year and LinkedIn was 65. So yeah, you're right. Everything, except for YouTube. YouTube held steady at 30%, but everything else shifted down in terms of those top three most used platforms. But then all the ones on the bottom, like TikTok through Threads, those all gained a lot of traction this year. The numbers jumped up, so I thought it was interesting. People are utilizing different platforms to get the word out and maybe just experimenting to see what works and what doesn't. I think the biggest one too was Twitter took quite, or X, excuse me, formerly Twitter, declined a little bit too as well.

Karen Edwards: Now it's interesting I think because we don't have a slide in this presentation on lead generation specifically, but we do have a page on it in the full Trends report. So we will drop that link in the chat for you guys to download the full report 'cause this is really just a highlight and social media is tied really closely into lead generation. And Amanda, you said something before we started today that I was like, "Wow, this is impressive." Tell us a little bit about how your business is using and leveraging social media for success.

Amanda Veinott: So we almost exclusively use Facebook for all of our social. Our Instagram platform is tied to automated posts from Facebook. So when I post to our Facebook page, it goes directly to our Instagram feed. Now my background is heavily on social media marketing and we don't do any paid marketing at this point in time. I'm looking into doing some paid marketing just because leads are way down year over year. But when it comes to social, I have sort of cracked the code on how to generate organic leads through organic social media.

So you can generate organic leads through paid channels when you start boosting posts and things like that. So maybe you're not necessarily doing paid advertising on Facebook, you might be boosting organic posts that you're making. That can help generate leads, but we don't even do that. So all of my content is direct through me.

I don't even have a marketing manager. So I am the company's marketing engine. And what I have found is that once I focus on one platform, we have better results. So if I try to move to posting on Twitter, TikTok, Pinterest, that just doesn't gain the traction as if I remained focused with Facebook. So why change it and why spread thin? So I like to go deep into one marketing channel rather than spread across many marketing channels. Also, the thing to keep in mind is you have to go where your customers are. So a majority of my customers are women who are between the ages of 35 and 65, and they're still heavily represented on Facebook because they generally are moms who are looking for information and Facebook is the number one source of information for that demographic.

Karen Edwards: Guilty, I'm on there. I know. It's so true. I was going to say you have to know where your people are, and that's why I think LinkedIn is so high because that really is more of if you're doing more commercial work, you're building owners, your facility managers and whatnot are probably going to have more of a presence on LinkedIn and in some of those user groups. Now, Rachel, I saw you were nodding your head. I'd like to hear your experience with social media at ACE.

Rachel Hoover: Yeah, I'd say probably pretty similar to what Amanda was saying. We focus primarily on Facebook because that really is where our demographic is and where they get their information. And I don't think we've found it being very successful as LeadGen. I mean, we are doing some paid that has generated some new leads, but we found it more being successful in brand awareness and just getting familiar, getting out and being those multiple touch points before they finally needed it. So we'll usually utilize that to get in front of people and then we'll do some more traditional forms of marketing to close the deal.

Karen Edwards: Okay. And Jon, you shared a little bit of interesting information before we got started. Could you talk about that?

Jon Gardner: Well, first of all, I love the fact that everything's tying in here with regard to actual what's going on out there between Amanda and Rachel because of the research that we do and insights that we recently received is exactly what we're talking about here. And specifically we have Gen Zs in that general area, they are using social media to take a look at different opportunities even when they have referrals in hand. And so the social media platform is driving a significant portion of contractors allegiance. And so yeah, it's a real thing.

And man, just it's hard to believe that social media has now become number one. And Amanda, the question I have for you based on this is what is your blended lead cost 'cause it's got to be some of the best. I think folks on today's podcast are like, "How do I get there?" Maybe for you too, Rachel.

Amanda Veinott: So it's funny that you say that. I don't really dive into it very much in terms of the blended lead cost because I don't really spend money on traditional advertising and marketing. So what we do spend money on are community give back programs, whether that's through donations, directly tied to customers' kids raising money for their schools or nonprofits that they support. I just made a $250 donation to one of our top customers' daughters who's raising money for her dance school for domestic violence. I will put a roof on a shed for an elderly person that can't afford it. So that might be $750 out of pocket between labor and materials. We often will highly discount services for military veterans because we are military led. My COO is a retired Green Beret, so we're very involved in the military community. I donated $2,500 last year to the Special Operations Transition Fund, which is where I actually found him. So I put my money where it's important. I don't just pay Google and other lead generation services. I'd rather take that money and reinvest it into our community.

Karen Edwards: I love hearing you say that because so many contractors are very generous and participate in programs and charitable giving and we encourage people to talk about it. We have that whole section on Reefer's Coffee Shop about Caught Doing Good for people that are giving back. And I know Owen's Corning is huge with giving back as is Beacon. They just announced their Beacon of Hope winners where they're giving the roofs away. So I love it. I love it. So talk about it, talk about it on social media, on Facebook, because your customers need to see that and hear that.

Amanda Veinott: And it works. It does. When people see that we're supporting the community, they want to support us.

Karen Edwards: The one thing I thought was interesting that's not on here, and maybe that's going to fall under other, but I'm not sure that we listed Nextdoor, but you had mentioned earlier, Amanda, that you get a lot of leads and referrals on Nextdoor.

Amanda Veinott: Yes. So this goes back into your question earlier, and I failed to mention this, but when we do marketing on social and when we get referrals, our referrals generally come through referrals in those groups. So on Facebook groups on the Nextdoor chats, people who we do business with or people who just know us from the community often are tagging us. And they're not just tagging the business, they're tagging me. So the number one thing that I can suggest to any business owner or even a sales leader who's watching this is your people need to be active on their own social media accounts on behalf of your business.

Your business accounts are going to not have the same algorithm traction that your personal pages will have. So we don't have a ton of followers and engagement on our business account, but I have thousands of people locally who follow me on my personal account. So I would definitely recommend putting time and energy into bolstering your personal business persona through your personal Facebook page. And then on Nextdoor you can do the same. So yes, you can have a business account on Nextdoor, but you should be more active with your personal account on Nextdoor.

Karen Edwards: Yes, very well said.

Jon Gardner: I think Karen, what-

Karen Edwards: Go ahead.

Jon Gardner: Just one little piece 'cause this is really all about where our leads are coming from and the piece that I just wanted to bring up is where the leads are coming from are super important. So the Facebook conversation we're having, it's the speed to the lead to that our contractors and our network members are asking for support and saying, "Hey, look, this is a big issue." And it is. One of the stats, and I just bring this up because where the leads are super important, but executing on a lead and getting to it immediately is really important. One of the stats that's out there is that your lead is going to depreciate by as much as 80% after the first minute. And so this is all about, Amanda, you talked about Tech Stack and making it work for you, from the lead gen side, we see this as a place where contractors can invest because you drive all the leads you want, but if you can't get to it quickly enough, it's evaporated. So those two tie hand in hand.

Karen Edwards: Very true and Rachel, we talked about this the other day with... You've got an incredible response time at your company?

Rachel Hoover: Yeah, I mean, there's a couple of things that we've utilized that I think have really helped with this. One of them being after Roofle we implemented the Roofle Pro on our website. And so using that as some of our advertising directing through social media to that page. And sometimes those are not the hottest leads, it's people just try and get more information, but getting that contact information and then contacting them immediately. And the way we've been able to do that, we actually have partnered with the company, it's called SMA Executive Services and they essentially are virtual assistants for us.

And so they've really helped with our admin and they have been contacting those leads, whether they come in through that Roofle Pro tool on our website or if they're coming in from any of our other channels, they're contacting them. And I think that, I just looked it up last night, our lead time is down to about 18 seconds. On average I think over the last month, I think our average was about 25 seconds, but we just got down this last week to 18 and that's been a game changer for us making sure, I mean, just like Jon said, of we're not contacting these people and getting back to them immediately, they're calling somebody else. So that's huge.

Jon Gardner: I love Rachel, Roofle, it's a great product. And we're going to get into this a little bit more Karen, but I just want to take the opportunity here is we're looking at ways in which that we can adapt and support and we have a strong partnership, exclusive relationship with Roofle where we have a custom version of what you use. And so we see this as an opportunity for our network members to have their cake and eat it too, which is get to lead really quick. But we've invested with Roofle to insert a bunch of really good content that homeowners can dive into to help them get educated, get excited, think about their own homes so that you could take care of all of this at one time. So it's a great educational process, Rachel, I think that Roofle brings to it in addition to the speed.

Rachel Hoover: Yeah, I agree.

Karen Edwards: And we live in that era of I want it now. I want instant information, I want it when I want it on my terms, so.

Jon Gardner: Where we see it going.

Karen Edwards: Fascinating. So we always ask every year because we love our trade associations as to what associations do you belong to? And this is when we changed a little bit, Lauren. Do you want to talk about what we used to ask and now how we rephrased that this year?

Lauren White: Yeah, it used to be more of a two part question of do you belong to a trade association? If yes, then which one? And that was another free response, and we just narrowed the focus a bit and we're like, "Let's just make it one question, which ones do you belong to?" And so we listed these options, of course, gave the option of other for whichever association isn't listed there and the none option for people who might not be involved in association yet. But NRCA, 56%, that's pretty big.

Jon Gardner: That's a solid number.

Lauren White: Yeah, I know.

Karen Edwards: It could be bigger.

Lauren White: It could be, yes, absolutely.

Karen Edwards: Yeah. And associations meaning we did say, okay, what are some of the larger, the national, the larger regional ones and some of the specialty ones that are up there and other, I know a lot of roofing contractors are members of Associated Builders and Contractors or the Associated General Contractors,

Amanda Veinott: National Women in Roofing.

Karen Edwards: National Women in Roofing. That's right. Montana Roofing Association. Shout out to Rachel. So yeah, and there are so many benefits and value that comes from being involved, not necessarily just a member, but being involved in the association. And we have done podcasts and webinars on that if you want to dive deeper. But the next slide, we're going to look at some top business issues. And a lot of these associations can help with some of these business issues as can your manufacturers. So let's take a look at that. I know this is small, I apologize, but there was a lot that we had on there. So Lauren, maybe can you speak to what this graph is telling us right now and how we broke this down?

Lauren White: Yeah, definitely. So this was another one that we turned into a multiple choice that again, had the option of other for people to fill in, but we wanted people to select their top three business issues from this list. And that's why it's so small, we had so many options. Based on the previous reports, these were the most top business issues that we got year after year, so that's why we selected these. And so this is all of the responses. So people had, it was capped at three and then we take those and we organize them into those five categories that you see in the bullet points. So labor, product, sales, production and business operations. Not all of them we're going to talk about today, but they are all in the Trends report. And so yeah, just seeing that breakdown of where people are having their issues, their day-to-day issues. And we're going to dive into a couple graphs too later on.

Karen Edwards: And Amanda, I'd love for you just to comment on the owner versus other, how that might differ.

Amanda Veinott: Sure. So what I was telling everybody before is my background in human resources started with data collection. So I used to run multinational employee engagement surveys. And one of the things that you have to consider with any data set is that at the top line, it's going to look very different than it will look when you start cutting it into different demographics. So I had mentioned that as an owner, all of these things are important. I see cashflow is on the bottom, but for me, that's my number one issue right now going into the winter in a down economy in a drought, cash is not my happy place right now. So a lot of the issues that you're seeing here would be weighted differently if the data set was broken up into different categories of people responding. And then if you even segregate that data further into owners of companies between one in seven, seven to 20, 20 to 50, all of us as owners have different issues depending on the size and the age of our company.

So yes, recruitment and retention is definitely a challenge, but for me, just because it sits at the top of this data set doesn't mean that it's my biggest challenge. If you're in growth mode, for example, your challenges are going to be different. So all of these things are important, and they're things that give me headaches throughout the month or the year or the week or the day, but I just wanted to call that out that once we start diving into this data set and break it into different groups of respondents, you're going to see different stories.

Karen Edwards: Thank you. Very well said. Okay. So yeah, that was cashflow, not more of an issue.

Amanda Veinott: Exactly [inaudible 00:31:02].

Karen Edwards: That's a good question.

Jon Gardner: To your point, Amanda, we do lots of insights and lots of research. We want to understand this that we could be as effective as we can with our network members. And the top three issues that came up consistently among all the subsets in terms of the research is talent, financials, which right here is on the bottom and labor. And so we look at those pieces, cashflow being on the bottom here, it was right up on the very top of our side. And the reason why I am honing on that part is we're seeing that the businesses become much more effective. So they're using the technology, they're driving their CRMs more and they're starting to tap into fine-tuning the businesses. They're looking for ways to get better at that.

And Amanda and Rachel, there was never a kit that you just grabbed and said, "Here's my small business kit, let's open it up and let's start going." And the fact of the matter is that most people get into the roofing business and they don't have this background. And so I don't think it's a surprise that they came up, but it is an indication that it's a product plus issue. Our contractors are saying, "Help us with the entire organization, the entire business." And those three came up as the most significant areas where we can help them.

Amanda Veinott: The other thing I want to say too, actually, Lauren, when was this run? When was this data collected? It was June through September?

Lauren White: May through September.

Amanda Veinott: Okay. May through September is when we're all making a lot of money.

Jon Gardner: Right.

Amanda Veinott: Okay. So that's probably why this data story is saying cashflow was not an issue because May through September, for me, cashflow was not an issue at all. We were printing money, it was great. And then September rolled around, the election was coming around, at least in the Northeast, we started seeing the impacts of the economic downturn finally, because we're sort of inoculated from the recessions when the rest of the country was feeling it, we weren't because we're flanked by major cities like Philadelphia and New York City. So we tend to see recession impacts last. It wasn't until September or early October that the Northeast started to feel the economic impact, the election impact and also the impact of the drought. So if you reran the survey right now, I bet you this would be very different.

Karen Edwards: Yeah.

Jon Gardner: Good point.

Karen Edwards: Yeah, I think people are answering the questions based on their current situation and what they're experiencing. So-

Amanda Veinott: [inaudible 00:33:43].

Karen Edwards: That's very well said. So the one issue that just keeps lingering right-

Jon Gardner: Here it is.

Karen Edwards: It's labor. And so we broke this down into the categories, recruitment, retention, training, hiring employees. I mean, I don't know how much more we can even say about this because it's a challenge for everybody.

Jon Gardner: I think the term labor, I think it's a little bit misleading here, as I'm sure Amanda and Rachel can kind of speak to this in terms of it's not just necessarily somebody that's putting the shingles on, it's everyone, it's sales, it's marketing and we see this on our side. So from a talent standpoint, sales, sales, sales is our number one where they're saying, Hey, we need more salespeople. But then it goes into the operational side of it and it goes into the production side. So I would say labor/talent is where we're seeing contractors saying, "Yes, we have some issues with this."

Karen Edwards: Yeah, definitely. Agreed. And operations, and Jon, you spoke to this just a little bit ago about how there's not a small business kit and here's how you go run your business. And I think as a manufacturer, you guys are putting together resources to help contractors, giving them a small business kit, if you will.

Jon Gardner: To our point before, financials, operations, these are the core elements of the business to keep it healthy. Again, Amanda and Rachel, you could speak to that from our standpoint, because we see this as a big issue. Our contractors saying Help us, but we've established great partnerships with experts and as one example that are helping our contractors. Ken Kelly, for example, is one of our Owens Corning University consultants that focuses a hundred percent on operations and on financials. Trent Cotney is another consultant here with Owens Corning. He focuses on regulations on taxes, and we have others that focus on leadership and culture. And so what we've never talked about here so far is product. And so this operational element of it, and we talk about taxes and growth and insurance, cash flow, we're tapping right into this. This ties right into where we see it. So yeah, big emphasis from Owens Corning on this part, both online, live and using some of our technology partners to help ignite some of the learnings that they get from our consultants as well.

Karen Edwards: Yeah, yeah, good stuff. It's good to see that the manufacturers and those that are stepping up to provide those resources to help contractors. I know Rachel, you're nodding your head to you get some support from your manufacturers when you need it.

Rachel Hoover: Absolutely. Yeah. And there's probably more we can be doing to utilize them better, but I think Owens Corning obviously comes top of mind with the Owens Corning University. We utilize that a lot in our training of our teams, especially sales. Sales and production really. But I mean, I'm on the marketing side, so I mean from our local reps, I get a lot of support, sometimes it's co-Ed, sometimes it's just actual marketing materials that we can include in our handoffs to homeowners. And so I think that there's a lot there. On our sales presentation side, we use the platform Engage and Owens Corning has a lot of tools built into that already too, which is really nice. So you can have plug-in slides on certain materials or products, and that's been really helpful as well.

Karen Edwards: Excellent. So yeah, if you're not talking to your manufacturers, please do. Because no matter who your preferred manufacturer is, they all have resources out there that can really help. Okay, so we mentioned this previously as well, it's not just field labor, but where are you experiencing labor shortage, if at all? I find it interesting that 25% said no shortage here.

Jon Gardner: Where's that? Because we don't want to go there.

Karen Edwards: Right.

Amanda Veinott: Yes. So one of the things that we discussed on our prep call for this was that it's not necessarily a shortage of bodies. There's lots of people that are looking for work. There's a shortage of the right people, and that is what I struggle with, period. I struggle with finding the right people because culturally we have a very unique business. It's not your traditional construction company. We say that we bring a white collar flare to a blue collar industry, and it's true because my background's in corporate America and in a completely different retail environment before I got here.

So I interact with customers in a much more hospitality driven way, in a much more white collar experience way. And traditionally, some people who look for jobs in construction companies don't necessarily fit in with that culture for whatever reason. So when I'm looking to hire, I'm looking for people that are going to be good culture fits, and I would rather train the right culture fit than try to hire somebody that has the experience and then have to retrain them on how to fit with our company. So that's really the hard part for me is because it takes a lot of time out of my day to train people who don't have the experience, but I'd rather do that because it's a better fit in the long-term.

Karen Edwards: Exactly, exactly. Rachel, what are you guys experiencing?

Rachel Hoover: Yeah, I mean, I would agree with Amanda there. There's always people that want to work, but finding the right people and also, I mean in skilled labor, I think that we notice it more. I mean, we're always looking for skilled project managers and superintendents, people who maybe have some skilled labor and we train on a lot of that as well. But people who are good people managers and people who also are good fits in the culture. I agree with all of that. I mean, ultimately we are in the people business. I mean, we do roofs, but we're in the people business. And so I think when we nail that, then we'll have a really good business model. And all of that trickles down to the customer experience. And ultimately, if you don't have a good customer experience, your business isn't going to be doing very well.

Jon Gardner: It's interesting-

Rachel Hoover: So that's a big hard point.

Jon Gardner: Interesting with many of you were talking about culture and culture and leadership are synonymous in a way where you're building those. And we see this too as an area. And so we have two areas where we focus in on this. One is with our consultant, Sue Hawks, where we have culture leadership is just the foundation of what she teaches. But Amanda, to your point, that leveling up your employees so that you can scale, so that they do have the bandwidth to be able to take on new roles, we've established a partnership with Cornell University where we're providing next level resourcing to folks like Amanda, folks like Rachel and anybody in the organization to tap into ways in which they can expand their capabilities. So you got longevity with the employee, you're scaling the employee, and you're providing them resourcing that they can use so that they can get to the place that you want them to be. So that leadership culture and scaling is a big, big part of growth, obviously and where we're focusing.

Karen Edwards: Yeah, and there's a comment that many manufacturers offer free training on their products and that it's shocking how few people take advantage of the resources that are out there. As we said, if you're not talking to your manufacturers about how they can help your business in anything including culture and leadership, then you're missing out on quite a bit. So let's keep talking and look at what recruiting methods are working for you. And referrals is right up there, pretty high. Amanda, what's working for you?

Amanda Veinott: Definitely referrals. So our top people come to us. So the people who are currently really good fits in the company found us. I didn't find them. So outbound searching is not the best fit for us. And inbound, "Hey, I am a good fit for you. Can you take a look at my resume" has been working really well. So I chalked that up to referrals because they found out about us somehow. They found out that I was looking and they were proactive and sent over their resume. So to me, I categorize that in the referral category. I have tried recruiters. That didn't work well, that just wasted my time and it was really expensive. Advertising, I already told you I don't really do that. Online job boards, that also was a waste of my time. They just weren't a good fit. The other thing-

Jon Gardner: What about the Military?

Amanda Veinott: Yeah, so that was a referral too, because that's a really long story. It was a miracle, honestly, how that happened. I haven't been able to recreate that, but that was somebody that said, "Hey, take a look at this guy's resume." I looked at it for five seconds and I offered him a job. So yeah, that was interesting. I wish I could do that for everybody.

Karen Edwards: Yeah. Yeah. Rachel, what are you guys seeing?

Rachel Hoover: A lot of it also, we're doing, we're pushing with referrals. I'd say if we have great employees. We first will reach out to them and be like, "Who do you know that would be a good fit in this culture?" People that we've already nailed it, that they're doing great, a lot of times they may have somebody in mind. We also, similar to Amanda, we have quite a few veterans in active military that are employed by us as well. And so a lot of times when you find these personalities that are just such a good fit in your organization and they're incredibly hard workers. I mean, a lot of times they'll have a community of people that they know that might also be a good fit. So we try to tap our network first. But otherwise, I mean, we do Indeed. I'd say right now that's probably been the most successful in finding people outside of our current network. But I mean, there have been times, Monster, Credit lists. We've been successful with them. But I mean, it adds and flows.

Karen Edwards: Yeah, for sure.

Amanda Veinott: The other thing that's been really helpful is my relationships with our suppliers and our manufacturing partners. So suppliers have been really helpful to find people. So people who are W2s inside my company, that's where some of these referrals have come from. And then my manufacturing partners have been really helpful to find crews because they want their products installed properly. If the products are installed properly, we can sell better. Therefore, Jon's going to be happy in the long run because we're selling more product.

Jon Gardner: Indeed.

Amanda Veinott: So it creates this reciprocal relationship. So if they can help us find the installation crews and they can say, "Hey, we've seen hundreds of these jobs installed technically accurately," then I want to talk to that installation crew. I don't want to talk to the crew that comes and knocks on my door and says, "I'm hurting for work." Because if they're hurting for work, they're probably not really that good.

Jon Gardner: Not your crew.

Amanda Veinott: Yeah, right. Exactly.

Jon Gardner: Yeah. Well, what about as we look at this, CTEs, community colleges, the military,

Karen Edwards: Schools.

Jon Gardner: These are areas that we're looking at and tapping into as resourcing as well. Military, I think you can't go wrong and CTEs bringing people into the industry that otherwise would just look at it and say, "No, I'm going to move on," as well as community colleges. So, yeah, bringing people into the industry and finding the right fit.

Karen Edwards: We've had success at Roofers Coffee Shop with interns. We will bring someone in, start them in an internship role and then we see where their strengths are and what their skills are and where they might be a good fit. And we've hired several folks that started with us as interns, so that's always something to keep in mind as well.

Jon Gardner: Yep.

Karen Edwards: All right. So we have so much to talk about, right? I'm going to try to make sure we squeeze all of this in. Just real quickly on what retention methods work. And the top one is having enough work to keep your crews and your people busy. But it's interesting, I think too, that work environment and that speaks a lot to culture, which Amanda you were talking about and then training. Are you offering training to your people and are you taking advantage of the training the manufacturers are offering? So culture was down here at 36%, but I think it ties into work environment. So that number to me is the biggest one.

Okay, now we're going to move on to our next topic, which was a new one for this year. And that was, do you use subcontracting crews? I found it really interesting that if you look in the bottom left corner, really tiny there, it tells you the number of people that responded to this question and that was 210. That's everybody, right? They all said yes or no, more than half of the people did. And then when we asked the follow-up question, which was the number of crews that you use, one to three, four to eight or more than nine, only 120 people gave us that answer. So people don't want to say, so let's talk about are you using subcontractor crews and is that a good thing or a bad thing?

Amanda Veinott: For us in New Jersey, predominantly, I'd say over 95% of roofing contractors use subcontracted labor. And the ones who say they don't to their homeowners are lying. I had a conversation with somebody the other day who runs a very similar business, but about a hundred miles south of here in New Jersey and he was like, "Oh yeah, all of our crews are our crews." And I said, "Are they really?" And he said, "No, they're 1099s, but we tell our homeowners that they're our crews." And I said, "Well, from a government perspective, if you tell that and you give them uniforms and you give them all the other things that make them a W-2 in the eyes of the government, you are misclassifying your labor." So when homeowners ask me if we have subcontracted crews, I say, "Absolutely, but we're not picking them up as day laborers. These are our primary crews who we have used since day one, and we keep them gainfully employed."

Now, there have been regulatory changes on the 1099 versus W-2 side, which hit us like a ton of bricks earlier this year. But I haven't seen anything really come to fruition about that. So now the government's saying that if you employ a 1099 labor crew for more than 90% of their revenue, they have to be classified as a W-2. So as an owner of our company or as an owner in the industry, we have to pay attention to that. So if I'm employing my primary crew, 91% of the time that he's generating revenue, I really should be classifying them as W-2s. Now if we're getting real here, and I hope that we can all have this on this conversation, I would love to bring my crew in as W-2, but I can't employ them all legally. So that creates a whole other issue. And I would love to raise this at the manufacturer level, Jon, because I know you guys have lobbyists. How can the industry help to create legal working environments for our crews so that we can actually implement W-two employment engagements with our crews?

Jon Gardner: Yeah, well said. And it's significant this year. To your point, Amanda, government reevaluated that. So they haven't really, I haven't seen anything that's popped up from this new, but it's just a matter of time. For folks that are interested in learning more about this, Google Trent Cotney or look for him. If you're part of our network, look on OC Connect and look for Trent Cotney's piece that we have there. He's a wealth of knowledge on this, and he'd be more than happy to share more insight on it 'cause it's a real thing, to your point, Amanda. Nobody wants to get stuck 'cause there's significant penalties for misclassification, and who knows when that might get hit, but it's a real thing.
But Amanda, your point is well taken.

Amanda Veinott: And the other thing too is if we employed a different labor force as our installation, at least in New Jersey, our prices would have to increase at least 25%. And there is no way that a homeowner is going to pay 25% more for their roof in a saturated environment. It's true. I mean, we're already operating with razor thin margins, which is why the cash flow issue is a thing for us.

Karen Edwards: Yeah, wow. Let's pay attention to this issue and we could probably spend an entire hour talking about it.

Jon Gardner: No, no doubt. No doubt.

Karen Edwards: So I am going to just quickly show the training needs. I mean, we've talked about it, we've talked about the resources out there for training and this stays the same consistent year to year. When I was looking back at past years, it's almost always projects installation like materials, new hires, technology and certifications that are up there. And technology, we've touched on that a lot. And Jon, I know Owens Corning has done a great job of putting together the tech stack that gives that well-rounded look and helps people to run their businesses. I don't know if you want to just touch on that real quickly.

Jon Gardner: Yeah, for sure. To your point, we look at this and say, okay, what are the biggest issues that contractors are having? New product installation is definitely up there, but who are they asking that for? It's probably the installer or somebody that's going to be putting it on. But bigger picture to our conversation we've had today, Karen, it's really about all of the aspects of the business. So our tech stack and go on OC.com and look for a tech stack, it's a resource for our contractors and anybody really to look at what best in class technology stack looks like so that you can activate all of that, integrate all of that and crank out a business like Amanda was talking about over the last two years or Rachel's talking about. So tech stack and integrating that tech stack the right way is probably the most critical part. Amanda and Rachel would speak to that. Look at that resource and to provide you additional training and get you in a better place.

Karen Edwards: Yeah, I'm going to keep going 'cause we're getting short on time here and I think this next and we do have a request to talk about what we think for what 2025 is going to bring. So start thinking about that and we'll wrap up with that. But I thought it was really interesting, the sustainable question this year that we've seen this change. If you look at that bottom bar of 22%, they're not talking about it. They're not offering it. And Amanda, you had said some things the other day that people just don't care, seem to care anymore.

Amanda Veinott: It was a conversation I was having with people frequently between 2020 and 2022, and then I started seeing the drop-off in '23 and I might've had one conversation about sustainable products or sustainable practices this year. I believe that's directly tied to the fact that sustainability comes with a higher price tag and consumers are already struggling to pay for non-sustainable products. So I think that once the economy picks back up, I think we're going to see a direct correlation between sustainability.

Karen Edwards: It'll be interesting to look at this next year and see if the numbers reflect a change in that. Rachel, are you experiencing the same thing?

Rachel Hoover: Yeah, pretty similar. I actually connected with our team after the last call that we had, and it doesn't sound like it's a question at all in our market. And I think that had maybe mentioned, I mean, Montana, we just really don't have the infrastructure for it currently. And because it hasn't really been a big push. I guess the last job that we had that it was a requirement was in Gardner Montana, which is one of the gateway towns to Yellowstone and we had to haul material all the way to Rapid City with diesel trucks, which I mean, when you start looking at that, it just doesn't make any sense at all. And so maybe it will be a thing down the line, but in our market it really hasn't been.

Karen Edwards: Okay. We have just a couple of minutes left and I want to make sure we talk about what we think is coming for 2025. Before you answer though, I do want to say the NRCA is having a webinar next Tuesday, I think it is on the 19th, where they're going to talk about what's to come and with the election and the new administration, what we can expect. So I would recommend that you go to their website and get information on that because I think they're going to have a lot of more insight than we will, because I don't know, what do you guys think, Jon? I mean, as a large manufacturer, have you guys said, all right, we think 2025 things are looking up, the economy's going to pick up? Or are we still kind of cautious?

Jon Gardner: I think optimism for sure. I would say in that general trend, the demand is still there and we don't see any significant drop off to that demand. So I mean, there's going to be areas of the country that are going to shift left or right, but generally speaking, we're going to move into 2025 with a pretty decent amount of demand.

Karen Edwards: Amanda.

Amanda Veinott: So I think Jon's in a different position than we are because we don't do any insurance work in New Jersey unless we get hit by a storm. So a lot of the asphalt manufacturing is being driven by the insane hurricanes and tornadoes that the country has experienced. So I don't know very much about the stats, but I have heard that you guys are producing more shingles than you expected to and that was even higher than what was projected year over year. So I think that the industry overall is going to have a boom for the next 12 to 24 months simply because of the weather patterns.

That said, New Jersey and a lot of the Northeast is in a severe drought. We have not seen a drought like this in I believe, 50 to 75 years. So when your roof doesn't leak, you don't call. So what we're noticing in 2025 or going into 2025 is diversification of services. So in order for us to maintain our cash flow, we have to diversify our services into non-necessity driven purchases. So these are going to be things that people want to do not need to do. So for us, we're getting more into decking and siding when I swore I would not get into siding, but I need to keep my lights on. So we're going to be doing things that are more aesthetic driven rather than leak or necessity driven.

Karen Edwards: Okay.

Jon Gardner: I see that same trend.

Karen Edwards: Yeah. Yeah. Rachel, what about in your part of the country. What are you looking at for 2025?

Rachel Hoover: I think Montana is in a unique position where I think that we're usually one of the last markets to start seeing the effects of new regulations, tax changes, things like that. So we get to see what happens in other markets and how other people are adjusting to it, which puts us in a pretty good position. But I think just as things are getting more expensive, I think that we are anticipating that we'll probably see a rise in financing, hopefully once the interest rates come down a little bit. I mean, households have less discretionary income, but also roofing is not necessarily super discretionary. And definitely in our market, when you needed new roof, you move new roof. And so I think we are anticipating probably financing will be a bit more going to the new year.

Jon Gardner: Excellent. Real quick, the housing glut. There's a lack of housing in the United States today, and that combined with high interest rates, people are staying in their homes and they are continuing to invest. So we're in a cycle here. Like you said, Amanda, there's a drought and there's some regional issues, but big picture along with the age of homes, you'll continue to see roofing being up there in terms of exteriors and demand.

Karen Edwards: All right, well thank you everybody. Very well said. I want to extend a thank you to Beacon, our sponsor. They made all of this possible. And then just give a sneak peek into our next coffee conversation. Next week we're going to be talking about the acquisition frenzy that's going on in the industry. You know what's happening? Everybody's talking about it. I talked to contractors, they're like, "I got my first call from a P.E. group. I don't know what to do."

Amanda Veinott: I feel like you made it at that point.

Karen Edwards: Yeah, right, right. Yeah. So we've got an excellent panel together That's going to be here next Thursday to talk about this, and I want to thank everybody out there for watching this today. As always, it's recorded. This will be on our website within usually one to two days, so feel free to rewatch, to share if there's someone that you think would benefit from listening to this conversation today. Thank you all again, and we hope to see you on a future episode of Coffee Conversations. Thank you, panelists. It was a pleasure to have you today.

Amanda Veinott: Thanks, Karen.

Rachel Hoover: Thank you.

Outro: Thank you. All right. Bye everyone. Bye.