In January, 2018, the Floor Covering Leadership Council (FCLC) commissioned an independent research firm to conduct a multi-phase study to quantify the scope and severity of the lack of installation professionals on the flooring industry’s sustainability and growth. A Chicago-based research firm, The Blackstone Group Inc., was contracted to conduct the research, whose quantitative components focused on businesses that purchased workers’ services by engaging floor covering installers as direct employees and/or subcontractors in 2017. A total of 334 executives, representing floor covering contractors, retailers, workrooms, and installation businesses across 45 of the 50 states, participated.
Part 4 of this 5 Part Series addresses the gaps in perception around the industry’s installation labor shortage. The quantitative research’s findings regarding installation labor shortages included these highlights:
- Perceptions that the floor covering industry was experiencing workforce shortages were widespread.
- Businesses in non-union markets more often reported a serious shortage of directly employed floor covering installation workers than did those in union markets.
- Businesses with a mostly residential revenue mix more often perceived a serious shortage of directly employed workers than did ones that had primarily non-residential revenue.
- Compared to the largest businesses, those whose 2017 floor covering revenues were less than $20 million more often signaled a serious shortage of directly employed workers.
Highlights of the quantitative research’s findings regarding wage rates, subcontractor’s costs and installer training included the following:
- Despite perceptions that direct employees were in short supply, most of the participants who planned to hire in 2018 did not plan to raise the recruiting wage for entry-level workers.
- The 2017 median starting wage of $14.00 per hour was unchanged for 2018.
- While documenting no overall increase in the starting wage for direct employees, the research found that the costs for subcontracted installer’s services rose by an average of 3.9% from 2017 to 2018.
- The research also found an association between a shortage of subcontractors and cost increases – one of the indicators used in determining if a shortage truly exists.
- Compared to contractors and installation businesses, retailers were less likely to report that all of their direct employed installers had received formal training in 2017.
- The smallest businesses, those with annual revenues under $1 million, were the ones most likely to have direct employees and subcontractors who received no formal training in 2017.
The FCLC research initiative had several overarching objectives:
- Estimate the size of the gaps between the supply of and the demand for floor covering installers, now and in five to 10 years.
- Quantify the financial impact of the installer shortage up the supply chain.
- Identify key drivers of the installer shortage as well as potential solutions.
Part 5, the final part in this series, addresses the study’s findings that suggest not only that the labor shortage is real, but that its financial impacts up the flooring supply chain are significantly greater than previously understood.
Associations included in the FCLC coalition and others donated the funds needed to accomplish the 2018 research. Ongoing industry fundraising will be coordinated to generate the funding needed for the initiative’s future work.
Presentations detailing the FCLC research findings will take place on January 24, 2019 at The International Surface Event (TISE) in Las Vegas and on February 28 at Domotex USA in Atlanta.
The FCLC was established in 2015 as a coalition of flooring industry trade associations committed to identifying issues and developing solutions to the industry’s most pressing challenges. Currently, eleven flooring associations support the FCLC: American Floorcovering Alliance, Inc. (AFA), International Certified Flooring Installers Associations Inc. (CFI), Ceramic Tile Distributors Association (CTDA), Floor Covering Installation Contractors Association (FCICA), Multilayer Flooring Association (MFA), Natural Stone Institute (NSI), North American Association of Floor Covering Distributors (NAFCD), North American Laminate Flooring Association (NALFA), National Institute of Certified Floorcoverings Inspectors (NICFI), National Tile Contractors Association (NTCA), World Floor Covering Association (WFCA). For more information, visit www.fclcouncil.org.