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What Is the Current State of the HVAC Industry?

Oct. 1, 2021
Positive and negative forces are at work internally and externally. Workers are scarce. Commoditization of products is not productive. Formulate your assessment of the state of the industry as it pertains to you and your role in it.

Never before has our industry been in the state it’s in today. Many conditions are shifting so fast that we risk making uninformed decisions if we don’t keep up with all the changes. The purpose of this article is to encourage you to formulate your assessment of the state of the industry as it pertains to you and your role in it.

Let’s look at several changing industry conditions and think about how they impact your decision-making. Basing your decisions on the state of the industry several years ago will likely take you down the wrong path.

A Dwindling Workforce

Shortages in our workforce are one of the most significant factors affecting our industry today. A migration away from employers who treat their workforce as laborers and toward employers eager to provide career advancement has begun. Today’s technicians seek to become HVAC professionals.

Employers who understand this trend have their pick of the best talent. They promise and deliver opportunities featuring better work conditions, flexible hours, sustained training, career advancement, increasing pay, and added benefits.

On the other hand, employers who believe that employees have no other option than to work for them may soon have empty trucks sitting in the parking lot and vacant chairs around the office.

This transformation has turned the best employers into magnets for qualified workers. Unchanging employers are being caught flat-footed, unable to attract or keep qualified workers.

Many qualified and professional HVAC technicians are building stronger careers, advancing faster, and earning more than many college graduates (Without the debt!).

Reality check: Many qualified and professional HVAC technicians are building stronger careers, advancing faster, and earning more than many college graduates (Without the debt!).

Price Increases 

Now is the time for the HVAC industry to recapture opportunities we let slip through our fingers decades ago. Once profitable and thriving craftsmen, we abandoned our craft and spiraled downward from building custom heating and cooling systems to replacing equipment offered as a low-priced commodity.  

When my family purchased an HVAC contracting company years ago, I found an old record book with job information from 35 years earlier. It documented that the price the company charged more than three decades before was twice what we were being paid at the time.

This was a call to action to a careful examination of our direction as a company. We began to understand we had succumbed to becoming peddlers of furnaces and condensing units, selling for the lowest price.

Once profitable and thriving craftsmen, we abandoned our craft and spiraled downward from building custom heating and cooling systems to replacing equipment offered as a low-priced commodity.  

It was clear our company and the industry had stumbled into a commodity mentality and stopped delivering custom products at custom prices. Conditions are ripe for our industry to recapture the worth and status we once enjoyed and be paid accordingly.

More About Higher Rates and Profits

There is more to charging higher rates and increasing profits than just raising wages and fattening earnings. To sustain this trend, laws of economics require added value to accompany higher prices. Inflation is hollow and unrewarding; it acts as a thief. Should you choose to charge more and give less, your customers will feel they have been taken advantage of.

Beware! If higher prices are not accompanied by an increase in value to your customers, your career and company prosperity will be short-lived. You may be able to price-gouge for a short season, but a quick-buck company culture will drive away consumers for years to come.

Should you choose to charge more and give less, your customers will feel they have been taken advantage of.

Are there marketing budgets large enough to repair a company’s damaged reputation? 

Current conditions position our industry to deliver again a custom product, installed HVAC systems documented to be far superior to the level the industry now offers.

The time is right to give value to your customers beyond the dollars you charge.   

Customers Influence the State of Our Industry

Today’s customers require more of a customer experience than simply approving the price on your proposal.

Unfortunately, many companies continue to treat their customers as a captive audience without options. They use the highly technical nature of our industry as a smokescreen to take advantage of their customers and deliver an inferior product. 

Two industry leaders recently summarized this reality by quoting a consumer, “If I’m going to get rotten results from an HVAC contractor, I might as well get rotten results at the lowest price.”

We all laughed, but deep inside, we knew the principle was valid.

Consumers want to make informed decisions based on their knowledge. The most successful salespeople understand their role is to educate customers about their HVAC systems, and education precedes the sale.

A white glove customer experience begins on your website, is confirmed with their first conversation with the office, and continues through and beyond the completion of the job. Customers should see and feel a culture of genuine interest and trust your ability to deliver what they want and need.  

What is the Current State of Our Industry?

Today the state of the HVAC Industry is a state of change. Pressing on you today are the effects of a dwindling workforce, price increases, scarcity, and customers searching for a premium white glove buying experience. 

At the same time, as you work to make effective long-term changes to respond, you’re up against competitors in the industry, taking a different road, grabbing the quick buck, and running with it.  

These changing conditions create a vacuum to be filled by those of you willing to satisfy the expectations of a rising workforce. This will require you to increase prices and provide equal or greater value services. To thrive, you’ll find a way to serve your customers a world-class experience. 

A piece of cake, right? The state of our industry requires more change, creativity, and growth than ever before. One thing is for sure; the more current your view is of the industry and your company, the greater your chance of success and prosperity.  

Rob “Doc” Falke serves the industry as president of National Comfort Institute, Inc., an HVAC-based training company and membership organization. You can contact Doc at ncilink.com/ContactMe or call him at 800-633-7058. Go to NCI’s website at nationalcomfortinstitute.com for free information, articles, downloads, and current training opportunities

About the Author

Rob 'Doc' Falke | President

Rob “Doc” Falke serves the industry as president of National Comfort Institute an HVAC-based training company and membership organization. If you're an HVAC contractor or technician  interested in a building pressure measurement procedure, contact Doc at [email protected]  or call him at 800-633-7058. Go to NCI’s website at NationalComfortInstitute.com for free information, articles and downloads.