Contractor Insights: Hughes Environmental Engineering

Aug. 1, 2008
You won’t find “gloom and doom”in any dictionary on the shelves at Hughes Environmental Engineering, Inc., Montvale, NJ. Let the economic cycles do what they will this commercial and industrial HVACR contractor continues to move forward, and gets better every day.
Frank Hughes: service an annuity.
Brian Hughes: company has a technician ‘waiting list.’

You won’t find “gloom and doom” in any dictionary on the shelves at Hughes Environmental Engineering, Inc., Montvale, NJ. Let the economic cycles do what they will — this commercial and industrial HVACR contractor continues to move forward, and gets better every day. Its built-in recession fighters include a full plate of commercial service contracts; a controls technology expertise that appeals to energyconscious customers, and a recruiting strategy that ensures it hires only the best technicians it can find.

Current president Frank Hughes’s father, Richard L. Hughes, and his grandfather, Frank W. Hughes founded the company in 1935. Today, Frank Hughes and his son, vice president Brian Hughes, keep the company going and growing strong with the help of a quality administrative and sales support team, and a staff of 50 top-notch technicians. Employees are well versed on the company’s history, methods, and reputation for excellence, and nobody likes to lose a customer.

Technical Expertise Sets Company Apart
Hughes Environmental Engineering’s “recession-proof” customer base is in owner-occupied facilities, including offices, warehouses, manufacturers, cold storage warehouses, food processors, and other buildings with unique and interesting HVACR requirements. Those needs allow the Hughes team plenty of room to flex their innovative and technological muscles.

“We differentiate ourselves by our technical depth, says Brian Hughes. “In 2006 we reviewed the history of all of our new service customers. We found that the number one reason they were looking for a new service provider was due to dissatisfaction with their previous contractors.

“Our size is another advantage. For example, in 2007, we landed a large service contract for a telecommunications company with 101 satellite locations. The customer told us that even though we weren’t the low bidder, we were the only company that could meet its specifications and cover all of their locations.”

The Hughes company is very adept at leveraging installation projects into service contracts.

“We look for customers who are dependent on high quality service, whether it’s a production need or precise air conditions,” Frank Hughes explains. “We make a point of soliciting service, and expect every new job to become a service client for the next 20 years.”

Hughes says service builds and strengthens the bridge to strong partnerships. “Service is what retains the customer. It’s not something you can count on to expand your business 20% each year. In fact, the bigger you get, the lower your growth rate will be. At the end of the day, the service business is an annuity.”

The team at Hughes has discovered great value in promoting service and maintenance as it relates to energy conservation and equipment longevity.

“That’s probably the major difference in customers today; people are now investing for the short term,” Hughes says. “Those changes include many improvements in controls and what controls mean to energy efficiency. A good control system will absolutely save money. You don’t even have to talk about dollars, because the cost continues to rise. It makes more sense to talk about kWh savings, rescheduling of run times, and being aware of energy demands. It also means you’re now their partner. You’ve installed the control system, and are responsible for it.”

Hughes Environmental Engineering imparts such a high degree of confidence in its customers that they have no trouble taking the most efficient course of action.

“If you have a solid reputation, you can help them see they have a 20-year-old piece of equipment that needs to be replaced, with only a five-year payback, thanks to the $5,000 per year energy savings that can be realized,” Frank Hughes explains.

Brian Hughes joined Hughes Environmental Engineering in 1994, after working as a logistics manager for Ryder Trucking Company. In 2000 he was put in charge of sales. Right out of the gate he hired additional sales reps and concentrated on improving the company’s recruiting methods and service department, with great results.

To improve the tracking of the available talent in its region, he began compiling a database of just about every individual within the company’s geographic market who had some experience or training in HVACR. The more names he had, the better, because of the finite amount of technical talent in this, or any trade.

“Our database included just about everyone — from a 19 year-old student halfway through technical school, to a 25-year veteran who had worked for many contractors,” Brian Hughes says.

That faithful prospecting has reaped a harvest of more than 3,000 resumes currently on file. When its time to do more extensive hiring, he institutes a recruiting effort that involves reviewing many of those resumes, and personal invitations to some of the best in the bunch.

Bill Glynn, executive vice president in charge of the day-to-day operations says the Hughes organization is mindful of the costs associated with replacing a lost customer. It’s that awareness that has helped it maintain many loyal clients.

“Our dedication often wins a customer for us,” Glynn says. “There are standards that say seven years is about average amount of time a company will keep a customer. That’s on the low side. However, we have customers who have been with us for 50 years. We’re an honest company, and we expect to put in an honest day’s work.”

Slow and Steady Winning the Race
Hughes’s projects are split 50/50 between service and Design/Build projects. Over the last 10 years, gross sales have grown 8% each year (less 3% for inflation). It’s been an organic, steady growth, with few “home runs,” but many big hits. And all projects, large and small, receive careful attention. On the morning Contracting Business visited the Hughes offices, the team that was participating in a weekly tracking meeting was reviewing about 80 projects in various stages of development.

“We’ve probably had three jobs over $1 million in our entire history, and our largest single customer might make up 2% of our business,” Brian Hughes says.

“We see commercial and refrigeration retrofit, Design/Build, and service as continuing to be our best growth segments. New construction isn’t a viable alternative because so much of the area is built up.”

Hughes Environmental Engineering is ready for change, thanks to its 73-year history of handling everything that’s come before, and a reputation that ensures its long-term growth.

About the Author

Terry McIver | Content Director - CB

A career publishing professional, Terence 'Terry' McIver has served three diverse industry publications in varying degrees of responsibility since 1987, and worked in marketing communications for a major U.S. corporation.He joined the staff of Contracting Business magazine in April 2005.

As director of content for Contracting Business, he produces daily content and feature articles for CB's 38,000 print subscribers and many more Internet visitors. He has written hundreds, if not two or three, pieces of news, features and contractor profile articles for CB's audience of quality HVACR contractors. He can also be found covering HVACR industry events or visiting with manufacturers and contractors. He also has significant experience in trade show planning.