3 Obstacles Facing Electrical Contractors in 2020
By Anthony Masotto
National Sales Manager
One-Pull Wire and Cable Solutions
Throughout my travels in the United States as a national sales manager at a bundled cable manufacturer, I’ve talked with many electrical contractors and partnered with them to meet their bundled wire needs. I regularly receive requests from electrical contractors working in a variety of projects including data centers, multi-conductor homeruns in sports stadiums, wire bundles for acreages of solar farms, as well as cable bundles manufactured for airport automated conveyor belts systems (to name a few).
During that time, I’ve listened to the challenges that they encounter. Though electrical contractors deal with unique problems depending on the scale of the project and specific industry (such as commercial high rises, water treatment facilities, fire alarm systems, etc…), their main challenges are similar across construction projects.
Here are the 3 biggest obstacles I’ve been hearing from electrical contractors on the job site that will continue to persist in 2020.
1) Being Competitive on Job Bids
For much of the electrical construction industry, profit margins are narrow. The average margin for general contractors is between 1.4% and 2.4% whereas for subcontractors it is slightly higher at between 2.2% and 3.5%.
Electrical contractors frequently ask “how do I stay competitive on job bids while making sure we don’t undercut our margins?”
Fortunately, there are solutions out there to solve this critical business problem. In fact, our company’s mission is to help electrical contractors increase productivity and save time on every installation with our bundled cable products. Our custom cable bundles are designed to enhance and speed up installations on the job site so that electrical contractors can get the job done and then move onto the next one quickly and efficiently.
Additionally, technology is also bringing about new solutions that are simplifying life for electrical contractors. There is estimation software to facilitate better forecasting and getting the job assignment completed under budget. Collaborative communication tools like Microsoft Teams and Slack speed up communication, critical for when a project manager sees a problem and needs to communicate with other members of the team that either aren’t on the job site or aren’t right around the corner.
2) The Challenges of Staying on Schedule
In general, the electrical construction industry is plagued with scheduling issues and conflicts on construction projects. The spread of BIM (building information modeling) software has helped contractors and subcontractors to align their plans at the start of construction to help avoid oversights, but scheduling problems continue to hurt the bottom line for electrical contractors.
Given the thin profit margins discussed above, it is critical for electrical contractors that they stay on schedule (ideally under!). Therefore when a job goes over schedule, not only do electrical contractors’ slim margins already take a hit on the task at hand, they are prevented from moving onto the next job opportunity.
3) Shortage of Qualified Electricians
A labor shortage of trained electricians will continue to impact large and small shop electrical construction companies. Their ability to grow is contingent on their ability to recruit.
Studies have shown that the average age of electrical contractors has been steadily increasing. In 2016, the average age was 57.3. In 2018, it increased to 58.2.
There’s no easy solution to fix the electrician labor short fall. However, in addition to vocational schools boosting their recruitment efforts, electrical contractors could explore ways to increase their recruitment activities on college campuses.
Especially because of the soaring costs and interests rates on student loans, recent graduates are looking for jobs that pay good salaries soon after graduation. Electrical contracting work pays well and this could be turned into a recruiting pitch for electrical contractors.
These are just a few of the prominent concerns I regularly hear about. Though they won’t be solved overnight, solutions are being developed. I’m excited to see how they will be adopted in the years ahead.