By Reginald Tucker
New Orleans—Rising contractor membership numbers, a steady uptick in vendor partners, a respectable surge in buying power and, more importantly, a growing influence on the specification of a variety of commercial flooring products and services. These are some of the accomplishments Fuse Alliance leadership shared with attendees at the group’s recent annual conference here earlier this month.
“This is the biggest group we’ve ever had,” said Geoff Gordon, executive director of Fuse Alliance, a member-owned organization of professional commercial flooring contractors, during his opening address to the 300-some-odd members in attendance. “More importantly, this is the most content we’ve ever offered for our annual meeting.”
In keeping with this year’s conference theme, “Never Miss a Beat,” the event was designed to transition seamlessly from last year’s meeting—which focused mostly on the subject of commercial design—to the 2018 conference, which was all about matters dealing with facilities and job-site issues. “In any organization you always want to have momentum,” Gordon said, referring back to the conference theme. “We’re trying to elevate our status in the industry.”
The numbers reflect that objective. Fuse Alliance management reports the group has grown to 99 members representing 150 locations. In terms of scale, members generate approximately $1.7 billion in sales today, which equates to about $1 billion in materials purchasing power, according to Gordon. The organization has also boosted its vendor lineup, adding 15 new suppliers in the last year alone. In addition, this year’s meeting welcomed nine new contractor members.
“Suppliers like to see growth, and we have definitely seen a surge in interest from vendors who said they would like to be more active with the group,” Gordon noted. “Furthermore, member sales are up 9%, while the industry at large is up 3%. That’s significant.”
Fuse Alliance members like Cleveland-based D&R Carpet Services is participating in the economic rebound. Daniel Schrickel, who handles sales for the company, is seeing a commercial renaissance of sorts, with particularly strong activity in the restaurant, hospitality and education sectors. “There’s a lot of rebuilding in our market,” he said.
Farther south, in Charlotte, N.C., commercial flooring contractors like Garmon & Co. are also experiencing growth, Scott Garmon, president, reports. The company—which provides a broad range of servicing ranging from product specification and consulting all the way through installation, certified reclamation and project management—has seen an uptick in activity amongst the key market segments it serves, especially corporate, restaurant/retail, financial and senior living facilities.
The economic outlook for some Fuse Alliance members is such that it is creating an environment that encourages reinvestment in the business. Such is the case for Lakeside, Calif.-based Christian Brothers Flooring & Interiors. “We see an opportunity to build a maintenance division that will strengthen our offering to our clients,” said Brian Boek, vice president of sales and marketing. The company has also renewed its commitment to integrate new technologies to streamline aspects of the business.
Despite their respective successes and achievements, Fuse Alliance members are not immune to the challenges and issues facing the commercial flooring sector. During a special roundtable-style breakout session on opening day, attendees were asked to split up into smaller splinter groups for the purpose of identifying common concerns and coming up with potential solutions. Among the most common problems/issues identified:
Dearth of installers. Finding qualified labor continues to be an issue for the industry at large for residential dealers and commercial flooring contractors alike. The problem, industry observers say, boils down to a lack of new installers coming into the industry to replace an aging workforce. “For commercial installers, the average age is over 50—and there are thousands of them,” Gordon said. “It’s a problem that’s going to increase before it decreases.
For its part, Fuse Alliance is working closely with The Certified Floor Covering Installers Association (now a division of the WFCA) on ways to recruit, train and retain floor layers. The group is also teaming up with what some consider a rival organization (the larger, more formidable Starnet Flooring Cooperative) in the development of a joint task force to address this perennial issue as well as other challenges facing the contractor commercial industry.
In the interim, CFI vice president, Robert Varden, offered attendees some suggestions on what the industry can do to address the installation issue while providing an update on what his association is working on to tackle the problem. As for the former, Varden sees recruitment opportunities in various initiative such as hosting job fairs at high schools around the country in addition to meeting with school counselors. Utilizing social media tools to reach students who are considering future employment options and developing incentive programs at the local and state levels are also legitimate approaches.
“Many kids are not aware of the job opportunities afforded by the flooring industry or how much money they can make as an installer,” he told the group. “We, as an industry, have to expose young people to these opportunities.”
Varden shared a sobering statistic that puts the issue in perspective. CFI’s research shows as much as 70% of installers in the field today have been working for more than 15 years, which means many are inching ever closer to retirement. At the same time, he said only 4% have been installing flooring for less than five years—which speaks to limited skill levels.
“In 40 years in the business, I’ve never seen anything like the pickle we’re in now,” Varden told attendees. “But I’ve also never seen more opportunities.”
For its part, Varden said CFI is working diligently to develop programs that not only provide installation training opportunities for newcomers but also intermediate and advanced educational sessions for experienced installers. These programs include training and certification programs covering both basic and advanced classes across a variety of soft and hard surface products. The majority of classes are held at CFI’s training facility in Forney, Texas, but the group is also looking into the feasibility of establishing training branches and networks in other locations across the country. Furthermore, the group has expanded its reach globally, conducting training in eight different countries and partnering with like-minded associations in Brazil, Canada and South Africa, to name a few.
Project delays. Flooring contractors, naturally, are typically one of the last trades to arrive on the job site. While project delays are common and often unavoidable due to various issues (last-minute design alterations, delays caused by previous trades not completing their work on time, etc.), it can cause problems for commercial flooring contractors who sometimes show up on a job site to complete a task but can’t proceed due to issues such as those mentioned above. For many contractors, downtime is wasted time—and lost revenue opportunities.
Some flooring contractors are counteracting this issue by building stipulations into their contracts with the general contractors that offer certain protections. “We request that the GCs we work with give us appropriate notice when there’s an issue,” Christian Brothers’ Boek said. “We tell them there’s going to be a cost associated with sending our crews out to the site if they can’t work. We understand there are issues with scheduling, but we can’t have our guys standing around. We don’t want to ruin the relationship with the GCs, but at the same time we can’t have them drive our margins down and cause you to lose money on a consistent basis. There’s a way to do it nicely and still be firm.”
Direct selling by the mills. This is an issue that one attendee referred to as the “elephant in the room” when his group was asked to identify the biggest challenges commercial flooring installation companies face today. “Everybody is talking about the lack of installers and product claims—which are affecting all of us, but for more me the proliferation of direct selling by the mills is the biggest issue,” the member said. “They’re using the same estimating services as flooring contractors. Some mills are essentially functioning as GCs, giving end users and architects and designers all the tools that commercial flooring contractors typically provide. Until we stand up, collectively, and say ‘no more,’ it’s going to get worse. We are all being relegated to a position of relative unimportance relative to the big picture.”
Part of the problem, according to Mike Hutton, senior vice president, Fuse Alliance, is manufacturers are feeling more pressure from clients to expand their offerings beyond product to include installation services—which puts them in direct conflict with many of the flooring contractors who purchase their products. Essentially, they are going after the same customers.
“I’ve spoken to the mill executives; they feel if they don’t respond to these demands from the end users, then the client is just going to go to another mill and they will lose the business,” he explained.
Hutton, who came to Fuse Alliance after working for nearly nine years on the vendor side with Interface Services, agrees it’s a complex issue. In his capacity with the group, Hutton is responsible for growing the national accounts business within the Fuse Network while working with members and vendor partners to grow their business. In seeking a resolution to this issue, he said he’s working hard behind the scenes to get the manufacturers to come to Fuse Alliance members with their projects as opposed to going direct.
“More manufacturers are developing turnkey services, but the people they are hiring are not flooring experts like Fuse members,” Hutton told attendees. “Individual companies don’t have the capability Fuse members have. We still have an advantage and a much better story to tell today from an installation service and logistics perspective.”
Gordon agreed, noting members can count on Fuse management to provide assistance in resolving issues such as these. “It doesn’t do us any good to get sideways with a supplier. We encourage our members to reach out to leadership if they have a problem. We can step in and get it resolved.”
Management issues. Other issues that came up during the roundtable breakout discussions was moisture mitigation—specifically, who’s responsible for ensuring testing concrete subfloor conditions on the job site—as well as the rising cost of providing health insurance to installers.
Despite these issues, Fuse leadership is forging ahead with its plans to grow the group while continuing to provide value for members. Primary goals and initiatives include building brand awareness for the group while communicating the importance of the network and benefits of partnering with members. The group is also constantly working to provide tools to help members more effectively market their business.
“We feel this is the time of the rise of the flooring contractor,” Gordon told attendees. “With our expertise in installation and logistics, we are playing a much larger part in the overall project. This is the best group of quality installation companies in the business, and your commitment to excellence is unmatched. We want to be the go-to network and the easiest people to deal with and offer the best customer experience—not only to the end customer but up and down the chain, including the supplier and general contractor.”
Members are buying in. “Fuse brings the best of the best commercial flooring contractors and manufacturers together and provides a network to solve common challenges,” Christian Brothers’ Boek said. “Fuse also brings a social element where relationships can be built across the United States where we can share ideas and improve together.”