At a time when competition and low margins have left many union contractors all but abandoning the residential HVAC service market, SMACNA St. Louis and SMART Local 36 are experiencing major growth in the sector.
The reason, according to union officials, is a cooperative relationship between Local 36 and the SMACNA chapter, as well as training and marketing efforts designed to attract loyal employees and customers.
“We just have a really good relationship as far as labor and management goes,” said Ed Hoganson, the marketing and recruitment director at Local 36.
It’s unusual enough that members of SMACNA’s Residential Council Steering Committee recently came to the union’s $22M, seven-year-old training facility to check out the Leadership in Energy and Environmental Design (LEED) platinum-certified building and learn some of the reasons for the groups’ success.
From service rebates to a new website designed to encourage homeowners to contact a local SMACNA contractor for residential work, officials say the partnership has helped both parties reach their common goal of boosting market share.
Optimized for Success
Visitors to SMARTStLouis.com, the website jointly operated by the union and the city’s SMACNA chapter, will see the SMART union’s stylized logo. They won’t find overt references to Local 36 or the national organization, and that’s by design, Hoganson said. It was search-engine-optimized to be a go-to place for area homeowners to find contractors to service or repair their HVAC systems.
Besides a list of SMACNA St. Louis member contractors, the site includes consumer-focused tips on HVAC system maintenance, a glossary of industry terms and a blog on ways to get the most out of home comfort systems. SMART and SMACNA recruiting information also can be found on the website. Additionally, the joint marketing campaign includes advertising on radio, TV and social media.
A Growing Market
The effort has been a success. Hoganson estimated that SMACNA St. Louis contractors do up to 10 percent of the residential HVAC work in the region. While that may not sound like a large share, it is a much larger share of the market than many of the other chapters across the country can claim.
“(And) we are growing,” Hoganson added. “A lot of our residential contractors have been around a very long time.”
According to Hoganson, roughly a third of SMACNA St. Louis contractors’ 2 million work hours per year come from the residential sector. Surveys conducted by the union showed that SMACNA’s residential contractors in the area are competitively priced when it comes to desirable projects and high-quality work.
“We’re not going to be the guy that puts Band-Aids on rental property or apartment complexes in depressed parts of the town where they’re really going after that cheap bottom line,” Hoganson said.
That’s not the work that SMACNA St. Louis or Local 36 wants.
“The people who want no has-sles, no callbacks and a good job — we compete very well for that. If it’s not the guy who’s flipping a house or something like that, we compete well.”
Another reason for the healthy residential market in the region, Hoganson said, is the service rebate program established by SMACNA and SMART Local 36. Anytime a homeowner signs a maintenance agreement with a SMACNA St. Louis contractor, the homeowner gets a $25 rebate on the cost of the plan, which can range from $150 to $200 on average.
The rebate program has more than 20,000 participants, which translates into more than 40,000 service checks issued annually. Some months, the program sends out more than $30,000 in rebates.
It’s a win-win-win for home-owners, union workers and the contractors that employee them. Homeowners have efficient HVAC systems, workers stay busy, and the program helps sell high-margin maintenance agreements and build long-term customer relationships. “I really believe that it gives (homeowners) peace of mind,” Hoganson said. “I always say that everybody has a doctor, a lawyer, an auto mechanic. Everybody should have an HVAC company.”
Attractive to Potential Workers The chance for steady work thanks to the rebate program and other marketing efforts makes the HVAC industry more attractive to potential employees, Hoganson said. Because SMART Local 36 and SMACNA St. Louis have a good working relationship, contractors have a greater degree of flexibility in hiring workers. In St. Louis, new residential technicians don’t have to come through the union’s hiring hall.
“We recruit through tech schools; we recruit from the non-union contractors,” Hoganson said. “They can hire off the street. It’s a collaborative effort between [Local 36] and contractors looking for the best technicians.”
The potential hires are tested to judge their skills, from beginner to journeyman-level. Then a customized curriculum is developed and resumes are sent out to see if their skills match the needs of any area contractors.
The program has given a boost to the number of technicians pursuing residential certifications: According to Hoganson, out of the approximately 250 apprentices currently enrolled in the Local 36 program, more than 50 are learning residential service technology. In fact, the St. Louis program is so successful, the local Joint Apprenticeship and Training Committee is going to hire a second full-time service instructor.