To the Point Home Services Podcast

The Home Services Podcast That Gives Back

Episode 48: Solving Labor Shortage with Labor Velocity

December 15, 2020

Episode 48: Solving Labor Shortage with Labor Velocity

Published: December 15, 2020
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If you’re in the trades, you know that the so-called labor shortage is a pressing topic in the industry. Finding talented technicians, plumbers, and tradespeople is always a hot topic. Chad Peterman, President of Peterman Heating, Cooling, & Plumbing, doesn’t quite see it that way!

Peterman was started by Chad’s father in 1986, in their family garage. What started as just a small-time heating company grew over the years, and Chad and his brother found their way into the family business. They added plumbing and after a small acquisition, Peterman was doing pretty well, landing around 7 million in 2015. Then, they joined the Nexstar Network, and were catapulted to places they never imagined. Additional services and a location were added, and they are currently looking to end 2020 at about 29 million and 200 employees across their 3 locations. That’s huge growth in just 5 years!

Joining Nexstar

The decision to join the Nexstar Network was easy, but the transition was certainly a big one. During this time, Chad’s father was in the processing of semi-retiring and handing off the business to his sons. Having Nexstar behind them gave the family peace of mind knowing they had proved practices and processes as well as a support network they could rely on. A big change is always a risk, but it definitely paid off and continues to do so today.

At the time, Peterman had only 35 people working in the company. They didn’t really pay attention to the numbers or a budget, and kind of just rolled with the punches. Their way of doing things had always worked before, but once they were held accountable by Nexstar, Chad and the team had to reel the numbers in and take control. Another key to their rapid growth was a focus on their call center and dispatch teams. By retraining their dispatch to strategically place the calls and their call center to just book the calls, efficiency skyrocketed. Chad’s willingness to make a big change and join Nexstar has been a great success for Peterman, but Chad doesn’t take the credit. Instead, he points out that his willingness to learn from others and implement what he’s learned is what’s propelled him to new heights in the trades. He’s always reading, listening to podcasts, leaning on his mentors, and looking for ways to improve the business and grow as a person.

Peterman Top Tech Academy

Chad learned as he grew that his HVAC and plumbing service agreements were generating a lot of lead velocity. He was able to forecast into the next year and know just how many techs and plumbers he would need. However, you need a way to increase labor velocity to match this lead velocity, or else you’ll be left scrambling. This ties neatly into an ongoing discussion in the industry over finding enough talent. It’s an all-to-familiar process of finding a good technician, convincing them to leave their contractor and join yours, and then trying to retrain them. Oftentimes you end up fighting learned bad habits, struggling to integrate them into your culture, and dealing with being on the opposite end of this very situation.

We’ve been conditioned in the trades to fish in the same pond, but it doesn’t have to be that way! Chad points out that while we might have a shortage of experienced technicians, there’s a surplus of good people. That’s why he’s growing his own technicians and plumbers from the ground up in his very own training academy. He’s worked with his mentors and used similar models to create the Peterman Top Tech Academy. By combining the Nexstar online training platform NexTech Academy with his own curriculum, Peterman is finding good people and turning them into the future of the trades.

Finding the Right Candidates

When you open up the pool of potential candidates outside of existing technicians and plumbers, your options open up way past the tech from the contractor down the road. The first class of Peterman Top Tech academy is filled with good people with absolutely no trades work experience. There is a former paramedic, someone who worked a Lowe’s, and even a person who had a 16-year career in manufacturing and wanted a career change. What they all have in common is being hungry, humble, and smart. Chad used the wisdom in Patrick Lencioni’s book The Ideal Team Player to screen for candidates that were simply good people with the right personality traits.

Instead of just checking the usual boxes of whether the candidate can drive, pass a drug test, and has some experience in the field, Peterman Top Tech Academy is taking candidates from all over to create great tradespeople from the ground up. There are 16 students in the first class, whittled down from over 600 resumes that were sent in. Peterman also made the decision to put them on the payroll so they don’t have to worry about putting food on the table, allowing them to focus completely on their training. It’s an investment, but this means instead of setting up a night program, they can allow for their candidates to leave their jobs and fully integrate into the culture and immerse themselves in their learning.

The Training Process

Peterman Top Tech features a full-time HVAC trainer and full-time plumbing trainer, both of which were already employees at the company. It was a great opportunity for growth for them, and they were excited to be involved in creating the next generation of technicians and plumbers to be a part of the Peterman team. Becoming a trainer is exciting for them, and they are passionate about their new role.

In addition to using the Nextech Academy online courses, the candidates are spending a few days a week riding along and learning hands-on skills they’ll use when they graduate. This mixture of work in the lab, in the field, and online training is designed to give them the tools they need to succeed while simultaneously integrating them into the Peterman culture. This class is expected to graduate after about 3-4 months, and the exact time of the training will likely be nailed down after subsequent groups of trainees.

Looking Ahead

Chad and Peterman Heating, Cooling, & Plumbing continue to focus on growth and see huge opportunities in their Indiana market. Peterman Top Tech Academy is expected to be a catalyst for seizing these opportunities, and for making Peterman a better place of growth for their team. Our industry is often characterized by limited opportunities, and this model for in-house training solves more than just that. It’s a competitive advantage, it helps bring good people into the industry and trains them the right way, and is bringing back honor to the trades.

For an even more in-depth look at his journey and the Peterman story, you can read Chad’s book, You Can’t Stop the Growth. It’s an incredible tale of growth, family, and how Peterman became the culture it is today.