Working closely with all levels of the landscape construction sector gives landscape cost estimating specialist, Colm Kenny a unique insight. Here, he shares thoughts, opinions and his sense of how the sector is reacting and responding to the upswing in activity
Official figures show that 5,625 houses and apartments have been completed so far this year, up 16% (801 units) on the same period in 2014. In tandem with this activity, the commercial landscape contracting market has risen significantly. With the reigniting of the construction sector and improvement in the private landscaping market, landscape contractors, and indeed the landscape industry as a whole, should take the time to devise a strategy in order to ensure problems that arose around the bubble of the Celtic Tiger don’t happen again.
SKILLED LABOUR SHORTAGE
For landscape contractors, there are a number of key issues which must be overcome in order to sustain a profitable business. After several years of vicious price competition, a large number of landscape contractors I deal with are saying their biggest challenge is recruiting trained, experienced staff when they are required. The downturn had an enormous impact on the numbers employed in the industry. Many sector workers emigrated or diverted away from the industry entirely, seeking employment in more stable sectors of the economy. Added to the fact that the pool of workers was reduced, young people who may have once been interested in a career in horticulture could have changed their minds when they saw the state of the industry and were unable to find full-time employment a number of years ago.
To improve the situation and get the next generation into the industry, we need to encourage them and prove that it can be a rewarding career. Instead of throwing them in at the deep end, an apprenticeship type of scheme like that being trialled by Teagasc would see them learn new skills gradually over time and gain supervised experience.
With the landscape sector still the most unregulated industry within the wider construction industry, professionalism is another problem which needs addressing. Uninsured, fly by night businesses are causing harm to the entire industry and damaging legitimate contractors. They often face competition from illegal contractors who win the job on an unrealistically low price and even give and take cash payments. The standard of the completed job is often very poor but the homeowner or client may not realise that until the money has changed hands. This type of practice affects the view the average consumer has of the landscaping trade. Again, making a comparison to an electrician, if you need a fuse board changed at home you will make sure the electrician you get is fully registered and insured. Unfortunately, customers shopping for landscape contractors don’t carry out the same due diligence as they think anybody can ‘do landscaping’, and they treat you accordingly. Education of the general public is key to eliminating such contractors and bad practices. The challenge for reputable contractors is to educate their clients so they know what they are getting for their money and are aware of the long-term cost of poor workmanship.
A registration system is needed for the landscape industry, to weed out poor standards and increase professionalism. The Association of Landscape Contractors (ALCI) is the professional trade association but is struggling to get members and recognition from other sectors of the industry.
They have around 100 members, which I would guess is less than 5% of the number of contractors operating in Ireland. If there were more members it would be a lot easier to promote it among the wider public. Again making a comparison to the electricians, they have a very strong trade industry in Registered Electrical Contractors of Ireland (RECI). This is the type of brand recognition that is required to drive on the industry. How this is achieved won’t be done in the short term but recruitment of members into the ALCI is the first step on a long road. Often some non ALCI contractors I know would comment that they don’t see the benefit of joining organisations such as the ALCI.
However, I am of the opinion that there is strength in numbers and having one strong voice lobbying for improved standards across the industry can benefit all. Apart from adding more contacts to your network, more information would be shared within the industry. Other contractors may be able to help you out in times of need such as sharing
labour resources or specialist machinery. Indeed, there would be opportunities for contractors to collaborate with each other. Small contractors joining up together as a joint venture to take on projects that they would normally not be in a position to undertake would be of benefit to everyone and help spread the workload to more businesses. This is a common practice in the construction industry so why not in the landscaping sector?
Now that ads for 0% finance on new vans and jeeps are back on the radio, we all need to stop ourselves from getting carried away investing in vehicles and machinery that we don’t really need. The lessons learned in the past few years should stick, if you navigated those years successfully. Collaborating with other contractors could reduce your need to buy specialist machinery, which might only be used a few times.
Taking an accountant’s approach by hiring in all your machinery is another solution that could work, particularly for smaller contractors. Hire companies are plentiful and have built up a good stock of specialist landscape equipment. Even if this is used as a short-term strategy, you could use it to gauge or estimate if you really need to buy new machinery. It doesn’t make sense to buy a machine if you don’t have at least a quarter of its value lined up in orders over the next year. The days when contractors bought €3,000 machines on a three-year loan at high interest are thankfully over and hopefully never to return again.
Recognition by potential clients of this professionalism along with the skills and experience required to carry out a landscape contract to the highest of standards can only have a positive impact when contractors seek to increase profit margins by raising rates. Pricing pressure, which was the result of a slowdown in the economy and also because of illegitimate contractors, should slowly start to ease with the rise in the economy. Smarter business practices such as selecting the project that suits your operation are also something contractors should consider. During the last number of years, we had a situation where contractors were afraid to turn down projects, even if they didn’t suit them. Smarter decisions in choosing projects that suit your machinery and the skills of you and your staff are key. Don’t be afraid to let projects pass you by. Concentrate on winning jobs that suit your business. Many contractors tell me they have not changed their rates since 2010.
Hearing this makes me nervous about the chances of a long-term future for such business. Are they chasing the wrong types for projects for their businesses? Prices have increased marginally since 2014, but so too have costs, and prices haven’t been able to increase fast enough to keep up with costs, so in order to combat this and stay in business, efficiencies need to be found. Cost control is a vital element in sustaining a business. The challenge is to determine how we can be all more efficient with our labour, machinery costs and general overheads and still deliver services profitably.
Other problems faced by landscape contractors are caused by our colleagues within the sector. Again recognition of the professionalism of contractors by designers and other consultants such as architects and engineers is needed in order to improve standards across the industry. Communication and respect between all parties would lead to better working relationships and a clearer understanding of everyone’s requirements. It would be a huge step to get not just the contractors involved in the design phase at an early stage but also the nursery producers. The expertise they could bring to the table would be huge and of benefit to all parties. Designers would have added input in terms of how designs would be constructed. Plant availability would improve as designers would have up to date information and the nurseries would have the opportunity to promote Irish stock and contract grow it if required. This would cut down on the amount of imported stock sourced throughout Europe, provide employment and the opportunity for the next generation of nursery growers to pursue a career at home.
What often happens in larger landscape schemes is the designers spend a massive amount of time developing high-class designs to satisfy their clients. Unfortunately, such designs are not included in the original cost plan and so value engineering is required to bring the designs within a notional budget, often set by professions who have no comprehension of the importance of high-quality landscape schemes to accompany their high-quality buildings. Granite worktops and expensive tiling of bathroom floors are specified in lieu of tasty paving and feature trees and specimen plants. Setting budgets at an early stage, even from initial sketch designs, could be done in a logical manner if contractors were allowed to participate. The design can often be enhanced by input from contractors as they know the mechanics of implementing the design on site.
In the words of one contractor who has been around long enough to have survived numerous recessions, ‘How do we survive?’. Simple, we do good work, we do it consistently and we charge appropriately. If we don’t get the job for the money we need for it, we let it go and chase the next one that suits our business. While the challenges within the industry are significant, I think that they can be overcome with correct decision making as individuals and work together to promote the industry to our colleagues within the industry and the wider public. ✽
 Colm Kenny, B Ag Sc (Land Hort), M Sc Quantity Surveying. Colm is a landscape estimating specialist. He provides cost and implementation advice to landscape industry professionals, technical advisors, contractors, and facility management companies. He can be contacted on 087 288 5016 or by email info@landscapeqs.ie |
