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For HVAC contractors, the summer of 2023 can be summed up in one word: challenging.

Numerous obstacles, including mild weather, a lack of demand, a shallow pool of skilled tradespeople, increased competition, inflation, supply chain shortages, and more, have stood in the way of contracting success throughout cooling season.

HEAT HURDLES: For HVAC contractors, the summer of 2023 can be summed up in one word: challenging. (Courtesy of ARS/Rescue Rooter Indiana)

Despite these hurdles, the show must go on.

The ACHR NEWS met with a handful of contractors who dissected the issues that have slowed their progress this summer and shared the steps they’ve taken to overcome these obstructions while meeting or exceeding their goals.

Heat Pumps Are Hot

Global sales of heat pumps grew by 11% in 2022, according to the latest IEA analysis, marking a second year of double-digit growth for the equipment.

Josh Conder, general manager, ARS/Rescue Rooter Indiana, Plainfield, Indiana, said his company has had a lot of success with heat pumps this year.

“We’re selling more and more heat pumps every day,” he said. “This is a trend that isn’t slowing down anytime soon, as we believe it will pick up even more speed than it has already going forward.”

Bryan Benak, CEO, Southern Home Services, Orlando, Florida, said his company has seen an increase in heat pump sales, though he insists this is only the beginning of a massive sales surge, once the Inflation Reduction Act’s tax incentives kick in.

“Once those rebates kick in, consumer awareness is expected to soar,” he said. “When it comes to rebates and incentives, we train our technicians to start the conversation with homeowners, helping them understand the potential for savings and providing information on how to do their own research and take advantage of the benefits they have available to them.”

Ken Goodrich, CEO, Goettl Air Conditioning & Plumbing, Las Vegas, said his company continues to lean into the electrification movement.

“For the Southwestern U.S., heat pumps are among the best forms of air cooling and heating,” he said. “I'm excited about the whole advent of the heat pump and what it's going to do for our industry and business. Heat pumps will allow us to offer a better service, better environmental commitment, and a better outcome for our customers.”

Goodrich envisions a time when contractors will only offer heat pumps, minimizing SKUs and installation options.

“Imagine, as a technician, all you have to do is show up on the job, program the unit to operate to a specific condition, and off you go,” he said. “That’s where I’d like to see our business go.”

While heat pumps are gaining steam with environmentalists and those within industry circles, Goodrich insists they’re not atop customers’ shopping lists quite yet.

“People are not really aware of the difference between heat pump and traditional equipment,” he said. “It’s our responsibility as contractors to explain the difference and showcase how a heat pump makes sense from a comfort standpoint.”

Where Are the Workers?

In the skilled trades, there simply aren’t enough workers to meet the demand. According to Associated Builders and Contractors Inc. (ABC), the construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor. Some estimates state the HVAC industry is facing a shortage of approximately 40%.

For Chris Petri, operations manager, Petri Plumbing, Heating, Cooling & Drain Cleaning, Brooklyn, New York, finding quality employees has been a challenge since the company opened its doors in 1906.

When evaluating prospective hires, the company places a high emphasis on work ethic.

“We look for unteachable qualities, like drive, positivity, and a desire to get better,” said Petri. “From there, we can train them accordingly and help turn them into all stars.”

HELP WANTED: Josh Conder, general manager, ARS/Rescue Rooter Indiana, said recruiting and retaining quality workers remains an every day challenge. (Courtesy of ARS/Rescue Rooter Indiana)

Conder said recruiting and retaining quality workers remains an everyday challenge. The company has had great success through an annual recruiting event called “Spring Training.” Through the event, the company welcomed 545 new hires this year.

“This rush of new employees helped us prepare for the cooling season,” he said. “It was a strategic investment that’s paid itself off many times over.”

Benak said mild weather makes it difficult to staff to a peak could potentially last eight weeks or less.

“When we’re not at peak, we are able to hold our own,” he said. “But, once that peak arrives, companies like ours are overwhelmed.”

Goodrich received his first HVAC license back in 1986, and staffing has been an issue ever since.

“We've always had a robust human resources and recruiting initiative,” he said. “While it's difficult working with the new generations, we've developed a system that’s provided a constant flow of new recruits, complete with a training system, that continues to develop our employees.”

Goodrich enlisted the Ritz Carlton Consulting Group to help mold its overarching culture as well as its day-to-day operations.

“We’re driven to offer an elevated, first-class service, much as you’d find at a Ritz Carlton,” said Goodrich. “We aim to pamper our customers and employees, as if they’re staying at a Ritz Carlton. These guidelines define the way we communicate with each other and the routines we follow in and out of the office.”

To retain employees, Goodrich said Goettl offers a number of contests, incentives, and year-end bonuses.

“We’re injecting enthusiasm and opportunity into our internal customers’ hands every single day,” he said. “We remain committed to rolling out the best, most cohesive team we possibly can.”

Fluctuating Demand

As COVID brought the country to a screeching halt, more and more people found themselves working from home, quarantined from others. The increased time at home, combined with government incentives and a lack of travel expenses, caused more people to focus on home improvement projects, including upgrading their comfort systems. As a result, HVAC service and replacements flourished from 2020 to 2022.

“We pulled forward a lot of demand during the COVID years,” said Goodrich. “We replaced a lot of units in 2020 and 2021, when people were more focused on their comfort levels within their residences.”

Conder agreed, stating their crews were busy during the COVID years.

“Because of COVID, more people were home, and if they needed to get something fixed, they did,” he said. “HVAC units often climbed to the top of those lists.”

For ARS/Rescue Rooter Indiana, that post-COVID workload has remained steady — a trend Conder hopes continues.

“COVID raised the bar, and we’ve yet to see an adjustment from our customers,” he said. “The demand in our market continues to be very high. A furnace or air conditioner is not a luxury item, and when a unit breaks, it has to be replaced. From that aspect, these units tend to sell themselves, especially during extreme weather.”

While COVID provided a brief surge, it did not have a major impact on Southern Home Services’ workload.

“Trade business, like HVAC and electrical, boomed during COVID, which was great because many industries didn’t,” Benak said. “But, looking back, I don’t believe COVID had a major impact on our sales. When it gets extremely hot or cold, consumers purchase comfort systems, regardless if a pandemic is present or not.”

Finish the Year Strong

Despite the obstacles that have emerged, Conder said ARS/Rescue Rooter Indiana has exceeded its financial goals thus far for 2023.

“Overall, we’re doing really well,” he said. “The first quarter was a challenge, as we kept waiting on winter to show up, but we made some adjustments. Our Q2 was great, and we intend to gain even more ground through Q3 and Q4.”

Petri said his company has more than exceeded its financial expectations for the first half of the year.

“Our HVAC department has grown nearly 250% through the second quarter and nearly tripled in June,” he said. “Our market is prime for companies who can deliver value, which we strive to do.”

While temperatures across the U.S. have been heating up as of late, Benak hopes they continue to rise.

“We had a mild winter and spring, so it’s time to turn up the heat,” he said. “If I could change one thing this summer, that’s it — let’s crank up the heat.”

Goodrich said Goettl continues to exceed its financial goals as well. To further that growth, he has set his sights on increasing the quantity and quality of his maintenance agreement contracts.

“It’s crucial that Goettl sticks to the fundamentals,” he said. “And for us, our club memberships are king. We remain focused on attracting as many customers as we can and retaining them through strong relationships. We’ll continue to emphasize our story, demonstrate excellence through our brand, and deliver what we say we’re going to. That’s the recipe for long-term success.”