C&R Roundtable: The State of the Industry

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Industry experts weigh in on trends, opportunities, weaknesses, and more.

1. What do you see as the restoration industry’s biggest strength going into 2024?

Moore: Heading into 2024, the restoration industry’s greatest strength lies in our collective numbers and diversity. The global average annual revenue for a restoration company is approximately $2M-$3M, representing the typical restorer’s reality. This broad base of average restorers forms the backbone of our industry, not just the few national firms. While companies like ATI Restoration are exceptions, it’s the voice and perspective of the average restorer that holds the real power to influence the industry’s future. To harness this power, we urge you to join the RIA. We need representation from industry professionals like you, men and women who can provide valuable insights and perspectives. Your voice matters, and it’s crucial for it to be heard.

Cruz: I see great momentum in unifying a once greatly fragmented industry by the work being done by the RIA in providing a place for restorers to share their frustrations.

Rose: The nature of restoration services is inherently recession resistant.  This will continue to be true as many other industries feel the impact of the economy.  Additionally, there will be more advancements in technology that are good, but may bring disruption for many in the short term.

Smith: For the first time in restoration history, all major brands are united through membership in the Restoration Industry Association. Now, independent restorers and franchises are working side by side and sharing their resources to address the biggest threats in our industry, such as pricing, third parties, and legislative issues. Through the Advocacy and Government Affairs Committee, restorers have a united voice.

Gray: The restoration industry is expected to have strong momentum in 2024, thanks to the increasing global demand for restoration services. As a result of an unfortunate increase in natural disasters, there is a growing need for the property restoration industry to rise to the occasion. As the frequency and intensity of wildfires, hurricanes, and other catastrophes continue to rise, operators in this industry have the opportunity to step up and restore the property and lives of an increasing number of people impacted by disasters.

2. What do you see as our industry’s biggest weakness?

Moore: The industry’s main vulnerability lies in the lack of unity among restorers. Surprisingly, only 10% of all restoration companies are currently members of the Restoration Industry Association (RIA). To strengthen our position, we must unite under the umbrella of RIA. It’s not about unionization but recognizing the power of collective voice in today’s society. We should shun the divisive practices of criticizing how others secure their work, whether it’s through TPA, chasing, or plumbing referral work. We are all part of the restoration industry and should take pride in the diverse ways we manage to earn our livelihood. The absence of the majority of restoration companies from RIA undermines our collective influence and potential. We must strive to enhance this representation and invite more voices to join us.

Cruz: There are still hundreds of restorers that have not joined the RIA to help elevate this industry by honoring the high-level standards provided by the RIA.  There are still many insurance 

companies and TPAs forcing smaller, independent contractors to do things that are not normal business practice… those restorers do it because they don’t know any better.

Rose: Continued dependence on traditional, carrier, and TPA centered work funnels which effectively puts carriers in charge. This will continue to drive down prices and, unfortunately, customer service levels.

Smith: With the increase in catastrophic events, carriers are seeing a decline in profits, which means they are using new tactics to scrutinize our invoices and increase pricing pressure. I believe this trend will increase in severity. The RIA’s AGA has already given us numerous tools and resources to respond to these threats, and that arsenal will expand in 2024. However, there’s a lot of noise distracting us, and coupled with the emergency-based nature of our business, and issues like labor shortages, business owners tend to succumb to the urgent instead of the important. These distractions are keeping us from being laser-focused on industry sustainability and disseminating the AGA’s resources throughout our companies. Let’s leave the industry better than we found it and get our team members speaking with one voice on a claim-by-claim basis.

Gray: There is a growing need for restoration services, but our supply chain presents a major area for opportunity. Our industry would benefit from additional well-organized resources that are constantly ready to be deployed to diverse locations during times of high capacity. We must find ways to increase our workforce and organize these professionals to meet restoration needs as quickly and efficiently as possible. Technology can play a crucial role in achieving this objective. We can use it to recruit younger generations into the industry as older professionals retire. Additionally, we can leverage technology to enable these newer industry members to reach job sites faster and ensure they get paid accurately and on a timely basis. By using technology strategically, we can overcome challenges in our supply chain and ensure that the right resources are available to meet the needs of the industry.

3.  What do you see as the biggest opportunity for the industry looking into 2024?

Moore: The most promising opportunity for our industry in 2024 lies in understanding and leveraging our indispensability to insurance carriers. To gain more influence and credibility with carriers or TPAs, we must present a united front.

Cruz: Supporting the AGA to be the voice and muscle for all restorers.

Rose: Making restoration attractive to a younger labor force is the biggest opportunity.  As more and more high school graduates (and their parents) question the traditional college education path in favor of trades, restoration companies could capitalize on this by creating a compelling culture and income opportunities that rival other trades.

Smith: Enrollment in four-year universities is declining, which means that young people don’t feel as much pressure to achieve a degree, and they are much more inclined to entertain a career in the trades. We have the opportunity to expose Gen Z and beyond to the awesome purpose behind our profession. Similar to how most of our customers don’t know about our industry until they need us, young people need to be exposed to the restoration industry before they graduate from high school. We have the opportunity to create career paths and curriculums for young professionals who are looking for meaningful work and want the opportunity to build a career in the industry from the ground up.

Gray: Data is a crucial asset for any organization, and companies can leverage it to take advantage of the benefits of Artificial Intelligence-based technologies. AI can streamline business processes and workflows in the property restoration industry, helping companies achieve more with fewer resources. With intelligent automation, it can help address workforce and operational challenges. However, companies must ensure that the data they collect is structured and well-organized to get the most out of AI. By establishing robust data collection and management processes, companies can leverage increasing AI innovations to optimize their business procedures and gather valuable insights to future-proof their operations.

4. From your viewpoint, what are the best operators (regardless of size) doing to be successful in these three categories:

  • Hiring/Retaining employees

Moore:  For hiring and retaining employees – RMC and Thomasville are paving the way.

Cruz: In order to hire the best employees, you must really take lots of intention in preparing the ads or recruiting tools to attract the best candidate. Retaining the best employees requires great onboarding methods and cultivating an atmosphere of a winning culture in your company.

Rose: Creating pathways to career permanence and entrepreneurism.  Culture is too large a word to describe specific strategies, but the best employers have the best culture.

Smith: The best operators are building and maintaining great cultures that attract and retain the best talent and produce exceptional net promoter scores.

Gray: Workforce problems plague the property restoration industry, and operators who focus on creating a culture of collaboration and engagement are the organizations that overcome such challenges. Employees must be in an environment where they feel free to fail so they aren’t afraid to experiment and challenge norms that prevent them from growing. Along with this freedom, they should be held accountable to be a part of a winning team. They need to feel connected to a greater cause or purpose than any individual. Attracting and retaining talent in this industry is difficult, especially for the younger workforce. As a result, successful operators in this industry leverage a full spectrum of tools and technologies available to set their workforce up for success in an environment of changing customer expectations. They realize they should build teams attracted to technology solutions instead of clipboards.

  • Getting paid

Moore:  Regarding getting paid – This is a universal struggle, and it’s been the primary concern for everyone in 2022 and 2023.

Cruz: Providing the best documentation.

Rose: Leveraging the best technology to create invoices that are bulletproof.  You can’t argue with facts no matter how hard you try.  There simply is no substitute for professional documentation of the job.

Smith: Documentation always wins when it comes to getting paid. The best operators are swiftly implementing technology that helps their team document efficiently and thoroughly.

Gray: To ensure that operators get paid for their services, they must make documentation central to their business processes. Every procedure should have proper documentation to ensure that every member of the organization gets paid accurately. Restorers must align with the carrier’s estimate from the beginning to create an effective plan of action based on the estimate documentation. This will ensure that no restorer does work for which they won’t be compensated. Work authorizations should be in place before starting any job, and restorers should also obtain and store comprehensive photos of pre-existing property conditions to avoid any false claims of damage incurred during a project. As restorers change a property, they must consistently obtain documented signoffs from carriers to avoid miscommunication that could delay payments. Collaboration is crucial in this process, but documentation is at the heart of payment collection and maintaining good relationships with carriers and homeowners.

  • Working with adjusters

Moore: In terms of working with adjusters – ATI is showing commendable proficiency.

Cruz: Educating them and providing a professional relationship that helps them become better at what they do,

Rose: Focusing on adjuster education over the traditional adversarial communication style and approach.  Adjusters are trending younger and more inexperienced.  They need to know the right way, especially if their own internal directives are in opposition.  A calm, assured tone combined with unassailable evidence of your correctness is a winning approach for all sides.

Smith: Again, documentation, and delivering exceptional service to the policyholder, which results in less headaches for the adjuster.

Gray: For operators to be successful, it’s important to follow procedures similar to those that ensure timely payment. The key to successfully working with adjusters lies in three pillars: proper documentation, maintaining effective communication with them, and collaborating with adjusters from the outset to ensure customer satisfaction. Establishing standards at the beginning of every project and adhering to them consistently is essential to remain compliant. Technology can also be important in facilitating collaboration between adjusters and restoration professionals. For instance, CoreLogic offers platforms that enable data sharing between adjusters and restorers, as well as applications that automate compliance regulation tuning for onsite technicians to ensure consistent adherence to standards.

5. What’s your favorite leadership-building tool right now?

Moore: At present, my top picks for leadership development tools are Vistage for owners and general managers, YPO for owners, and advanced certification within RIA for potential leaders.

Cruz: Education and maintaining a winning culture that provides excellent service to our customers and keeping the charity side of our business strong.

Rose: Though it sounds counterintuitive in today’s culture, people crave accountability.  Any tool that provides clear instruction and instant accountability is going to be a valuable tool for leaders.

Smith: I’m a big fan of BambooHR’s Performance feature which is a great guide for one-on-one conversations, and it produces reports that measure culture. It’s a great tool for setting and tracking individual growth goals that are in alignment with the company’s goals.

Gray: Some of the best leadership-building tools are frameworks that help leadership teams create an optimal working environment for all employees. One such framework I find particularly helpful is Patrick Lencioni’s book, The Five Dysfunctions of a Team. At CoreLogic, we have integrated these principles into our practices. Our leadership fosters transparency to build trust with employees. We encourage open conversations, allowing team members to challenge norms, and confidently tackle significant issues. Our goal is to bring everyone into the greater vision of the organization.

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