Renovation realities
Typically, various trades are needed to complete a renovation project – a process that has to be managed for the project to be a success, writes Colleen Hawkes.
Home renovation seems to be one of those things we Kiwis think is part of our DNA. But there are enough stories about things that go wrong and projects left unfinished that should make us question our own abilities to project manage.
Increasingly, renovation firms are offering to streamline the whole process.
And when you look at the time and cost savings for new homes provided by group house builders, it’s not surprising that renovators are taking a leaf from their book.
Jon Bridge, co-founder of Refresh Renovations, which pools tradie resources, says the industry is changing, and it’s because of problems homeowners have been encountering.
The high number of jobs that end in disputes is one of the reasons the industry needs a more professional approach.
Bridge quotes the New Zealand Productivity Commission’s Housing Affordability Inquiry that showed budget escalations affected 49 per cent of homeowners, with 31 per cent having a dispute with a tradesperson.
‘‘This outcome would be considered outrageous in any other industry, but for as far as memories go back it has been
‘‘Tradespeople don’t try to deliver poor service, but with too much work to do, combined with unclear planning and scheduling processes, things fall apart very quickly.’’ Jon Bridge
Refresh Renovations co-founder
seen as normal in this sector.’’
The most common causes of disputes were non-compliant or defective work, poor workmanship, obligations not being met, and ‘‘unprofessional behaviour’’.
The inquiry also showed that on average, 30 per cent of the money spent on renovation projects is wasted – a figure in the low billions, according to Building Research Association of New Zealand figures.
Bridge believes the main reason for these failings is the fragmented structure of the industry, the high percentage of
sole operators, and homeowner project management.
Tradespeople will often agree to take on additional work, and costs can ramp up as more and more things are added that were not part of the original quote.
‘‘A small operator can very easily take on too much work. Tradespeople don’t try to deliver poor service, but with too much work to do, combined with unclear planning and scheduling processes, things fall apart very quickly.’’
Cost is often cited by Kiwis as a reason to hire a sole operator.
We believe we will get a better deal.
Bridge says this isn’t always the case. ‘‘Many people think a larger renovation company might be more expensive due to increased overheads. The opposite is true, in fact.’’
Bridge says there are cost benefits related to productivity.
‘‘For example, overheads can be spread more thinly over greater revenue. The ability to invest in marketing creates a high volume of projects, which can be used to aggregate demand and create efficiencies across a large number of contractors.
‘‘Larger total revenues allow larger companies to invest in better systems and processes, which further increase productivity. And there are many more economies of scale.’’
Bridge says customer service improves with larger companies, which have brands to protect.
‘‘Tradespeople, being largely under the radar, can afford to provide poor service. They only require one or two projects at a time, and can usually find these. A large company can’t afford to operate like that, and must have
a much greater focus on customer service.’’
Project management is also key – and easier for big companies.
Bruce Farquhar of Nelsonbased Trade Central NZ, says clients tell the firm that when they have done renovations in the past, they have engaged builders who subcontract to supporting trades – most require five trades.
‘‘Unless the builder has remarkable control over the scheduling, he is relying on these trades being available. But clients tell us whole days, and sometimes weeks, go by [just waiting],’’ Farquhar says.
‘‘[On projects] things happen sequentially. When I conceived Trade Central seven years ago, we put all these trades on staff, and provided two project managers.
‘‘We have an activity chart, called a Gantt chart, that determines who goes where and when.’’
The company aims to control the flow of staff and ‘‘get in and out quicker, so homeowners are not living too long with a mess of sawdust, tools and gaps in houses’’.
Sole traders work well
However, Jeremy Wyn-Harris of builderscrack.co.nz doesn’t believe there is a problem with sole traders.
‘‘Usually, people will hire a builder first, and they will be the lead trade,’’ he says.
‘‘They will just make it happen. They usually have a pool of their own people [list of other trades] on hand, and it usually works very well.
‘‘If someone is not available, then they will have someone else they can call.
‘‘It doesn’t have to be the builder that is the lead trade – it might be the plumber, but we do find most people start with a builder.
‘‘On the builderscrack site we will often find builders looking for subtrades for jobs.’’
Wyn-Harris says sometimes an owner will take on the project management themselves.
‘‘It usually doesn’t work as well. They don’t have the relationships, the skills or experience,’’ Wyn-Harris says.
‘‘It is actually very hard to do, and the outcome is not as good. It is all about relationships at the end of the day.
‘‘If subtrades do a good job, they get more work.’’
Bridge says he would like to see more tradespeople work for larger organisations where they can apply the specific skills they’ve learned.
‘‘It will never be perfect and there will always be issues with individual projects, but if there were more large renovation companies, the situation would be far better.’’