Maximizing Vendor Relationships During a Labor Shortage

Beyond Maintenance Series: Part 6

In part 6 of our Beyond Maintenance Webinar Series, we focused on maximizing vendor relationships during the labor shortage.

Experts on our panel included maintenance managers and vendors that shared valuable insight.

What is your perspective on the vendor labor shortage?

Vanessa Quevedo Rodriguez, Maintenance Manager at T-Square Properties, began the conversation by mentioning the struggle of vendors and the supply chain shortage.

“Parts are nowhere to be found,” mentioned Rodriguez.

Andrew Coburn, Operations Manager of Robert C. White & Company, chimed in, speaking of the supply shortage and how his property management company has handled it.

“It’s similar on this side of the country (Connecticut). Parts are an issue, specifically appliances and garage doors. Simple materials that contractors could find easily are now difficult, ” Coburn shared.

From the perspective of property management operations, Rodriquez and Coburn shared their experiences of labor shortages and staying ahead of demand. Some of the most challenging quality vendors they search for are HVAC, handymen, and electricians.

One of our maintenance experts, Ani Ganesan, Owner of Blue Chip Maintenance, shared his insight as a vendor in the trade market. The difficulty of finding quality technicians is at an all-time high.

“It’s obviously hard to find skilled tradespeople right now. Our spend was over $120,000 just for recruiting, especially licensed electricians and plumbers,” Ganesan said.

“We support a national market, pains that we feel are very similar to coordinators. Our expectations for hiring vendors are very high, it’s been difficult to just get people on the phone. So we invest a lot in resources and recruiting,” says Landon Cooley of Ventura Pest Control. 

How vendors are combatting the Great Resignation.

From the vendor perspective, Ganesan was excited to incorporate how they are combatting the labor shortage. He shared the importance of retaining your existing staff and how to recruit.

“There are a lot of people looking for a different career path. We try to keep our team together and retain them by recognizing them and having fun through events. Raising the culture game will help retain them,” said Ganesan.

At Blue Chip Maintenance, they leverage relationships and pay competitively where the competition lacks. 

Has there been an increase in charging for services due to the shortage of supplies and materials? 

“A lot of the vendors we used in the past, we have seen their prices go up. I talked to one of our HVAC vendors; we see 10% increases and don’t see that coming back down,” says Coburn.

Ganesan chimed in, bringing up a recent LinkedIn post that Ray Hespen, Co-founder and CEO of Property Meld, shared on HVAC invoices increasing by 20%. He confirmed that his experiences ring true to that number.

Cooley shared that their business prices increased by 15%. Cooley attributed the increase in repair invoices beyond just material parts, but continually rising cost of business overhead.

“We’ve had to increase pay, health benefits to retain employees, fuel for our vehicles, it’s been what we’ve needed to do just to survive,” says Cooley.

Has there been an increase in charging owners for maintenance?

Both Rodriguez and Coburn follow a preferred vendor program at their companies. This relationship aims to provide the specific vendors with more work opportunities in exchange for reasonable pricing for the work. Rodriguez hasn’t experienced an increase in their prices to their owners because of this established relationship.

However, Rodriquez emphasized the importance of sharing knowledge with the owner. 

“We tell them about the shortage and prices are increasing. Whatever you paid last year is not the same as now, so we are making them aware so it is not a surprise when they get an invoice,” says Rodriguez. 

Coburn’s shared that Robert C. White and Company does not charge owners for maintenance. While this hasn’t impacted the cost for owners, Robert C. White and Company impressed the importance of implementing a preferred vendor network, especially when growing a portfolio.

 “We want to help our vendors grow, in exchange for competitive pricing versus gouging for work. Vendors will be able to grow if we can grow,” says Coburn.

Has there been a noticeable impact on resident satisfaction due to the delayed repairs caused by material and labor shortages?

All panelists agree that resident satisfaction is dependent on communication with all parties, residents, and vendors.

“Communication is the most important thing. We use many different platforms with our clients, but we use Property Meld so the resident and vendor are communicating about parts being ordered but are waiting for it,” says Ganesan. 

Coburn elaborated on the importance of communicating clear expectations with your residents. 

“When a work order comes in, our maintenance coordinator is reaching out right away, and residents are aware of when and how long something will be expected to get fixed. Just making sure you update them. No news is bad news,” says Coburn.

“It’s important to also important to keep in communication with owners, so they are in the loop. Let the vendors and owners know their needs are being taken care of.”

Ganesan emphasized the importance of practicing empathy as the key to resident satisfaction. If a resident is upset, allow a moment to understand the validity of their pain. 

“If your resident doesn’t have hot water, that’s a big deal. Imagine if your family didn’t have hot water, and you couldn’t give your child a warm bath. So we have to feel the problem too, and even if we can’t solve it right away, we can empathize,” says Ganesan.

Are vendors becoming increasingly difficult to find and maintain relationships? If so, how are you mitigating this issue?

Rodriguez shared that it depends on the vendor’s specialty and trade. 

“Not every vendor works on the same appliance. You have to have a big pool of vendors you can reach out to if you need something. But being able to communicate with them, like meeting for lunch, to know what we can do to gain your business, is key. Having a one-on-one conversation with the vendor is so important,” says Rodriguez. 

Ganesan and Cooley agreed with Vanessa’s statement based on their experience as a vendor. 

“We put a lot of value on our vendor network. We try to connect with the key person of that company, and we are going to train you and set up a long-term relationship with you,” says Cooley.

Ganesan provided a great tip on how to retain vendor relationships. “One of the easiest and best things you can do for your vendors is to pay them on time! Do not make it difficult for them to get their payments. You can see big companies churn vendors because you’re not paying them on time,” says Ganesan.

What percentage of an invoice do you retain from your preferred vendors? Is it different for each vendor?

“Regardless of trade, the percentage of the invoice is the same across the board, at 10%. But, those who don’t want to take part in the preferred vendor program can still work with us,” says Coburn.

Rodriguez shared, “if you are a preferred vendor, we give you the first right of refusal, see if it is something you can handle, and if not, we will go on to the next vendor.”

Likewise, Ganesan expressed the importance of vendors providing value to property managers. “We have exclusivity with their water heaters, we buy them in bulk, we give them a discounted rate. We have a premier rate based on the volume of the order,” shared Ganesan.

How do you maintain quality control of your vendors?

“We have a quarterly meeting to cover our vendors and evaluate each of our vendors. We ask ourselves if this particular vendor should still be working with us or no. We’re starting to formulate grades, where an A we would ask you as a preferred vendor, and C we reevaluate working with that vendor” says Coburn. 

Rodriguez shared that she reviews vendor relationships based on her Property Meld dashboard data.

“We look at data like the time of completion for the vendor and resident satisfaction ratings. Also, I track the number of follow-up calls to vendors that did not perform the repair to satisfaction. Then I can flag to reevaluate in the future,” says Rodriguez. 

The main takeaway = Vendor relationships are crucial.

Cooley concluded the discussion on the importance of vendor relationships.

“The word ‘relationships’ has really echoed in my mind from this conversation. We are fortunate to have opportunities to network between NARPM and several other wonderful organizations within the space. When I first started my business, I was pounding doors. NARPM helped me tap into the property management space,” says Cooley.

Let us show you how to utilize a streamlined maintenance process to achieve successful results in your vendor relationships.