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Compensation Survey Results

Last fall, we started brainstorming with some of our colleagues in the BuildingEnergy Bottom Lines program about the idea of doing a compensation survey of design and construction firms in our region. We decided to go for it and put together a survey to all BEBL members and HELM clients and colleagues. We sent it out in January 2018 and got responses from a wide range of businesses across the Northeast region, ranging from as small as 1 employee to over 100. We were especially curious to know not only about hourly wages and annual salaries, but also about what kind of benefits our colleague businesses are offering, and how compensation varies by state. The results are finally in - 44 companies participated from VT, NH, ME, CT, MA and NY, and we have collated the responses into a white paper.

 Sample of some of the response data from the compensation survey

Sample of some of the response data from the compensation survey

We learned a lot in the process of trying to collect and analyze this data and hope to do it again and get a larger sample size in the future, but hope this information is useful to our community of design and building businesses as we look at the People component of the triple bottom line: People, Profit and Planet. If you are thinking about employee compensation, we also recommend a great resource in the MIT Living Wage Calculator, which helps you determine what the living wage is for your area.

We'd love your feedback on the compensation survey report and what you'd like to see in the future (post comments below or email them to kate@buildhelm.com).

HELM Named Woman-Owned Small Business of the Year

We are thrilled to announce that HELM has been named the 2018 Vermont Woman-Owned Business of the Year.

From the SBA press release:

Mel Baiser and Kate Stephenson, owners of HELM Construction Solutions, are being recognized by the U.S. Small Business Administration for employment growth, financial success, expansion and community involvement. 

HELM Construction Solutions offers a wide range of services, but primarily works to help small business owners develop their companies and manage the construction of green buildings. With offices in Montpelier and Brattleboro, HELM Construction Solutions has over 50 clients throughout the country that include contractors, designers, institutions, homeowners and business owners.

"As a small but growing business, it is a huge honor to be named Woman-Owned Business of the Year. Our goal is to produce high performing businesses with a "triple bottom line", socially responsible approach and at the same time be part of creating high performance, energy efficient, and low-carbon buildings,” said Kate Stephenson, HELM co-owner. “We are also working hard to help bring more gender equity into the construction trades, which have traditionally had very low representation from women, transgender and gender non-conforming people."

The company was started in 2012 by Mel Baiser, HELM co-owner, as Baiser Construction Management. 

To help get it off the ground Baiser attended the Vermont Small Business Development Center’s Start Your Own Business Workshop taught by Debra Boudrieau. During the workshop, Mel learned about writing an effective business plan, financing options, loan packages, marketing and the resources available to launching a successful business.

In January 2016, Baiser and Stephenson partnered and re-branded as HELM Construction Solutions. Since establishing their partnership, they have grown their client base, expanded their services, opened an office in downtown Brattleboro, and brought on employees. 

"When we initially started this business in 2012 we never fully anticipated the demand. We're now working with over 50 clients across the country on a wide range of innovative projects and helping construction-related business owners balance the priorities of People, Profit and Planet as they grow their businesses," said Baiser. “Part of our mission at HELM is to revolutionize the building process one company and one project at a time. We particularly enjoy working with building owners to help them navigate through the complexities of construction be it permitting, selecting the team, cost planning and scheduling.”

HELM Construction Solutions will be presented its award during the 2018 Vermont Small Business Awards Ceremony cohosted by Vermont Business Magazine in June. The ceremony is open to the public and registration will be available in May.

“I remember when Deb Boudrieau told me about a construction management & consulting business starting up in southern Vermont and how impressive the business plan was,” said Darcy Carter, SBA Vermont District Director. “Now five years later, the owners have taken the company from startup to nationwide. It’s a great success story.” 

 Kate Stephenson, Mel Baiser and Erin Rennoldson of HELM Construction Solutions

Kate Stephenson, Mel Baiser and Erin Rennoldson of HELM Construction Solutions

Social Media 101 for Designers and Builders

These days, the three top platforms I think are successful at helping designers and builders reach potential customers are Instagram (if you take great photos in the field and can upload them right from your phone, this will hit a younger demographic), Facebook Pages (for the 30+ demographic, which is probably most homeowners) and Houzz (folks who are interested in design, and are already primed to be looking for contractors and ideas).  Be strategic—only set up social media if you can commit to maintaining it. A “dead” page can be worse for your brand than nothing at all. Pick the platform(s) that you feel most comfortable with and which matches your target demographic.

Your social media should be the place for frequent updates, process photos, daily musings. Here are a few ways you can generate social media content:

  • Share what you’re working on, especially if it is beautifully designed and crafted, or has a unique feature to it;
  • Share your expertise by writing about topics you care about—whether it’s the latest in building science or how to install a newel post;
  • Talk about your clients (with their permission, of course)—tell a story about how you’re building their dream home, and offer a great testimonial quote with a photo of them in front of their home;
  • Share relevant articles or products you think your potential clients would also be interested in;
  • Profile members of your team to put a face to your company;
  • Give a shout out to a supplier or subcontractor who you want to thank (especially if they have a good social media presence, this can help magnify the reach of your posts if you tag them or use their brand hashtag).
  • Share a great review from a past client (and read our tips on how to generate online reviews)

Goal Setting: To keep your social media presence fresh, for platforms like Facebook and Instagram I would recommend setting a goal to post AT MINIMUM once a week. 2-3 posts a week would be great, but not everyone can do that while running a business and having a personal life. Pick a goal that is reasonable, put it on your calendar, and do it.

Scheduling: without getting into advanced social media techniques, I’ll just say that there is a feature on Facebook Pages called “schedule”. You can queue up a whole week or two of posts at the beginning of the week and not have to think about it again, and still add other posts on-the-fly. To schedule posts in Instagram you’ll need to sign up for a third party app like Later (free) or AgoraPulse (monthly fee, but also manages other social media content for you). These won’t actually post for you, but they will send you a notification/reminder and make it easy to just click and post what is in your queue.

Who: is there someone on your team who is already social media savvy who could manage your company’s social media presence for you? If there’s one designated person, and they know it’s part of their role, and you’ve set specific guidelines and goals, this work is much more likely to actually get done. Let the folks on your crew know who is doing social media, and ask them to send in cool photos or ideas to that person. If you’re going to delegate, define expectations and what the key aspects are to your brand (including what is and what is not OK to post, so they have a little guidance).

Grow Your Network: Once you’ve set up your platform(s) let people know about them! Start following your colleagues, competitors, collaborators, friends and clients. They will often follow you back, and your network will grow. If people are seeing what you do on a regular basis, and thinking about your company, they will be more likely to refer a job to you down the road.

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What Builders Need to Know About Workers’ Comp

Most contractors I know seem to recoil in fear or get very angry when anyone mentions the two words “workers’ comp”. While it’s a topic dreaded by many, as a general contractor you need to know the rules around workers’ compensation in order to make sure you’re in compliance with state regulations. Every state is a little different, so for the purposes of this article we've focused on our home state of Vermont. We’ll break it down into the key information you need to know.

What is workers’ compensation?

Workers’ Compensation provides payment for medical treatment necessary to treat a work injury, and provides wage replacement benefits if the injury prevents the worker from working. However, workers' comp is more than just income insurance, because it compensates for lost wages, medical expenses, and provides benefits to dependents of workers killed during employment. Workers’ comp is regulated by the state Department of Labor and Department of Financial Regulation which require that businesses purchase a policy for the benefit of their employees.

Do I really need it?

If you are a sole proprietor, and you do not have any employees or independent contractors performing work that is an integral part of your business, you’ll need to decide whether you want to purchase a policy to cover yourself (and your subs―see below). Typically, if you as a business owner are injured on the jobsite and cannot work, and you have health insurance, then your health insurance will cover any medical costs. Beware, some health insurance companies will not cover work injuries, so be sure to check with your health insurer. However, you’ll still be responsible for the deductible and you will not be covered for lost wages. For that you’ll need a Disability Insurance policy. There are many flavors of DI―short term, long term, and even Business Overhead Expense (BOE) insurance which can help to cover the costs of your business overhead if you are injured.

If you ever have anyone working for you, even on a temporary basis, workers’ compensation coverage is required for ALL employment, and employers are liable for anyone they hire, including independent contractors and subcontractors if they are deemed employees under state law. If you hire a subcontractor or independent contractor and they cannot supply you with proof of workers’ comp insurance, then you are required to cover them via your policy.

If you are often working as a sub to someone else, you can purchase your own WC policy, and exclude yourself. This will allow you to show proof of WC coverage to people who want to hire you. For construction related contractors in Vermont, the average minimum policy is around $1,100, but this can vary widely from state to state. In this scenario, the general contractor that hires you may still be liable if they control the sub (tell you when to arrive and leave, what to do and how to do it).

But I thought they were an independent contractor?

A company that provides workers’ comp coverage to its employees will need to provide the same coverage to anyone that is hired to perform the work of the business. The Vermont Department of Labor calls this the nature of the business test.  Under Vermont law anyone hired to perform the work or services that the business provides is an employee by law even if you hire them as an independent contractor . The rules and tests the State uses to determine employee status are clearly outlined on the Vermont Department of Labor website under the workers’ compensation section along with numerous examples.  If you hire subcontractors or independent contractors for a job, you need to require that they provide proof of workers’ compensation insurance, otherwise you are legally responsible to provide the coverage and your insurer will charge you for them.  If the independent contractors you hire can pass ALL of the State’s tests of not being employees, then you are not responsible for providing workers’ compensation for them.

Getting Certificates of Insurance from your subs

The first step is making sure any sub who will be issued a 1099 at the end of the year has provided you with a Certificate of Insurance. But you can’t just file it away- you need to look at it! Make sure the certificates show workers’ compensation coverage is being provided. You'd be surprised how many small contractors have general liability coverage but no workers’ compensation coverage. Also check the dates―certificates of insurance must cover the period when the subcontractor worked for you, and should be updated annually for people you work with on an ongoing basis. We suggested collecting this paperwork prior to hiring the sub to do the work. If you have a subcontractor agreement, make sure that carrying liability insurance and workers’ comp is a condition to the agreement.  If you don’t get certificates of insurance, you will be charged for subcontractors by your insurer as if they were your employees both for liability and workers’ compensation coverages.

Getting started with workers’ comp

Unfortunately, when you go to take out your first workers’ comp policy, since you have no history to show, you may be in an “assigned risk pool” which can mean a higher premium, less choice of insurers who are willing to offer you a policy, and possibly being required to pay the whole year’s premium up front. After a few years with no injury or accident, you can graduate to a carrier who offers you a payment plan and more civilized audit processes.

How can I minimize the cost of workers’ comp insurance?

The #1 factor in determining your workers’ comp rates is how your employees are classified. Different types of work have different levels of risk. For example, an office manager or clerical position might cost around $0.40 per hundred dollars of payroll. But on the higher end, a high-risk category like roofing or ironwork could carry a rate of around $25.00 per hundred dollars of payroll. For general contractors it may be useful to distinguish between carpentry and millwork as these categories carry different rates.

Make sure you have set up your payroll reports so that you can break out hours and dollars paid by classification code. If you use QuickBooks, you can set this up under Payroll Items. If the payroll records do not document the hours spent in each kind of work, all the employee’s payroll will go into the most expensive classification applicable. You’ll also need to be able to break out any Overtime from regular wages. A little extra effort in time tracking and documentation could save you big bucks when it comes time for your audit.

Safety is the #2 factor in determining your insurance rates. If you have fewer claims, your rates will be materially lower than if you do have claims. The insurance rate depends upon the employer’s payroll, experience rating and the type of work performed. A work injury can affect an employer’s safety record and experience rating for a 3-year period. Too many claims, and your options for coverage may be limited to the assigned risk pool.

Annual audit

Every year your insurance company will do what’s often called a “premium” or “payroll audit” to review your total payroll after the policy term ends. This can be either in the form of a voluntary audit (a form to fill out and send back in that will adjust your rates for the policy year just ended), or an in-person audit where someone from the insurer shows up at your office to go through all your records. If you are paying more than $10,000 a year for your policy, you can expect to get an in-person visit each year. At that point, you’ll need certificates of insurance documenting that any 1099 subcontractors have their own workers' compensation insurance. If you can’t provide those certificates then you will be liable. This will mean a hefty retroactive payment to the insurance company and higher rates for the coming year.

Another useful tip to prevent surprises at the end of the year is to review your WC policy quarterly against your actual payroll. Then your insurance agent can adjust your payments along the way if you’ve had significant changes in the number of employees on your crew. You don’t want to overpay if you have lost employees, and if you hired a bunch of new positions halfway through the year, you don’t want to be surprised by a big bill after the audit. Some insurers offer a pay as you go system where you pay workers comp premiums each payroll according to actual wages paid.

When you purchase a new policy, make sure you understand up front what their audit requirements will be so you can be sure your bookkeeping systems are tracking all the critical information they will need at the end of the year.

Working in multiple states

If you work in multiple states, workers’ comp can get pretty complicated pretty fast. Each state has its own regulations, and if you are in the assigned risk pool you may need separate policies for each state you work in. And you’ll need to be able to split out your payroll records by hours worked and wages earned in each state.

What about Unemployment Insurance?

So far, we’ve been talking exclusively about workers’ compensation insurance, which is mainly an issue between you, your insurance agent, and your insurance company. But the Vermont Department of Labor is also responsible for tracking down cases where businesses have not been complying with state law regarding workers’ compensation and unemployment insurance (UI). The issue is around who is considered an employee vs. who is considered an independent contractor. The guidelines are different both at the federal and at the state level, and the criteria are different for WC and UI. In short, it’s confusing. (For details, see the Vermont Department of Labor website.) The VT Legislature is currently considering a couple of bills which would help clarify the criteria, so stay tuned for more details on that.

What’s the risk of non-compliance?

A labor department auditor or investigator could show up unannounced on one of your job sites, and a DOL audit could take months to complete, possibly resulting in thousands of dollars of penalties or assessments of past due contributions. An Unemployment Insurance (UI) audit may take considerable time, but a workers’ comp investigation is usually completed in a matter of weeks or months. The workers’ comp penalties are higher than the UI penalties, and are in addition to having to purchase workers’ comp insurance. Why do so many companies take the risk? Businesses can save up to 30 percent on labor expenses by classifying workers as independent contractors rather than employees. The construction industry is under the microscope due to a long history of not correctly classifying employees. The chances are you will have to deal with this at some point, so bite the bullet, make sure all your employees are on payroll, check that all your subs are carrying workers’ comp, and you can be confident you’re in compliance. The other risk is that if no workers’ compensation benefits are received, there’s no limitation on the injured worker’s ability to sue your business for whatever damages the court will award as well as your being responsible to pay all the benefits the worker would have been entitled to under workers’ comp. You might be trading immediate savings on your workers' compensation premium for exposure to legal damages which could easily exceed the normal general liability policy limit of $1,000,000. And if an employer has no workers’ comp and a worker is injured, the employer is personally liable to the employee for medical benefits, wage replacement, and any permanent disability caused by the injury.

But my workers want to be considered subs

Often employers will say that their workers are unwilling to go on payroll as employees. They prefer the higher hourly wage they can get as a subcontractor. We will often use our Labor Burden Calculator to show employees that their total income is often higher as employees since they do not have to pay self-employment taxes and insurance, and as employees they are often eligible for paid vacation, sick time or other benefits. If they still insist on being considered a sub, make sure you’re calculating your cost to cover them under your workers’ comp (if they don’t have their own policy). In addition, make sure that you have a contract for each job, that they submit invoices for work completed (not hourly time sheets), and that you can prove that they also work for other contractors, that they are highly skilled and not supervised by you, make their own hours and use their own tools. Contracting only with subcontractors who have formed a business entity such as an LLC or corporation is a good way to protect yourself against an assessment for unemployment insurance taxes as the result of an audit.

At the end of the day

Navigating the world of workers’ comp is complex and can be aggravating and expensive. But once you understand the rules of the road, you can set up a system that protects your employees and your business. As more businesses in the construction industry come into compliance, it will mean a more level playing field for all of us.

For more information:

https://vtdigger.org/2017/06/27/high-court-widens-pool-independent-contractors/

 

Disclaimer

This blog post is based on research and interviews with a variety of insurance providers, general contractors, and state of Vermont department representatives. HELM cannot be held responsible for the legality or accuracy of this information, as it changes over time and varies from state to state. For detailed information relevant to your state, please contact an insurance agent or legal professional.

Developing Your Company’s Online Reputation

Managing your brand online may feel like one more task on top of an already full plate, but these days even if you’ve gotten good word-of-mouth recommendations, the first thing a potential client is going to do is search your business name online. You need to make sure you make a good first impression, or it’s likely they will never pick up the phone to call you. Don’t be afraid to take a hard look at your current marketing strategy and re-direct your time and effort into digital marketing.

Website Tips for Architects & Builders

Lots of our clients have been meaning to update their website for months...or even years. It is one of those things that never makes it to the top of the to-do list, yet in this day and age, if clients can't Google you (and your website isn't mobile-friendly) then your business is at a disadvantage. We came up with a few tips to make your website effective and attractive to prospective clients.

 Nice lighting, bright colors, no clutter. Image courtesy of  Tim Matheisen  and  Mathes Hulme Builders

Nice lighting, bright colors, no clutter.
Image courtesy of Tim Matheisen and Mathes Hulme Builders

1.       Pictures are worth a thousand words. Don’t put any picture up on your website that is not high resolution and well-lit, or doesn’t show your best work. As much as you might geek out on process photos and showing projects you’re currently working on, most clients want to see the finished product—the eye candy. If you do put any action photos up, make sure they pass an OSHA sniff-test (no crazy ladder hijinks, everyone wearing proper PPE). It’s better to have 10 awesome photos on your site than 100 mediocre ones. Invest in professional photography, and if you can’t afford that, you can take decent photos on an iPhone but you need to stage each photo with intention. That means no clutter, great lighting, a few nice props to bring color (flowers, a bowl of apples, a bright tea towel).

2.       What do you do? This is your opportunity to show how and why your business is unique. Show the kind of work you WANT to be doing, not just what you ALREADY have done. For example, if 50% of your jobs are roof replacements, but what you really want to do is kitchen remodels, then show pictures of kitchens and don’t even mention roofs. If you have special expertise, certifications or licenses, this is the place to mention them.

 Wouldn't you want to hire these friendly folks? Image from the Byggmeister website.

Wouldn't you want to hire these friendly folks? Image from the Byggmeister website.

3.       Who are you? Clients are attracted by your business brand, but typically they associate the business with YOU, the business owner(s). Make sure you have a section on your website with your photo (a nice head shot, where you look professional and people can see your face). If you want to show you still wear a toolbelt, then get your gear on, but this is not necessarily the place for an action shot. You want people to recognize you and perceive you as trustworthy.  It’s also great to show your team—often clients are curious to know whether you’re a one-woman operation or have 3 crews running at a time. It can be hard to keep an up to date roster of all your employees current on your website, but take a nice group shot at your annual company picnic and update it on your site every year. In a larger company, you may want to include bios for your management team if they are the ones that will have a lot of client contact.

4.       Location, Location, Location. One key thing many builders forget to put on their website is their service area. This may be less critical for architects, but often clients are looking for someone local to them who they can meet with in person throughout the design process. Include a little map showing where your past projects have been located, and talk about the region or towns that you work in (this will be key for SEO or search engine optimization). Think about all the ways someone might want to Google your area, and include all of them in your website text. Here’s an example, with a bit of overkill: “Serving the Pioneer Valley of Massachusetts, with offices in Northampton, Springfield and Amherst, our clients range all along the Connecticut River Valley of MA.

5.       Keywords. Close your eyes and brainstorm the first 5 words you want someone to think of when they think of your company. Rattle off a bunch of ideas—get your team involved—and then refine down to 3-5 keywords that define your company. Then look at how to use these frequently in your website text, in as many different ways as possible. Being consistent and repeating yourself is OK—it helps build your SEO.

 Lewis Creek Builders includes a great  infographic  on their website showing the design-build process.

Lewis Creek Builders includes a great infographic on their website showing the design-build process.

6.       Process. Here’s your opportunity to talk about not just WHAT you do, but HOW. For a potential client thinking about designing and building a home, it’s almost always their first time going through this process. Explain how you work in clear and simple terms. Describe the steps from the first inquiry to the handover of the keys and how you will provide them with expertise and information along the way. Again, this is a place where you can really distinguish what you do from the rest of the pack.

7.       Making Contact. Your contact info should be super clear—I like to always put it in the footer so it shows up on every page. Create a contact form or just get your phone number and email up there. Be professional and get a business email address (ex: jose@betterbuilders.com not fuzzybunny7869@aol.com). Make it clear who the primary contact should be for inquiries, and name that person. If you are a business with multiple partners, decide who the best point of contact is and list only their phone number (ideally the person who is most comfortable with sales AND has the capacity to return these inquiry calls within 24 hours of first contact).

8.       Updating Social Media. Your website should include clear links to your social media platforms. But if you’re not going to update them frequently—don’t bother. There’s no point in creating a Facebook Page for your business if you are only going to post something there once a year. In fact, having a “dead” page can actually hurt your brand. Pick your preferred platform(s) and stick with them until the tide changes and you need to adapt to the latest thing.

Has building or updating your website been on your to-do list for over 6 months? If so, HELM can assist you with moving the process along. Check out Mathes Hulme Builders and TurningLeaf Housewrights for two examples of recent projects, and stay tuned, as we have a few more sites in the works. With our experience in the building industry, a strong design aesthetic, and excellent writing skills, we can help you get a professional website up efficiently and affordably.

Breaking Down Gender Bias: A Toolkit for Construction Business Owners

Here at HELM one of the issues we've been focused on is how to pave the way for more women, transgender and genderqueer folks to enter the building trades.

The construction trades have long been one of the industries with the lowest percentage of women in the workforce – as of 2015, less than 3% of workers in the Construction and Extraction trades were women. Data on the percentage of Lesbian, Gay, Bisexual, Transgender and Queer (LGBTQ) workers in the trades is not available. However, it is clear that many women and LGBTQ workers face bullying and discrimination as a result of sexism, homophobia, and transphobia in the workplace.

So we developed a Toolkit! Our goal in developing this Toolkit is to offer an array of suggestions and solutions to help small business owners and managers break down gender stereotypes and create companies that are inclusive of all genders and sexual orientations. We recognize that many other kinds of discrimination happen in the workplace- including but not limited to race, class, ethnicity and ability- but this Toolkit is specifically focused on gender discrimination.

This toolkit was developed with help and feedback from many of our colleagues in the building trades and social justice movements. We recognize this is just a first step towards raising awareness of these issues in our industry and our workplaces, but we felt the need to start somewhere.

If you have feedback on the Toolkit, ideas to share, or suggestions for additions, please email kate@buildhelm.com. We look forward to developing this Toolkit as a living document. Please share it widely!

Download the PDF: Breaking Down Gender Bias: A Toolkit for Construction Business Owners