Controlling installation costs
With overheads on the rise this year, control of installation costs is going to be key argues HWL Trade Frames’ Mark Haley.
The window and door industry isn’t immune from the things that are happening in the rest of the economy; Brexit will have an impact – quite what and when, who knows? There has, however, already been a related change: wage price inflation and lower availability of labour.
Manpower is always one of your biggest overheads in any business. According to the latest government figures, wages rose at the fastest pace in nearly a decade in the three months to September. At 3.2%, these represent the biggest rise since the end of 2008.
Whatever your standpoint on Brexit is, one of the impacts of the referendum was to slow migration. With employment also at historically high levels, that has made recruitment far more difficult and wages have increased.
That creates a challenge for us as an installation business; prices remain competitive and your labour costs are going up – that erodes margin.
I’m still not convinced that all retailers always account for installation costs effectively. In our experience time on site is where your margins are eroded as a retailer. It doesn’t matter how many orders you win, if you’re losing margin by losing it in the proverbial wind, then your business isn’t going to be sustainable.
This analysis drove our development of our Timberweld and non-glass-bonded R9 window. We could see what it was costing our customers to fit a traditionally glass-bonded R9 window (we were supplying them with them) and how their potential for margin was being eroded away in the resources and, particularly, the manpower to fit it.
Our use of Timberweld sash-welding technologies in our manufacture of R9 gives us the capability to butt-weld window sashes inside and out, replicating the aesthetic delivered in a 90° mechanical joint.
This also Increases sash corner strength. In most configurations this eliminates the requirement to glass-bond IGUs, which have historically been used in R9 fabrication to give the system structural strength.
This delivers a step change. Not in aesthetics: an R9 Timberweld window doesn’t look any different, so you still get the heritage 90° mechanical type joint, only its welded and stronger. The step change is delivered in installation efficiencies.
Switching to Timberweld R9 can cut installation costs by up to a third compared to buying in mechanically jointed sashes, by reducing weight and simplifying handling.
We’re talking substantial sums. The weight associated with fitting larger glass-bonded R9 windows almost always leads to more manpower, increasing the fit cost. Taking out the glass, a two-team job becomes just a one team job.
That could deliver savings of around as much as £120 per day or £360 on an average three-day install. If you’re paying per window at say £50 per window you could be looking at £500 back on a three-day fit on an average property with 10 windows and doors – that goes straight back on to your bottom line.
However, this is at the current rate of wages, something which has gone up significantly and which is forecast to continue to rise.
Regardless of what happens in the next few months, the market for R9 is going to continue to perform. If you’re buying R9 windows you generally have enough money in your back pocket that Brexit probably has very little baring on your purchasing decisions.
But Brexit – or, more accurately, rising labour costs – is going to increase pressure on retailers. Those increased costs can be avoided altogether by buying in R9 unglazed and fitting it in the same way as you would fit any other window, while buying glass from your usual supplier just down the road.
It’s why each and every single one of those installation businesses that we were previously supplying with glass-bonded windows have switched to, and remained on, R9 Timberweld supply.
Its fully weather tested to BS EN 6375-1 and PAS24/Part Q. It’s not about taking cost out of the product. It’s about taking it out of installation.
The other element to this is that failed units in unglazed product can be replaced as a standard unit. You don’t have to cut it out or replace the sash. Those are strong messages at point of sale.
The single biggest reason to buy R9 unglazed is that saving on cost.
If you take the R9 unglazed fitting saving of up to £500 on a three-day install, roll that out across a month, and build in wage price inflation at 3.1%, you’re looking at a monthly installation savings of approaching £3,500 per month, assuming that those fitting teams are on R9 the whole time.
Total that for the year and you could be looking at savings of more than £41,000. That’ £41K that you could be writing off by buying in R9 glazed.
Now I know the reality is going to be different. Your fitting teams as a retail business aren’t going to be exclusively on R9 but however many R9 installs you do per week, per month, per year, buying in R9 unglazed is going to cut your installation costs and support you in increasing your margin.