According to the most recent numbers from the Bureau of Labor Statistics (BLS), there were close to 666,900 electricians working in the United States in 2016. With a projected growth rate of 9%, if the experts are right, that means the industry will add 59,600 jobs between the years 2016 and 2026. How does this growth for the electrician profession translate into the real world, especially when recruiting, hiring, and retaining electrical professionals has become such a challenge amid the reality of a skilled labor shortage?
Workiz field service management software recently released a study on the connection between price per job and cancellation rate for electricians in the United States, specifically looking at the time zone, city, and state they worked in as well as their price per job and cancellation rate. The study analyzed 300,000 electrician jobs performed by 1,500 Workiz users over the past six months. The results were surprising.
Regional Differences
The data revealed the average price of jobs is highest on the West Coast ($226), while cancellation rates are at the lowest (31%). Compare that to the East Coast, where the average price of jobs is significantly lower ($195), but cancellation rates are high (43%) (Fig. 1). Although there are some exceptions, this pattern is also seen when looking at individual state (Fig. 2) and city data.
The survey data also revealed that prices and cancellation rates can vary greatly between electrical contractors in the same city. Take San Diego, for example. In this city, electricians charge an average of anywhere between $93 to $418 for a job. Again, we see the lower the cancellation rate, the higher the average job price. A company charging an average price of $418 per job has a 28% cancellation rate, whereas a company charging an average price of $193 per job has a 36% cancellation rate, and a company charging an average price of $93 per job has a 43% cancellation rate (Fig. 3).
The fact that we see the same behavior at every level (time zone, state, city, company, etc.) suggests that there’s a firm correlation between average job price and cancellation rate. Moreover, the variation in cancellation rates between competing companies (within the same city) tells us these rates aren’t set in stone. They can be improved.
So how can you make sure you’re on the right side of this equation? Here are some practical suggestions on how to improve the cancellation rate for your business that you can implement immediately.
Ways to Lower Your Job Cancellation Rate
You can only improve what you measure. Thus, your first step is to determine what your company’s cancellation rate is. Next, you need to determine why your potential customers are cancelling jobs. Are there any patterns?
If your business uses a dispatcher, it’s important to make sure he or she is trained to clearly understand customer issues and the actual work that needs to be performed. Sending an electrician with the wrong skill set — or the wrong parts — can result in a cancelled job. This is where well-trained dispatchers are worth their weight in gold. They can help make sure to get it right the first time by sending an electrician with the relevant skill set to the job.
Maybe you have too many potential customers cancelling appointments because they forget to make themselves available at the scheduled time. Customers are forgetful — just like the rest of us. If a customer has a scheduled appointment with you, send them a reminder before their appointment via text message. This will reduce the chance that they’ll somehow forget about their appointment, costing you time, money, and aggravation.
One of the main pain points customers report is a lack of communication with their service contractor. When you send electricians to a job, make sure they call the customer as soon as they are on their way. This eliminates the stress of customers wondering whether someone is going to show up at the right time to fix their problem. Running late to a job? Hey, it happens. Be sure to communicate all delays to your customers with a quick text message or call so they don’t feel forgotten.
We’d all like to think that customers judge us on our technical skills. Unfortunately, that’s only partially true. When customers go on Yelp, they’ll often comment on how professional an electrician looked and acted. Appearance matters. If you’re coming to a customer’s home, it’s important to look professional and demonstrate trust by wearing a uniform, name tag, and showing up in a company vehicle with your business logo on it. All of this goes toward creating customer confidence and reducing job cancellations.
Technology can also instill confidence. When you come to a job armed with a tablet or cell phone with digital invoicing capabilities, you’re showing your customers that you are a high-quality contractor that embraces the latest advancements in technology. It also aligns with the quality of service they’re expecting.
Sometimes it’s not your customer; it’s your electrician. Too many cancelled jobs, especially from a certain electrician, can be an indicator of a personnel problem. Tracking job cancellation rates per employee can help you identify individuals that might be struggling.
By reducing your cancellation rate, you’ll be able to successfully charge more per job and increase your revenue. You’ll also be able to reduce your overall business overhead (i.e., costs of administration, employee time, gas expenditure, missed jobs, etc.).
Azaria is the CEO of Workiz and a co-founder of Sisense. He can be reached at [email protected].
