How Retrofit Labor Outsourcing Can Help Small Companies Manage Large Projects

Tim Donovan | Sep 11, '19

How Retrofit Labor Outsourcing Can Help Small Companies Manage Large Projects

There is no shortage of work for lighting retrofitters. Labor, however, is another matter.

The demand for retrofits – whether individual lighting projects or as part of broader energy conservation initiatives – is growing by 9 percent annually as LED technology becomes more efficient and cost-effective. And yet, 91% of contractors, construction managers, builders, and trade contractors struggle to find skilled workers – and half expect the problem to get worse.

Many retrofit companies rely on outsourced labor to extend their reach and scale rapidly as their business opportunities skyrocket. But not just anyone can fill these roles.

In the retrofit business, our labor needs go beyond construction. We also need people to conduct audits, to manage projects, and to serve as experts in lighting controls and the emerging internet of things.

At Donovan Energy, we run lean. By employing a small in-house team and outsourcing construction and other functions to trusted partners, we’re able to compensate for a fluctuating market. Our low overhead allows us to deliver projects at costs 30% to 40% below our competition.

From the perspective of our clients, however, our outsourced vendors are indistinguishable from our internal team members. Our chief operating officer puts a lot of time into ensuring our contractors deliver the same level of quality and professionalism as our full-time employees. This is critical, because if a contractor takes shortcuts – rewires a fixture hot, for example, gets shocked and falls off a ladder – a client will associate that with Donovan Energy.

A Retrofit Labor Outsourcing Success Story

In 2017, we were asked to formulate a proposal for a massive lighting retrofit project at the Cincinnati Zoo & Botanical Garden. The task required auditing 87 buildings on the zoo campus, plus all the outdoor lighting.

Typically, members of our sales team perform lighting audits. But with the Cincinnati Zoo opportunity, we realized the sheer amount of space to be audited would take two of our sales reps offline for a week.

We turned to our lighting audit software vendor, SnapCount, for an assist. SnapCount introduced us to an experienced auditor (and fellow SnapCount user) Lewis Hughes, the CEO of Innovative Lighting Auditors, located in Southern California.

You may think we would be apprehensive about outsourcing an auditor. If his numbers had been inaccurate, it would have been on us to clean up. But we had no misgivings about Lewis; he had received the StreamLinx seal of approval, and that recommendation spoke volumes to us.

Lewis told us he could complete the audit in six days. He came in on a Sunday night. By the next Saturday afternoon, he was done. To this day, I hold up Lewis’s audit as the gold standard. He was efficient and thorough, not missing a single relevant field in SnapCount.

As far as the Cincinnati Zoo was concerned, the transition from our sales team, to Lewis, to our construction crew was seamless. We turned the audit around quickly, and we were able to retrofit all the buildings at the zoo. As of this April, we finished the penguin house, making the Cincinnati Zoo the first 100% LED zoo in America.

3 Takeaways on Outsourcing Retrofitting Labor

What have we learned from our experiences finding and working with professionals like Lewis Hughes, who we can rely on to represent our company’s values to clients? Here are three of the guiding principles that have helped us build a network of rock-solid contractors.

1. Quality Is Key

If I sell a job at $100,000, and I have a choice between an installer that charges $30,000 and one that charges $60,000, I’d be more inclined to pay the $60,000. Why? Because I’ve learned quality pays for itself.

If the more expensive installer helps my company get the job done on time, and without mishaps, my company may be asked back for 10 more projects. To me, that’s worth an extra investment up front.

In the case of Lewis and the Cincinnati Zoo, it was helpful to have a trusted source (the experts at StreamLinx) vet the contractor for us. But we don’t leave quality to chance. We deploy project managers to all our worksites to maintain our relationship with clients and to ensure the job is done to our expectations.

2. Don’t Relax Your Standards

I know we can be demanding with our contractors. But our regular partners also know it’s worth their while to meet our standards. They’ll make more money with us than with any other firm.

Our project managers all have their favorite contractors, and most contractors work hard to maintain their privileged status. I personally have regular check-ins with the owners and executives of the companies we work with. Some of them are proactive, coming to us for feedback.

When it comes to finding reliable labor, we’ve kissed our fair share of toads that didn’t turn into princes. But fortunately, our model allows for flexibility. If a partner isn’t delivering, there’s three dozen more out there to give a chance to.

3. Develop Your Industry Connections

We all know how important networking is when you’re looking for a new job. The same thing goes when you’re the one doing the hiring. Competent, experienced people tend to have well-developed networks of industry connections.

We found Lewis Hughes because both he and our company have good relationships with StreamLinx. I find that involvement in professional organizations and sustainability groups creates connections that can lead to business and partnership opportunities.

Here in Cincinnati, our involvement in Green Umbrella has been invaluable for us. Green Umbrella is an alliance that brings in corporate leaders, companies like Donovan Energy, and anyone else interested in sustainability, such as local graduate students.

I will always accept an invitation to sit on a panel, talk to a high school class, or meet with the sustainability team of a Fortune 500 company. If I have a chance to talk to people about our vision for sustainability, energy, and clean energy, I’ll take it. You never know where it will lead.

AspirEnergy - SnapCount - Retrofit Case Study

Tim Donovan

Written by Tim Donovan

Tim Donovan has dedicated his entire career to energy management and optimization. His expertise spans financial modeling, investment strategy, budget development, planning and corporate structure. Tim has played a key role in several clean energy and sustainability industry "firsts,” including the first net-zero energy aviation facility (Hangar 25 at Burbank International Airport), the first LEED-rated gas station (BP's Helios House) and the redevelopment of several buildings incorporating sustainability and energy concepts. Prior to founding Donovan Energy, he held several global leadership roles in the U.S. and the U.K. with British Petroleum (BP). He also advised the world’s largest companies and several venture capital firms on the profitability of clean technology while serving as managing partner at John Picard and Associates; and founded and ran an energy finance business in London. Tim holds a Bachelor of Arts from John Carroll University and a Masters of Business Administration from the Weatherhead School of Management at Case Western Reserve University.

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