Following the money to understand lifecycle costs, incentives, and unintended consequences.

In the series of columns exploring the U.N.’s Sustainable Development Goals, I wrote about the labor shortage facing the HVAC&R industry and how this is set to get much worse over the next ten years (“Quality and Equality,” ASHRAE Journal, December 2021). This prompted a correspondent to email me with an observation that reminded me of that great Paul Simon lyric: “‘The problem is all inside your head,’ she said to me. ‘The answer is easy if you take it logically. I’d like to help you in your struggle to be free.’”

The solution, I was told, was simply to pay higher wages and attract more people into the jobs market. On the face of it, this is obviously correct, but as you dig into it there are three significant problems.

First comes the need to extract a sufficiently high hourly rate from the client to be able to afford to pay higher wages to staff. This is difficult when the true worth of a job well done is not appreciated. The client’s top priority is just to make stuff cold and keep it that way. Plenty of people are capable of this, but that’s without addressing the second and third priorities, which tend to add cost to the job: keeping the system efficient and keeping it safe. In fact, I’d place these priorities in reverse order: safe; efficient; reliable. Too few clients see it this way.

Second, there are plenty of alternative vendors willing to offer short-term reliability at a very low hourly rate to their client. This makes it difficult to break the mold by offering a service that properly addresses priorities one and two as well as three. Of course, everyone pays lip service to safety and efficiency; however, many clients are not sufficiently tech savvy to realize that they are often being shortchanged on these two vital topics.

Finally, there are plenty of parallel career paths for technicians where employers are willing and able to pay wages that match or even exceed the levels achieved in HVAC&R because the reliability of the system they service is seen as more important, but it doesn’t carry the same safety or efficiency challenges. Making comparisons between different labor markets is always difficult. Working in HVAC&R is complicated and requires specialized knowledge and skills. This ought to make it a desirable path to higher salary potential, but instead it creates a vocational niche where staff seem to be expected to do it for the love of the job, not the money. In this sense it is a bit like nursing, teaching, health care and even professional music (at least for the majority of orchestral players and session musicians). It is fascinating to see how the COVID-19 pandemic has changed the way we view and value these vocational professionals, but this has not translated so far into a raise in wages for them.

In HVAC&R we are stuck in a cleft. We can’t raise salaries to attract the brightest and best because we will be undercut by a low-rate, low-skill competitor. We can’t raise skill levels because that will be a barrier to entry, and we already have a labor shortage. We can’t raise client expectations because we don’t have sufficient skilled staff to serve them. We need a new business model, perhaps one where the service provider participates in the benefits of the system being safe and efficient as opposed to the current model that, it could be argued, rewards the service provider with more work if the system is unreliable. Any suggestions?

Clint felt undervalued but didn’t know what to do about it.