The roofing industry continues to have pressure attaining gross profit margins. The competitive environment is, at times, creating undisciplined pricing and volatile swings with roofing contractors bidding on the same project. These factors create uncertainty and confusion in the marketplace. We recommend, to our 75 roofing clients, to take charge of their balance sheets by looking internally for budget enhancements rather than just seeking margins in the field. After the cost of labor and materials, the third largest expense item for most roofing professionals is the cost of insurance. The gross margin pressure makes it increasingly difficult to push the cost of insurance to include employee benefits onto your customers, as a cost of goods sold.
Some roofing companies will offer employee benefits to attract and retain a strong management and support team. They use their benefits program to deter workers from potentially claiming a “not at work” accident on their workers compensation policy, as that could impact their experience modification factor, thus increasing their insurance burdens. When consulting with future clients, we often find that the only time of the year some roofing professionals consider budget reduction strategies is at the anniversary date of their employee benefits program. Quite frequently there are meaningful budget reduction opportunities available if the insurance advisor and roofing professional are intensely focused on a benefits budget reduction strategy.