The Urethane Blog

Roofing Case Study

Brad Beldon leads his roofing company through ‘double whammy’ of labor shortage, broken supply chain

Richard Webner, ContributorFeb. 23, 2022Updated: Feb. 23, 2022 8:28 a.m. Comments

Jodi McCue and Brad Beldon pose Wednesday, Feb. 16, 2022 outside the Beldon corporate headquarters. The Beldon companies recently launched Ozbee Team Software, a construction software platform built on the Salesforce CRM services, with McCue as the Vice President of customer experience and Beldon as the CEO.
Jodi McCue and Brad Beldon pose Wednesday, Feb. 16, 2022 outside the Beldon corporate headquarters. The Beldon companies recently launched Ozbee Team Software, a construction software platform built on the Salesforce CRM services, with McCue as the Vice President of customer experience and Beldon as the CEO.William Luther, Staff

Brad Beldon, CEO of Beldon Roofing, describes the challenges facing the construction industry as a “perfect storm.”

For decades, the industry has struggled to find workers. The COVID-19 pandemic only made it harder. Now, with the global supply chain broken, companies can’t get the materials they need, or can get them only at inflated prices.

Beldon is not without ideas about the problems. He’s sent letters to President Joe Biden and members of Congress suggesting measures to alleviate the crisis, such as expanding the H-2B temporary worker program.

“You have the supply chain crisis hitting at the exact same time that labor became a crisis,” he said. “COVID took more labor out of the equation and then it shut down factories. When they shut down factories, they can’t get capacity back up. So there’s no inventory and if there’s no inventory it’s just-in-time, and just-in-time is, ‘Everybody needs it today.’”

The homepage for Ozbee Team Software, developed by Beldon Roofing to provide a one-stop shop for construction companies.
The homepage for Ozbee Team Software, developed by Beldon Roofing to provide a one-stop shop for construction companies.ozbee.com

And Beldon and another executive at his company, Jodie McCue, recently launched a software business, Ozbee Team Software, aiming to provide a one-stop shop for construction companies to do their scheduling, accounting, inspections and communicate with employees and customers, among other things.

The software was developed to help Beldon Roofing operate smoothly, but Beldon and McCue said they came to realize they had a product other companies might be interested in.

Ozbee, which operates on the Salesforce cloud platform, was launched earlier this month at the International Roofing Expo in New Orleans. Since then, Beldon and McCue have received more than 100 inquiries, he said. It is undergoing a security review from Salesforce before it can be released on the platform.

Beldon previously launched a tech startup called Roof Monitor, offering sensors that would help property owners protect their roofs from the effects of bad weather. The concept didn’t work because the technology was too pricey, he said.

“What we learned from that business was we built a product that would only work the way we wanted it, because we thought we were right,” he said. “We built Ozbee to work the other way — we give you the engine, and you tell us what you want to do with it. That was a very valuable lesson learned — a very expensive lesson learned.”

Beldon recently sat for an interview to discuss Ozbee, the supply chain breakdown, and why young Americans aren’t entering the construction industry. The following has been edited for brevity and clarity.

Q: Could you describe what you’re dealing with now with the supply chain?

A: It’s unprecedented. We have zero transparency. The inflation is just outpacing everything. I think there was an article that I read today — construction costs this year are up 23.6 percent or something like that, year over year, which is just mind boggling. I’ve been doing this for 35 years and to see it even climb 2 percent or 3 percent in a year is really odd.

I don’t know how it ends. There’s four main components to commercial roofing: You got your insulation, you got cover board, membrane and a method of attachment. The method of attachment, generally speaking, is one of two things: It’s a mechanical fastener or an adhesive. That adhesive comes in a steel container, so with the worldwide shortage of steel both aspects of attaching a roof you can’t find. Even though you can get the adhesive — maybe you can get the adhesive, but it’s made with MDI (or, methylene diphenyl diisocyanate), and MDI is the other shortage.

So you have a double whammy. That product that we used to see for $300 is now $1,400 and it was historically $300 since the day that product came out. A lot of the MDI is still stuck out in the Pacific, can’t get into here. There’s five truckers per every 100 truckloads of demand.

Q: What do you mean when you say zero transparency?

A: There’s zero transparency on deliverability, zero transparency on pricing. The customer is the one that’s suffering, right? They think we’re being elusive and yet we don’t have the answers. I wish we could! If we told him what we knew they’d be laughing like, “Yeah, right. That’s how you’re operating your business?” Like no, really, that is how we operate. We have no idea.

Q: How have you coped with that?

A: We had to make some difficult decisions. We laid off some employees, we reduced benefits.

Q: When did that happen? How many did you have to lay off?

A: The last quarter of 2021. Eleven. It’s hard. We’ve tried hiring them back, some of them, as business has picked up and some of the chokehold has a gotten a little bit better, but we still can’t fill every position. I mean, our backlog is the largest backlog we’ve had in the history of our company, and we can’t do the work.

Q: What other materials are you having trouble with?

A: Single plies are a large component in the roofing industry. They’re manufactured with resins, and most of the resins come from overseas. The MDI issues that you read about are from the freeze from February in South Texas. That was one of the largest MDI suppliers in the world, and I’m not sure that any of them are back up and running. We’re all trying to find that 1 percent of the MDI that’s left in the world and grab it.

We’ve seen labor increase over 20 percent in this market in a year. So we’ve seen materials go up, labor go up by over 20 percent. Inflation, at some point, is going to stop this, in my opinion. At some point, people are going to start saying “I can’t afford that anymore.”

Q: Tell me more about the labor issues.

A: The labor force is on the higher end — they’re closer to my age, in the late 50s. You don’t see the 20 year olds wanting to enter the construction industry. It’s not a “wow” industry, right?

It pays very well. I mean, we have roofers making six figures. Now, it’s dangerous. It’s hot, it’s dirty, it’s difficult, but it’s a really good income with no debt. These kids go to college for whatever job, where someone comes out and makes $40,000 a year with $200,000 in debt. How do they ever get get caught up?

Q: What could we do, as a society, to avoid these problems?

A: You want to write a book together?

On the labor side of things it’s an easy solution. They have a program, the H-2B (guest worker) program, that’s already on the books. It works, it’s effective. They contribute to Social Security and they don’t take anything out. That’s an easy fix to solve the labor problem in the United States because you can take the 66,000 workers that you allow to come in every year from around the world and make it 2 million, 3 million, 5 million, whatever that number is — the system’s already built. If you fix that problem then I think you might be able to fix the trucking problem. And then if you can get more people in the plant, then you can work three shifts instead of two, and produce more product.

Q: Why aren’t younger Americans going into the roofing industry?

A: I think it’s twofold. When I grew up, we had technical schools inside the high schools. You had the opportunity to go learn the trade. They don’t exist anymore, because what they want are these high-paying computer jobs, working for Facebook and Google.

And I think the construction industry is frowned upon as, it’s dirty. We’re a little bit above used car salesmen in the construction industry. But that doesn’t mean that we don’t run professionally operated businesses, and that we don’t care for our employees, and that we don’t offer them benefits that aren’t found at USAA and Valero — they just don’t know it! Because we don’t have the money that we can go out there and advertise, “Hey, we pay for your health care. We have a 401k.” Most of construction are family businesses — it’s just the nature of construction.

Q: What are your strategies for finding people?

A: We have a full-time HR director, he’s out there looking every single day. We do job fairs, we’re on all the ZipRecruiter, everything. We have a sign that’s been out front for 20 years about hiring. And then when they see the E-verify, or they see we drug test, you actually watch them walk up to the building, and they read the sign and turn around and leave — they don’t even walk in! You have to ask yourself why.

Q: Moving on to Ozbee, is there any product like that on the market right now?

A: Not that we’re aware of. (Before developing Ozbee) we were using five (customer relationship management platforms). And entering the data in manually, in multiple systems that couldn’t talk to each other. The Salesforce platform is so unique in that everything is right there on your screen and available to you instantaneously.

What we’ve learned, also, through COVID: Analytics drive construction more and more today, even than they did even two years ago. Just the amount of time it takes to nail a board or to paint a wall. I mean, there’s data out there will tell you, to the second, how long that should take — that data didn’t exist two years ago, or three years ago, and they’re perfecting it. We built Ozbee in a manner in which, if you create a field, we can measure off of that field. We don’t care what you want to measure. If you want to measure how many black jackets were worn that day, and how many yellow jackets were worn that day, I can tell you every day as long as the data is in there and I can give you trends. Everybody operates their business differently, so we want to give them the flexibility that they didn’t have to just buy a box and operate within that box — they can buy a box where they can tear down the walls, do whatever they want with the walls, and the box will work.

https://www.expressnews.com/sa-inc/article/Brad-Beldon-roofing-company-16939194.php