Here’s something you don’t hear people complain about much these days: worker shortages. That is, unless you’re in energy efficiency, an industry that is booming as others are busting.

Sixty percent of those responding to a recent survey by the Association of Energy Services Professionals (AESP) cited a lack of talented workers in energy efficiency.

“Energy efficiency is a rapidly growing segment of the overall energy industry and we believe there is a clear lack of talent that is necessary to fill the positions that are open,” said Meg Matt, the AESP president and CEO.

So where do you find these jobs?

Another recent report, this one by the Brookings Institution and Battelle’s Technology Partnership, sheds some light. Look to major metropolitan areas and young businesses for jobs not only in energy efficiency, but also in other segments of the clean economy, according to Sizing the Clean Economy: A National and Regional Green Jobs Assessment.

In the midst of the worst economic downturn since the Great Depression, the clean economy expanded by 8.3 percent, says the report. Efficiency, renewable energy, biofuels and other clean industries accounted for 2.7 million US jobs in 2010. To put that number in perspective, that’s more jobs than you’ll find in fossil fuels or biosciences, but still less than information technology.

Green jobs in general, and green construction in particular, were clustered in 100 large metropolitan areas. About 73 percent of the nation’s LEED certified green buildings are in these cities. Raleigh and Seattle have strong green architecture and building sectors. The energy saving/ building materials industry is thriving in Houston and Minneapolis. Boston excels in HVAC and building control systems, according to the Brookings/Battelle report.

The findings are in keeping with U.S. economic geography. The 100 largest metropolitan areas “are the nation’s innovation engines,” responsible for 78 percent of the US’ green patents. Further, most of the “highest-impact” U.S. cleantech firms called out in the 2010 Global Cleantech 100 list are based in these cities, particularly Boston, San Francisco, San Jose, and Los Angeles, said the report. In all, the 100 biggest cities created three-quarters of the clean economy jobs from 2003 to 2010.

“In short, metropolitan areas, large and small, are now and will increasingly be the nation’s critical centers of clean economy talent, innovation, and finance and so its top hubs of commercialization, deployment, and trade,” the report said. “Regions and metropolitan areas, in short, are not a part of the national clean economy; they are that economy.”

Looking at broader regions, it’s not surprising to find California and the West responsible for the most clean economy jobs, when measured as a percentage of total employment. About 2.2 percent of the jobs in the West are related to the clean economy. The Northeast comes in second at 2.1 percent, followed by the Midwest’s 2 percent and the South’s 1.8 percent.

What kinds of businesses produce clean economy jobs? The young upstarts – or at least they’re responsible for the recent mercurial job growth.

Here’s how Brooking/Battelle explained this phenomenon. “Old establishments in the clean economy (those born before 2003) created an average of just three jobs for every one establishment from 2003 to 2010 while new establishments created 37 jobs. This compares favorably to new establishments nationally which created just 10 jobs per establishment over the same period.”

How much do these jobs pay? Quite a bit.

Brooking/Battelle found that clean economy jobs pay about 13 percent more than typical US jobs, and have a median wage of $44,000. AESP said 80 percent of those who responded to its survey cited vacant jobs in energy efficiency with salaries of $50,000 to $100,000 and 28 percent said jobs were untaken at salaries of $100,000 to $150,000.

So spread the word. Not all the economic news is gloom and doom. Energy efficiency and the clean economy are hiring.

There once was a time when you thought that if you were the best at sealing ducts, sealing the shell perfectly, or blowing the best insulation, you would be guaranteed success. But, little by little, job by job, you began to realize that it’s difficult to get your clients to pay the kind of money you need for the quality work that you do.

I’m passionate about the need for contractors to systematize their estimating. I’m also passionate about the need for a selling system in your business. In fact, I think that the three most important systems in your business, in order of importance are; estimating, sales and marketing. If you’re like many contractors, these are the three areas you hate most and try to ignore whenever possible.

A quick and accurate system of estimating is essential for the sales and marketing systems to work. Whether you use historical data, purchase data on costs in your area, or use a combination of the two, your estimating system should give you the capability to generate specifications, contracts and any other paperwork necessary to sell the job during your first visit with the client in most instances.

Unit Cost System

These days, we may find ourselves looking more closely at those little jobs we may have avoided when we were really busy. Using Unit Cost Estimating provides the speed and simplicity we need for small jobs. The unit cost system is easily understood and allows us to expect consistent results on every job. We can train others to estimate more easily too. For estimating purposes, a unit cost system is best explained as an organized way to price any material or activity in standardized units of measurement, for example; square $/(SQ), square foot $/(SF), linear foot $/(LF), cubic foot $/(CF), cubic yard $/(CY), Each $/(EA), Pair $/(PR), united inches $/(UI) or any combinations-- EA plus $/SF, LF, other.

A sticks and bricks method isn’t practical here, as neither the homeowner nor the estimator can spare the time it would take to create a material list, call for quotes, and then calculate prices. The unit cost system of estimating for small jobs is based on a database loaded with pricing for such activities as; replacing a window, installing a French drain, dense packing the walls, blowing insulation in the attic, sealing the shell, replacing the storm door, and much more.

Unit Cost Estimating is used by most trade contractors. Your roofer quotes a price per square (SQ) (100 sq. ft. = 1 SQ) including felt, nails, tin, flashing, delivery, stocking, and cleanup, for example. Important Point!--unit pricing is not applied to the entire project, but rather to each of the individual activities and/or products, like the roof covering. We can determine accurately what a project costs in dollars/sq. ft by looking at all of the components in small units (sidewall insulation that costs $X/sf) and then adding up the results. There are sources who publish numbers for remodelers nationwide that are easy to use. You can also create your own database from historical information. Or both! I prefer the database from RemodelMax (see more below) because the numbers for material and labor are more realistic for remodelers who inherently are more inefficient in terms of both time and materials than homebuilders. RemodelMax also includes man-hours for each item, a big plus.

Beware! Most of the databases available relate to new construction, which goes faster and experiences less waste.

Companies on the leading edge have equipped their field personnel with laptop computers, portable printers and credit card processing capabilities. A popular routine is for the estimator to visit with the prospect and tour the job site before retiring to the pickup with laptop and printer. The cell phone can be used discreetly from the truck to contact office support staff about those unknowns that pop up during the estimating process. Having the capability to email a digital photo of the home and share any questionable conditions with another set of eyes can be a big plus at times. The advantages of “on the spot” estimating are too vital to ignore for small jobs when a second trip to get the order is not economically feasible.

Your unit cost system of estimating could be a worksheet of repair activities organized with columns including materials, labor, total, even man-hours required-- like this example of a specialized database created by RemodelMax specifically for weatherization activities.

Use this manually as a worksheet to price a proposal as a way to begin to standardize your estimating, or go all out and buy a computerized version that will write your specs and contract for immediate printing. I like the estimating program ClearEstimates; it can be combined with Remodelmax (see www.mikedelivers.com for details on both). You can import a 10,000 item database from RemodelMax similar to that shown above, or organize your historical data or any other information on a spreadsheet and let ClearEstimates take over from there. Later when the estimate becomes a working job you can export your job to Quick Books Pro for job cost accounting.

If you want to go the computerized route, look at four details:

• what the software provides in the way of reports (contracts, specs, etc)
• where the database comes from and what it takes to keep it updated
• how it might link to other programs you use
• how easy it is to use

Cost is also an issue, however, think of this software as the tool that it is. We invest in tools to help us earn money, then we invest again in the time it takes to learn to operate the tool, then we reap the rewards. When you remove or reduce the estimating bottleneck you have time to see more prospects and sell more work.

Often times in the home performance field, contractors start out in one specialty or another – say, HVAC repair or insulation installation. To grow the job into a true whole house as a system home performance job however, means hiring subcontractors. By providing a focused set of skills, subcontractors can reduce costs and project risk. In the best case scenario, you receive the same or better service than you would if you hired employees and trained them for the specific type of work. But sometimes, managing subcontractors can drain your time and energy, like trying to contain a multi-headed hydra that keeps sprouting new heads. Without a well established process and correct oversight, subcontractors can trigger cost creep –hidden or additional costs to the project– if you don’t understand all the rules and regulations surrounding subcontractors.

Here are a few things you need to know if you plan on hiring a subcontractor:

1. Know the Contractor versus Employee Rules
The first thing you need to do is establish whether or not a subcontractor qualifies to be paid on a per job basis or as an employee on payroll. To qualify as a subcontractor the person or entity must:

• Show proof that a business exists, i.e. business cards, letterhead or an ad in yellow pages.
• Know how to accomplish the task at hand and own their own tools. In other words, they can’t be told how to perform the task or be trained by you to perform it. A good example would be a trade contractor that focuses on their specific scope of work, i.e. plumber, electrician, tile installer, etc.
• Work for more than one contractor in a given year.
• Set their own hours. In other words, you can’t tell them to be at work between 8am and 5pm. If you supply a computer and drafting supplies and require the draftsman to work 8am to 5pm each day that person is considered an employee. However, if you give the person a scope of work and a deadline and they work from their office using their tools they probably will NOT be considered an employee.

If a subcontractor doesn’t meet all the criteria listed above they are considered an employee. The IRS will require payroll taxes on all labor paid to the person performing the work.

2. Collect the Right Paperwork
Before a subcontractor starts working, a number of items need to be collected, including:

• A signed W-9 form
• Workers compensation insurance verification form
• General liability insurance verification form
• Subcontract policy (optional)
• Invoices

W-9 Form - A signed W-9 is needed to help generate the annual 1099 form required by the IRS. The 1099 is required for all subcontractors that have been paid over $600 during the calendar year. A 1099 is not required for businesses that are incorporated or those that supply only materials. For example, you would NOT send a 1099 to Home Depot or your tile supply store. But the tile installer, plumbing and electrical subcontractors would get one.

Proof of Insurance Certificates - For contractors who are just starting out in business, one of the biggest mistakes often made is not gathering proper insurance certificates from a subcontractor.

In order to make sure your subcontractors and their employees are adequately covered under their own insurance policies, you need to collect proof of insurance for both worker’s compensation and general liability insurance. If you neglect this step of the paperwork collection process, it WILL be very costly for you because:

• Your insurance company will add those uninsured subcontractors to your policy and charge you for their insurance.
• If the sub doesn’t give you an insurance certificate that covers them for the time period they are on your jobsite, your worker’s compensation and general liability insurance annual audits will more than likely charge you for their insurance.

Subcontract Policy - This is not required but falls into the ‘good idea to have’ category. It’s your general policy statement informing the subcontractor exactly what is expected of them. It welcomes the new subcontractor to your company and lets him or her know they’re now an integral part of your team. It sets expectations of the subcontractors. Even though a sub isn’t an employee of your company, to the customer he/she represents you.

Remember that your work is only as good as the work of your least competent sub. If a subcontractor doesn’t work out, it shouldn’t be due to a lack of communication. By providing a written policy statement in advance, with your rules clearly stated, there’s less room for misunderstanding. You can use this form on nearly any type of subcontract work.

Invoices – In order to pay a subcontractor you’ll need an invoice for the work performed. The invoice needs to be kept on file for seven years in case of an IRS audit.

3. Track Subcontractor Paperwork
As you can see, there are a number of items that a contractor has to keep track of when it comes to subcontractor management. In order to be successful at gathering all of the information in a timely manner, it’s best to use a computerized accounting system, such as QuickBooks. The Contractor’s Guide to QuickBooks Pro published by Craftsman Book Company has helpful information for designing custom fields in QuickBooks. This is available at http://onlineaccounting.com/custom.php.

If you don’t use QuickBooks, you can download and use this form: Subcontractor Insurance Verification Log.

The purpose of this log is to organize, in one place, information about insurance coverage for each of your subcontractors. This is a handy form for organizing the information and a quick check to see if you’ve gathered everything needed for each subcontractor. In addition, you’ll use this information several times during the year, including during your annual worker’s comp and general liability audits. This form will keep all of the information on hand and available.

Congratulations to Bob Knight of Bevilacqua-Knight, Inc. (BKi) in California, who was the first person to get the right answer in last month’s Stump the Chump game!

As our loyal readers will recall, the problem was the ‘unusual smell’ sometimes coming from the mechanical closet that contained a litter box and an atmospherically vented water heater. Bob was right on target when he surmised too much vent fan power being used on these occasions, creating water heater flue backdrafts which push the kitty litter fumes out of the closet instead of up the flue. Says Bob, “This is likely happening specifically in the summer, because the air conditioners are running and the central returns are probably inadequate (frequently happens), forcing the A/C system to work harder and create a run-time negative pressure in the house relative to outside. This adds to the water heater backdrafting.”

Macon Parker, who sent in this stumper, reveals that during a CAZ test it was determined that under natural conditions the atmospherically vented water heater had proper draft. But if one were to turn on the dryer, Viking oven vent, all three air conditioners, all the bath fans (which were vented properly), and close all the interior doors to rooms which did not contain a return then one could create a worst case scenario that allowed for backdrafting. The solution to this problem involved replacing the water heater with a tankless water heater that vented directly to the outside.

Bob Knight is President of Bevilacqua-Knight, Inc. (BKi), a consulting firm that for 30 years has been a leader in getting new energy and environmental technologies accepted and into use. BKi develops market studies, technology assessments, barrier and value assessments, strategic alliance building and communications strategies. The firm’s expertise ranges from energy-efficient buildings and advanced power generation to emissions control and alternative fuel transportation.

Below is this month’s puzzler, a test of your home performance know how. Figure out what is going wrong with this house, write it up along with your prescribed solution, and send it to us at lmcdowell@bpi.org . If you’re the first person to get the right answer, we’ll feature you, your company and your answer in the next issue of Performance Matters!

The Problem:

Thanks to Kebbyn Giffin, a home performance trainer at SUNY Canton in New York State, for this month’s stumper! The two-story house with attached garage was newly built, one in a row of houses all the same, that appeared to comply with code. Yet it didn't pass the building airflow standard. The blower door test revealed that the band joist area between the first and second floors, which by rights should have been inside the house, was directly connected to the outdoors. Kebbyn removed the siding of the band joist and found no sign of any problem there. Looking into the attic above the heated garage revealed a partitioned wall between the garage attic and the house with plywood sheathing going down below blown-in insulation. What was causing the air leakage?

Think you know what the problem is, as well as the solution? Send it to us at lmcdowell@bpi.org.

Send us your stumpers!
You know - that problem house, symptom or combination of symptoms that confounded the homeowner and challenged all your building science savvy to solve. Send us a description of the problem – and the solution, which we’ll keep a secret. If it’s a genuine stumper, we’ll publish it in the next Performance Matters e-newsletter. Send to lmcdowell@bpi.org, or call 202-223-9510 x208 to phone it in, and we’ll write it up!