HVAC Industry: Challenges

The summer is coming with the sun, heat and extreme temperatures! As a result, more and more people decide to invest in air conditioning or proper ventilation. As a result, high demand for HVAC appliances causes a significant growth of the sector, with many small enterprises created each year.

However, managing the HVAC business is not always easy. It is connected with many challenges on which companies often have zero impact. That is why today, we will take a closer look at these pain points and try to find possible solutions.

The State of the HVAC Industry

The predictions for the HVAC (Heating, Ventilation and Air Conditioning) Sector’s future look very promising. As we already mentioned in the previous article, according to forecasts:

• The industry is on a way of constant growth (from 6% to even 13% depending on period or location)

• The number of jobs in the sector is expected to grow by 15% between 2016-2026

Looking at these numbers, we can anticipate an optimistic future. However, if we stopped here, the actual image of the industry would not be accurate. That is why instead of looking through rose-coloured glasses, let's focus on challenges that companies often face on a daily basis.

Challenges of the HVAC Sector

• 01

  Seasonality of busy periods
  When do people think about proper heating or air conditioning? Of course, when the temperature is unbearable during summer or winter. During these times, HVAC companies are often overwhelmed with the number of potential customers and projects managed simultaneously. However, managing the company without financial loss can be challenging for the rest of the year when people do not feel the need for HVAC appliances.
  
  When we look at it from the employees' perspective, it can be a factor that prevents people from entering this profession. The uncertainty during the stable weather and overtime requirements during the summer are not appealing for young people who often look for jobs with a clear work-life balance.

• 02

  Experienced workforce shortage
  The problem of a labour shortage is visible in the whole construction industry. Unfortunately, the HVAC sector is no exception! The average age of a mechanic (installer) in the US is around 42. Probably, this number may not seem alarming to you. But did you know that the number of employees below 34 years old is two times smaller than those above this age? With such statistics, the severe problem of workforce shortage is only a matter of time.
  
  A similar situation happens in the UK, where many experienced employees are going to retire soon while, at the same time, young people do not find working in HVAC appealing.
  Businesses try to deal somehow with such situations by creating local skills programmes or by investing in new technologies. The latter can be an excellent opportunity for a company's growth and for better project management.

• 03

  The difficulty of team management
  The lack of skilled employees is not the end of the internal problems! The HVAC sector offers services that are often time-consuming and engaging. Except for staff who install the needed equipment, you will probably need a supervisor to monitor the whole process and the final stage.
  
  When we multiply these steps by numerous projects simultaneously, team management may become a real challenge. The supervisors have to manage different tasks, often without being present in person at the installation place! To solve this problem, companies decide to invest in project management software to gather and manage all the information from one place.

• 04

  Stiff competition
  Let's look now at the bigger picture. As we mentioned before, each year, many small and local HVAC companies are being created. With the fluctuations of busy periods, it turns out that it is not so easy to survive on the market. Of course, it might not be the case for everybody! But if you feel that it is not so easy to win and keep customers, you probably operate in a highly competitive market.
  
  Many companies decide to attract potential clients with lower prices, but constant discounts and promotions are not the solutions. The way to solve this problem would be to find your niche and offer exceptional service. However, many companies are afraid of profound changes in their processes.

• 05

  Keeping up with new technologies
  Modern technologies can be overwhelming, especially in the construction industry, where many employees are not skilled enough or open for digitalisation. As a result, many companies do not want to invest in digital solutions, trying to stick to well-known tools. This tactic may be a good one in the short run, but turns out to be the coffin nail in a longer perspective.
  
  Nowadays, one of the main pain points for HVAC companies is smart building. Since having a smart house is an emerging trend nowadays, more and more clients want their HVAC appliances to connect with integrated systems. However, it is not easy to obtain from the company's side as such technology often needs special software to operate, permanent access to the internet and different maintenance activities.

• 06

  Clients' needs
  The customer is a King. You have probably heard it many times before. Well, the clients are crucial for any business, but they can be a challenge as well. For example, nowadays, customers want their appliances to be modern and efficient, but at the same time, they require fast and cheap service. More often, they do not only want air conditioning, but a modern technology moderated by smartphones as well.
  
  If you are not innovative enough, it is really easy to lose potential customers. And in the highly competitive market, it is even more dangerous for your business!

• 07

  Climate
  Let's not forget about environmental changes! Not sure if you are aware, but they impact the sector heavily! First of all, we need to mention the impact of hot/cold weather on-demand from point 1. But, what is also essential, the HVAC industry is impacted by the decarbonisation demand legislated by the UK government. So, the appliances’ requirements are already changing with features like energy efficiency and lower CO2 emission.
  
  According to Alex Bak from LightFi, modern technology that helps monitor and adjust the HVAC systems by switching the AC off when there is no one in the room might be helpful in addressing the needs of the climate.
  However, it is the cost of the investment that can stop companies from using tools like IoT or AI.

• 08

  Cost
  Probably the most crucial factor is the cost. After all, companies might be interested in new solutions that will support their project management, reduce carbon footprint or solve labour shortages. Still, too high a cost is an obstacle that they cannot ignore.
  
  The cost also grows when new appliances have to be in line with decarbonisation requirements or contain modern functions that will fulfill customers' needs. So, it may turn out that the cost is the most critical challenge that can kill any small, local HVAC business.

Solutions for the HVAC Sector’s Challenges

As you can see, we managed to identify eight main challenges of the HVAC sector. Like climate change or labour shortage, some of them cannot be influenced by a single company. However, with proper tools, you can minimise their impact on your company. Moreover, when it comes to internal challenges, like team management or keeping up with modern technologies, we can even boldly say that you can solve them with proper tools!

So, what are the solutions that can support you in solving these challenges? In Archdesk, we believe that smart use of modern technology can be an excellent chance for your business. But, at the same time, we understand all the factors that may stop you from investing in it. That is why, check our next article with possible solutions for HVAC companies. We want to focus on the best digital solutions to support your business and show you that some of the barriers are only in your head!

->HVAC Industry: Solutions

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