The tradie economy is booming with Australians spending more than $73 billion on tradesmen in the past 12 months.
And this is only jobs attributed to the residential sector, according to a whitepaper released by EY Sweeney, L.E.K Consulting and commissioned by hipages.
With more than 250,000 residential trade businesses servicing Australia’s nine million households, its not surprising to learn that tradies are in high demand.
There is demand for all levels of work from cleaning and gardening to more specialised services like plumbing and carpentry. The whitepaper estimates the value of residential work for refrigeration and air conditioning (RAC) mechanics topped $2.8 billion in the past year.
However, sourcing a tradie isn't always easy. The whitepaper found that almost half (48%) of all homeowners find it hard to source a reliable tradie who will arrive on time.
“While demand for quality tradies continues to grow, the industry remains largely ‘old school’ in its practises,” the report said.
“Thirty years ago, Aussies relied on word-of-mouth and paper directories, such as Yellow Pages, to source a local tradie to complete a job. Fast forward to 2018 and, compared to the rate of technology uptake in other industries, the rate of technology adoption by tradies and consumers for this process remains relatively slow and gradual.
“In fact, more than 70 per cent of consumers still engage tradies through world-of-mouth by contacting a previously used tradie.”
The whitepaper found that there is still a resistance by tradies to go digital. Instead, manually quoting and invoicing with 14 hours per week spent on administration.
This wasted time on admin means tradies pass up an estimated $120,000 worth of work annually, the report said. But change is underway as Millenials and younger consumers leverage the on-demand tradie economy using online directories or search engines to find a tradie.
“A thriving on-demand tradie economy supported by digital platforms will simplify the industry’s most complex issues by providing online tradie recommendations and lead sourcing, as well as enabling online communication and payment processes, thereby diminishing the obstacles standing in the way of the industry’s enormous potential for growth,” the report said.
Pricing is another sore point for Aussie consumers. Nearly half feel frustrated about unforeseen and unexpected costs incurred during and following the completion of a residential job, and almost half (45%) would like to hire and pay for a tradie through a secure third party website.
The research results underline the need for tradespeople to optimise their invoicing and payment methods.
Currently, only one in 10 allow payment via a third party, such as PayPal, and less than half that number allow payment through a secure third-party platform, such as hipages.
Similarly, tradespeople fnd the process of preparing quotes, chasing payments, and completing admin some of the most frustrating aspects of their job.
When preparing the whitepaper L.E.K Consulting received responses from 1,004 consumers and 395 tradespeople.
The whitepaper identified 9,000 businesses offering residential services for RAC trades. It found the average value of a residential RAC job in 2018 is $1,100.