Inflation Reduction Act: Improving Your Insulation Workforce & Working With State Energy Offices

The Inflation Reduction Act is set to provide a lot of subsidies and other resources to insulation contractors and their workforce. But unless you know the details, you may not be able to maximize them for your business. That’s why we’ve invited Xavier Walter on the show to chat with IDI’s Business Development expert Ken Allison. They explain how you can access Inflation Reduction Act benefits and how those in the insulation industry can best utilize them to hire and retain the best talent in their workforce.

Xavier is the State Outreach Coordinator with the Building Performance Association. He is a certified energy auditor and contractor building science trainer for over 15 years in the home performance industry. He’s going to share some of his experience and how he built and ultimately sold his company by building a team of professionals, many of whom are still in the industry today. We discuss these Inflation Reduction Act rebates, how you can make sure your state actually takes advantage of them by working with state energy offices (SEO), and how to recruit, onboard, and retain insulation workers by providing a clear career pathway.

Podcast Transcript

[00:00:00] Xavier Walter
So, understanding what you do in the home as a contractor and how that interacts with the home on the whole is really, really important. And then that gives you the opportunity to network with the other contractors on that project to kind of come together for this whole house approach towards, you know, making homes more safe, comfortable, and efficient.

[00:00:22] Intro
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[00:01:02] Ken Allison
Welcome to the R-Value Podcast! And with all the rebates coming, I’m telling you right now, you’re going to need people. Yep, workers. Yep, la la la labor. Well, make that labor, sales and much more. Lucky for you, we’ve got one of the experts today. Xavier Walter is here with the Building Performance Association. We’re going to talk about rebates, how you can make sure your state actually takes advantage of them. We need to make sure we cover that. But mostly how to recruit, onboard, and retain workers by providing a clear career pathway. In fact, Xavier is the state outreach coordinator for the Building Performance Association. He is a certified energy auditor, contractor, building science trainer. Over 15 years in the home performance industry, he’s going to share some of his experience and how he built and ultimately sold his company by building a team of professionals. Many of who are still in the industry today. So, with that, Xavier, let’s talk about this. This is quite a time for you guys at the Building Performance Association, no?

[00:02:02] Xavier Walter
It is Ken. Very exciting! We’ve been waiting a long time for this. I remember being a contractor when Homestar was coming about and you know, it was going to be a really exciting component for us and unfortunately that never happened. But the powers that be, you know, kept working and working and here we are today.

[00:02:20] Ken Allison
That’s fantastic! How did you actually wind up there? Did, did they just like knock you over the head one day and say you’re not a contractor or what?

[00:02:28] Xavier Walter
Ugh, no, after I sold the business I ran around training for a while and I’ve always been a consultant and my job is to kind of lift others up into the industry. And a good friend of mine, Keith Aldrich, was the previous CEO of the Home Performance Coalition, which is now the Building Performance Association. And he and I have been talking for years about my interest and being able to make major change by working with the association. So, it took a long time, but I was finally able to get the, the job of my dreams.

[00:02:56] Ken Allison
I certainly appreciate having you on and I’m sure our contractors will. And with that, I mentioned in the lead in, you know, this money is not a guarantee for these guys, correct?

[00:03:06] Xavier Walter
Correct! Yeah. It’s up to the states to decide whether they want to take it or even if they have the capacity to take it.

[00:03:13] Ken Allison
I’m glad you said the capacity, because the last call I was on talked about aggregators, and things like that. And there are some power companies that would like to be an aggregator, and this gets into a whole long conversation, but just for the audience’s sake, if you don’t have a system set up in your state to distribute, honor, find out, verify, and do everything that needs to happen in order to get this money. You don’t get to spend it and it goes to a different state. So, with that, Xavier, you’ve got another task on the on the force there at Building Performance Association. How can these guys help make sure that the money does come to their state?

[00:03:58] Xavier Walter
The biggest thing they could do is organize together and make their voices heard. You know, when we have a group of people that are ready, willing, and able to participate in the process within the individual state or community, it makes it a lot easier for the government there to take it, to take a step up and say, you know what, we have people that want it, we have ways to use it. But just like anything else, manpower is an issue all over and that doesn’t stop at the state energy offices. Many of the state energy offices around the country are understaffed. And even though some of them are looking to expand, it is a big challenge.

[00:04:33] Ken Allison
Do you guys have any sort of connection or group or assistance for people to find other people in their state to work with in order to get this facilitated and make it happen so that the money does flow?

[00:04:48] Xavier Walter
Yeah, partnerships are going to be key throughout this process. So, you need really need to bring together not just the contractors, but also the schools and the state energy offices or any other advocates on the ground. Our association is rapidly organizing around the country. There’s lots of legacy associations around that have, that we’ve partnered with and become allies with. But if there’s places that are previously underserved, we’re able to organize an affiliate model where people in the state can become members of the association, but they also have a local tie to be able to really be leaders in their own areas. So, we’re constantly looking for those volunteers and those champions in those areas to kind of take the reins and help us organize.

[00:05:33] Ken Allison
So, if we at IDI get people that want to make sure this happens in their state, would I direct them to you or to the Building Performance Association website, or where are they going to find information so that they can, you know, establish some connections locally and get the ball moving forward?

[00:05:53] Xavier Walter
A simple click through to building-performance.org is the best place. Anybody can email me at xwalter@building-performance.org as well. We also have a Communities Connections page where there are state specific pages where people can go on and talk about what’s going on and share good news from their region. So, it’s real state specific and if there isn’t one state listed already, that’s a good telltale sign that we don’t have anybody formally organized in that state. And we’re really anxiously looking to talk to them.

[00:06:26] Ken Allison
Just a word to the wise. It’s going to take people, bodies and things like that. As Xavier said, you got to realize they have the same challenges you do, and they’re labor deficient. So, with that, talking about labor then, Xavier, what is the organization doing or what can our contractors start doing to fill in the gaps? Because obviously new construction takes a third, a fourth, a fifth as long to go in and complete a house as it does to completely retrofit, test and get a house through the process that we’re talking about. So, what can they do to start filling in and finding labor and securing people?

[00:07:12] Xavier Walter
The best thing they could do is start working with their local community and technical college system. If there’s any trainers, existing trainers, or other providers in the area, the people that you know are doing this type of work, just get educated. You know, the thing about energy efficiency is that it’s not its own standalone industry. Energy efficiency is embedded inside all of the existing trades. So, if you’re doing any kind of work that touches natural resources, you’re an energy efficiency contractor, whether you know it or not. I like to start people out on the building science principles. It’s a certificate offered by the Building Performance Institute, one of our nation’s leading standards organizations. And it really just gives you that overview of the whole house approach and how what you’re doing in the home may interact the system as a whole. So, if you’re taking a heating system and putting in a new heating system, but you’re putting it into bad, undersized, crooked ducks, that may not be the best thing for that homeowner. And your system, that system may not last as long. So, understanding what you do in the home as a contractor and how that interacts with the home on a whole is really, really important. And then that gives you the opportunity to network with the other contractors on that project to kind of come together for this whole house approach towards making homes more, you know, safe, comfortable, and efficient.

[00:08:39] Ken Allison
Well, one of the things you mentioned to me was also being a guest speaker at these schools or a guest presenter, guest teacher, that you had actually seen this done at high schools, trade schools, places like that.

[00:08:53] Xavier Walter
Absolutely. It’s incumbent upon all of us that are in this industry and have been here for a while to kind of duplicate ourselves and be mentors to the rest of us. And one of the great opportunities that I found throughout my career was the opportunity to go into a local community college or a high school, technical school, and really just do that one-day building science principles and help that instructor teach that down the road. So, you come in and the students get really energized around it. We’ve also done it for groups around Habitat for Humanity, Goodwill. It happens for real estate agents that love it. It’s just the ability for us professionals that are out there swinging hammers every day to maybe take a day out of the field to go and share our knowledge with other people inside of our community. And inherently, if you’re looking for workers and you go and teach at a at a high school shop class of graduating seniors, you can look around that room and take your pick. Hey, I’d like to hire that person and get them into our trade.

[00:09:58] Ken Allison
That’s an outstanding approach. In fact, once you’ve been in the field as long as we have, understanding building science the way that we do, you can do a tremendous job of teaching building science just about anywhere because you have application, you have stories, you generally have pictures, results, things to share. And its very eye opening to someone that hasn’t been in building science before. It really is an eye opener. So, I can see your point. You look around the room and you’ve got all these wide-eyed people that you’ve just introduced a new concept to.

[00:10:35] Xavier Walter
And if you’re passionate about it, which most of us are, that kind of that spills out in your presentation. So, people that are otherwise not adept at putting themselves out there or public speaking all the time, this is an opportunity for them to really do something that may be close enough to their comfort zone where they do feel comfortable and really share their passion. And the concepts are relatively simple. A lot of this stuff, as you know, we’ve learned in high school science class: thermodynamics, how energy moves. So, it’s not like we’re teaching rocket science. And if we put our heart behind it, that’s really infectious to the people that are listening.

[00:11:15] Ken Allison
I love that. Now, you mentioned Goodwill. Is that actually a place where you’ve brought people out of and added them to your company?

[00:11:25] Xavier Walter
At the time when I was when I was a contractor, the short answer is no. But there are a lot of great programs running through Goodwill. We just had our last conference in Nashville. We had a day seminar out at the Goodwill Inn in Nashville, and they’ve made really great partnerships with a lot of the local distributors and manufacturers to do some basic hands-on construction training; how to swing a hammer or how to run a saw, and then they can move on to the whole house. They had tiny houses inside their facility, right. Stacked up right next to like pallets full of old clothes. And they’re teaching people, they’re teaching people these concepts of building science, getting them both BPI and RESNET certified and getting them job ready. And the good thing about Goodwill is that’s another great partnership where they have easy access to a lot of ready, willing and able workers. So, by embedding that type of training into an institution like that really gives ground level access to people that are looking for a career.

[00:12:31] Ken Allison
Outstanding, I love that approach. Now, also, you had mentioned that there are some training and wage subsidies out there, things that are going on that you guys are seeing. Can you address some of that?

[00:12:45] Xavier Walter
Yeah, sure. The states everywhere have a workforce arm. Here in West Virginia, its workforce. West Virginia, they call it different things. Sometimes it’s called the One Stop Career Center. So those places are great, are great places that you can, that contractors can partner with to get training and wage subsidy. And it varies state by state. Here in West Virginia, I think with the governor’s guaranteed program, it adds up to be about $2,300. But when I was a contractor in New Jersey, I was able to pull somebody off the unemployment line and get 50% of their salary subsidized for up to the first six months. So, it’s a really great way to onboard somebody, help pay for some of that training and possibly pay for some of their wages when available. And then we can talk about pre-apprenticeship and apprenticeship programs with kind of formalize that type of arrangement.

[00:13:42] Ken Allison
So that brings up another thing as you’re out there, call it fishing. One of the major lures that, that people forget about are one of the big glues out there that tends to adhere people to you is understanding that this isn’t just construction, that there really are career paths. Do you want to talk about that a little bit?

[00:14:05] Xavier Walter
Yeah. As I mentioned earlier, you know, energy efficiency is everywhere. It’s built into almost every occupation everywhere. And one thing that I found in my career is that opportunities are endless. So, I may walk in the door through building science principles, become a building analyst and an energy auditor, but then I might find an opportunity within the commercial space to go out and do lighting assessments. I might find the opportunity to go work and consult at an architect’s firm or become a green realtor and go and specialize in energy efficient houses. So, the opportunities are really endless. This is just a kind of an entry way. And really if you kind of find out what you’re passionate about and what you like, you’ll see those doors open for you and give you a choice. So, you may start out in as an HVAC technician, but then you might drive deep into refrigeration and the opportunities there are endless.

[00:15:02] Ken Allison
Well, and I know in our trade, spray foam has always been, quote: “sexy”. You know, it’s the big lure that draws people to insulation when in reality, you know, most buildings aren’t done with it. But that being said, it really is captivating to the people that first see it. You know, the first time you see open cell rising and in 7 seconds you’ve got this cavity full. It’s pretty mesmerizing. And so, a lot of guys use that. But as you lay this out for someone, when you’re first bringing them onboard, do you try and work with them to set up a career path or give them, quote: “hope for tomorrow”? What are your thoughts on the best route for onboarding and really keeping them once you’ve gotten some sort of interest established by someone?

[00:15:59] Xavier Walter
Yeah, I think, I think we as employers need to start thinking differently than we may have for the past bunch of years. You know, nowadays, especially with the younger generation, they want that career path. They want to know that what they’re doing today may lead to promotion or incentive down the road to equal more, more responsibility and more money. So, I think through, you know, through our apprenticeship program that we’ve helped design it gives that, that entry level technician a clear path to move up and using the credentialing process. I don’t care what. If it’s SPFA or if it’s RESENT or if it’s USGBC. Any of these credentialing processes can give you certifications along the way and kind of give you that roadmap to a brighter tomorrow. Because for us to believe that we can continue to throw technicians in attics and crawl spaces and horrible conditions five days a week, 10 hours a day, it isn’t going to keep us with the newest top-quality workers. So, we want to make sure that we show people and it’s really incumbent upon the employer to set forth that career path and give them those little wins along the way and give them a path to walk down. And the industry y on a whole is really focused on that. We have the Green Buildings Career Map on our website that you can kind of walk through and highlights a lot of the jobs within our industry and the adjacent industries. There’s lots of resources being developed to help people understand the opportunities available to them.

[00:17:42] Ken Allison
So, with that, some of them are genuinely altruistic that I’ve met at the shows. You’re much, you’ve got a lot more exposure to this than I do. My question would be, do you see green, saving the planet, energy saving, are those really key for people choosing this as a career path? How much do you think that weighs in in the overall balance of things?

[00:18:12] Xavier Walter
I think, I think it is for the majority. Especially of younger generations. Using the saving of climate change as a hook and having something to be passionate about is a real, is a real winner. I think a lot of younger people do realize the impact that climate change has, and they want to do their part to mitigate it. I do also think that it’s a hard pill to swallow for some, especially those that work in the coal fields where I live. You know, for them to, to accept the, the green as an opportunity to their future has been a hard pill to swallow. But there’s been a lot of success there. But at the end of the day, when we talk about the work that we do specifically in residential homes, the workers, what they really get passionate about is workers within a community making the lives better of those within that same community. So, by having people understand, the workers understand, and they see it within their first couple of weeks, when they go in and seal and insulate somebody’s house, give them a new heater, give them a new water heater, and that homeowner feels immediately more comfortable. And the air in their house is healthier to breathe. They’re very thankful. So, in my career, when I see my old customers in the grocery store, they’re not jumping up and down saying: “oh my gosh, Xavier, you saved me $30 a month”. They’re saying, “Oh my gosh, Xavier, I feel more comfortable in my home. I feel healthier in my home”. And for a worker to understand that what they’re doing has that value. And if they can see that within their own eyes, especially when we talk about it happening within a very small community, you know, that’s really impactful. And I think that’s the hook. And I know for me personally, that’s how I got into this business. I went broke with the mortgage crisis back in 2006, 2007, and they came in and sealed and insulated my home. And I went, wow, I feel more comfortable. I can make a career out of this. I understand the impact that it had for me and my family. And that’s what’s really driven me throughout my career. And then being able to have a career in this industry makes me really thankful for that opportunity. So, I feel almost like I’m so thankful that the industry that we have and the people in it have given me that opportunity to have such a great career and kind of go from “where do I go from here? I have nothing” to this awesome career that has me talking to great people like you.

[00:21:00] Ken Allison
I’m so glad you said that, not about me, but I am so glad you brought that point up because I truly feel blessed to do this. I really do. And it’s not a point that should be overlooked. So, if we look at what would enhance the idea of coming over to our side, you’ve got the career path. The fact is it is going to save energy and it’s green. But the bigger markers are really, you’re going to make healthy buildings. You’re going to help people be more comfortable, feel better with where they live, and you’re genuinely making a difference. I think that’s just a stellar point to get out there. And I would add to that also, you know, then you can talk about the things that you do for them. Meaning, you know, I’ve told a lot of people in class, hey, you need to love them. I mean, love them like they’re yours, like you created them, like, you know, Jesus or something. You know, and I was talking with a guy out of California, just a stellar, stellar contractor. His name is David James. But they started their Friday feed bag, which is one of the office people, goes down to Trader Joe’s and gets dinners to go, meaning everything it’s going to take for Friday night’s dinner in a bag. And then they give those bags out to their crew on Fridays. And I thought, wow, what a thing to go home with. And then last year, my, you know, not epiphany or anything, but the idea was instead of going out and taking someone to lunch at a job site, why not show up and hand them five lottery tickets? Not because it’s cheaper. Sure, that’s great as a business owner, but what’s the thing that that guy doesn’t do with his money? But he really wants to every time he’s standing at the counter, you know, you give them five scratch tickets. If they hit the million, maybe they buy your company, who knows? But, you know, it’s something different. But you can customize rewards. I told somebody one time, I said, if they want to be a chef, get them a class, a culinary class. And, you know, every six months you work for me, I’m going to cover one quarter of that. And there’s so many things you can do. But what on that side have you implemented, seen, done? I’m just looking for more ideas to help people.

[00:23:28] Xavier Walter
Yet coming out of the pandemic, certainly, we also need to be think differently and we need to offer those types of benefits. Funny you mention that about California. I just saw the same thing at a at a local contractor in southern New Jersey and HVAC contractor did bring, they had a breakfast. They do a breakfast once a week. So, the leadership cooks, actually cooks, breakfast for the crew in the morning before they kind of head out. And that kind of stuff builds rapport, and it gets investment. And, you know, there’s lots of opportunities for people to network and because your greatest employee is the one inside, right? We’re all kind of accountable to one another within a team. And being able to foster that type of teamwork is really, really great, especially in the era now where a lot of these larger companies are just letting go of the leases of their building and everybody’s working from home. That kind of frees up money for these, for these place companies, not so much contractors, but the larger businesses to have little retreats and have company get togethers and kind of spend time getting to know one another and really go outside of the work mindset and just build that teamwork and build that rapport. And for somebody that offers benefits, and you’ll see that all throughout, in every industry, where companies are offering benefits, like we always joked about Google having gyms and a coffee bar and little lounges and you know, that attitude of making it comfortable for your worker and kind of meeting those needs. We may find out, we find out a lot through our national needs assessment that, you know, childcare is a big thing. You know, people want to go to work, but they can’t afford by the time they pay for daycare, they can’t afford to go to work because they’re not making anything. So, if a company is able to offer daycare subsidies, vehicle subsidies, especially when we start talking about, you know, utilizing the new American workforce for people coming into our country for a better opportunity, you know, they may not be prepared. I heard a story up in Maine where a gentleman from Africa was an engineer or an architect and starting with a home performance company and his first day at work, he didn’t have a coat. He wasn’t used to the cold weather of Maine. So being able to identify and understand and help adapt to that worker’s need on a more human level is really where we need to get to and realize that these workers are our most valuable resource. They’re not just a number and we need to take care of them, and we need to treat them better than we ever had. And, you know, we know how a lot of the spray foam people, how well they take care of that spray foam gun, because if you don’t clean it every day and you don’t do a good job, that thing’s not going to work well for you. We’ve got to take that same attitude for our workers and make sure that we’re not only looking at it holistically from a household perspective, but how we’re addressing the job sites, but looking at the worker from a holistic perspective and making sure that we’re valuing them and meeting their needs.

[00:26:46] Ken Allison
You covered a lot in that statement. Couple of things I want to highlight. You know, you brought up the spray foam gun. It’s kind of funny because also people will leave you for better equipment. I’d make it as simple as: I’m in Texas, 170-degree attic, August. This guy’s got a little bitty fiberglass machine. This guy’s got a brand new big one. This guy wants you to spend 7 hours blowing into one attic. This guy says in 40 minutes, you’ll be back in the truck with air conditioning. Are you quitting and going to the other guy? You know, and not only is he making more money because he’s got the right equipment, but his workers feel better. And then you mentioned the truck. The truck that they drive home. If you let someone take a nice vehicle home, like you said, vehicle subsidies, those things. Another thing David did was take them shopping once a year to get their own boots. Pick out your own. I’ll get them. You know, it’s those things that really create, I guess, for lack of a better term, family. And family is much harder to leave. Sometimes you cut ties, but family is definitely harder to leave.

[00:27:58] Xavier Walter
We were at a conference last week and my screen on my phone is all broken and it has been for like ever. And we’re just sitting at dinner and my boss, Steve Skodak, turns and he goes, you know, we’ll take care of that for you, right? I was like, “Oh”, I was like “while we’re at it this thing is an iPhone six. Did you see that new iPhone 14 coming out? I’d really like to get that”. And those are the little things, having a nice set of tools and really make, you know, really make all the difference in the world, especially for when it makes the workers life easier to get to go from sweating pipes to pro passes is like is like night and day.

[00:28:35] Ken Allison
Absolutely. I totally agree. Well, Xavier, I know you’ve got to catch a flight, but I cannot thank you enough for doing this and getting the ball rolling. I will make sure that as I get contacted by our contractors, that they’re reaching out to BPA. They’re trying to get organized in their states, get the money rolling. And what do you say we cover anything new maybe early next year so that we can help them find even more people?

[00:29:05] Xavier Walter
Sounds great, Ken, and I appreciate you having me. And thanks for this opportunity and thanks for doing this podcast. It’s awesome!

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