COVER STORY: Tradies add new digital platforms to their toolbelt

The marketplace for tradespeople is currently undergoing a digital renovation, as consumers become more dependent on mobile technology and online solutions. It is being driven by the demand for workers which has surged due to Covid-19 and natural disasters, tradies are having to learn a whole new toolset.

Tradies are a pivotal part of the Australian economy. According to the Department of Foreign Affairs and Trading, the construction industry is worth $142 billion, with 1.17 million people employed across Australia and with over 257,000 trade businesses running nationally.

From those figures, it is estimated that the tradie industry contributes 7.7 percent to the nation’s GDP.

The last two decades saw the emergence of new technologies and platforms to help connect homeowners with tradies, assist property managers to maintain their buildings and help tradies manage their day-to-day operations like invoicing and paying staff. 

Hipages, which said it "matches homeowners with tradies who are most ideal for their requirements", has close to 35,000 tradie businesses currently subscribed to its platform and has posted more than 10 million homeowner jobs. Homeowners can hire from a vast range of services from removalists, plumbers, concreters and even pest controllers.

Roby Sharon-Zipser, CEO and founder at Hipages said when he began the business, hiring a tradie could only be done via the Yellow Pages.

He said, “We educated the market significantly, with information on how search engines work, the importance of building an online profile, capturing recommendations and ratings on your business.

“We also introduced trust and quality measures to publish the licence details, [and] business qualifications. There wasn't any platform in the market that was doing that. We brought them on that journey and explained the importance of that, and quickly achieved significant market volume,” he explained.

Since launching in 2004 the platform has become more sophisticated through customer feedback, Sharon-Zipser said.

“They are telling us what works, what doesn't work for them and we keep evolving our product to meet their meet their customers’ needs.”

A better experience

As consumers become more digitally native, it means that tradies should swap the carbon paper for an app to bring about a better experience.

Sharon-Zipser said, “Consumers have higher and higher expectations of responsiveness, ability to provide professional quotes and invoices, providing diverse ways of collecting payments, technology is a massive enabler for that.

“The tradies have to adopt that whether it's in the next year or two, or in the next five to 10 years, it's inevitable.”

When looking for inspiration, Rafael Niesten, co-founder at Bricks and Agent turns to the technology giants like Uber to see what they can adopt into their platform.

He said, “Our lens is: how do we use things in the market at the moment to apply them to our industry? Look at Uber for example, we built the tracking map so people see where their tradies were going.”

Bricks and Agent specialise in property maintenance and workflow software for residential, commercial and strata sectors

The translator tool within Bricks and Agent was inspired by Niesten travelling to Indonesia using a translator app with his Gojek driver, Indonesia’s answer to Uber.

“Now you can communicate multilingually, we're always listening, always learning, always trying to adapt, and always being iterative to try and get to the next level,” he added.

Jeremy Wyn-Harris, co-founder and general manager at New Zealand-based Builderscrack which was acquired for almost $12m by hipages in 2021 said data is an essential tool for tradies nowadays.

He stresses it will become more important as more tradies move onto digital platforms.

He said, “For us, our whole business is built not just on technology, but on data. We use so much data and we've got more data than we can process. That helps us make decisions on where do we market? Where are our supply and demand issues? What product changes do we need to make in order to stay relevant?

“We get a lot of feedback from our customers, both homeowners and tradies saying 'I’d like to see this, this and this’. We talk every day in our team amongst ourselves about what should go on our product roadmap,” he said.

Still a way to go

While this technological evolution is taking place in the industry, not everyone is convinced of using digital tools. Sharon-Zipser said technology adoption in the industry is low.

“Adoption is sitting probably around the 20 percent market, so 20 percent of tradies use some form of technology.

“But what we expect that to do is to increase significantly over the coming years where we'll start to see the 40 to 50 percent adoption happen over the next three to five years and eventually 100 percent over the next decade,” he explained.

Trade and job service management platform Fergus helps tradies manage the costs of running a trade business. David Holmes, CEO at Fergus outlined the three issues that trades platforms have to solve.

“Save admin [costs], get paid faster, guaranteed profitability. That last one, guaranteed profitability, is quite a difficult one to do because to do that, you have to be doing a sophisticated integration with the ecosystem,” he said.

Some of these platforms need to have a larger bandwidth in supporting some of these tradies, especially those with large inventories.

In the UK they still have a telephone book with every single SKU, according to Holmes. He spoke with one electrical wholesaler who has 15,000 items in an online system but still has one million items offline.

“We need to get this data flowing much better than it currently is, what you need to be able to do is get that in real-time and how do you do that on steroids,” he said.

While some tradies have implemented tools like Xero or MYOB to help alleviate the pains of managing a business, Holmes said they don’t fix all the management issues.

“It doesn't allow you to do time management. Quite a simple business, most trades businesses only do two things that move a lot: manage your time and manage your materials.

“If you can do that in real-time, you can get invoices in real-time, if you can invoice in real time you get paid in real-time, you get paid in real-time, you don't have cash flow issues. That's the bottom line to what we think about job management,” he explained.

“Job management, it's just a digital representation to everything they already do in the real world,” Holmes added.

The new tradies on the block

The new generation of tradies that are beginning to come into the industry are more open to working with digital tools.

Wyn-Harris at Builderscrack said technology is incredibly important for new tradies. 

“There is the new generation of tradies coming along, they're using technology more than their predecessors have. They expect a high level of technical competence in any of their products and tools.

“It's not just like a lead service like us a marketplace. It's also on things like their accounting, whether they're using Xero or another service to do their invoices online, anything that saves them time and effort,” he said.

Niesten at Bricks and Agent said due to the increased demand in tradies there is a push to get more done with technology.

“You do have a lot of like younger tradies that are coming into the market who have grown up with Facebook, TikTok, WhatsApp, and they're more accustomed to [using technology]. They don't have carbon paper; they don't know what that is. They don't want to do old school, they want to build an empire,” he explained.

Niesten said those who adopt the technology will go further than those in the industry that don’t.

He said, “The evolution will be that technology will become more adopted and what will essentially happen especially for our industry is those who don't adopt the technology simply won't get the work anymore, because those that do will have a commanding position that they will be able to grab market share.”

Tick of approval

When speaking to tradies and homeowners, Wyn-Harris said the reception has been mostly positive.

“They love us, I'm sure we can alienate the odd person here and there when we're not even trying. But the general reception is that from tradespeople who understand how to use us, we're a godsend. We’ve helped them through different economic cycles,” he said.

These platforms give tradies a helping hand with marketing and getting their name out into the space.

Wyn-Harris said, “We have a lot of tradespeople that source all their work through us, so we keep them in business. Like a lot of tradespeople, some of them don't have any other online presence or the inclination to have any. We do all that marketing for them and they get a complete choice.”

For homeowners, these platforms are the only way they can find a tradesperson, he explained.

“They've gone through friends and asked around, maybe there are other mechanisms like Facebook and Google, which they might try. But we solve a real problem, we find where the tradie and suppliers, who's keen and who's available with a whole lot of background information on them.

“We help them find a tradesperson. We have a lot of homeowners that come to us after the process is complete. We ask them to provide some feedback on us. They usually say they couldn't find a trade anywhere else that have been looking for months, 'Posted a job on your site, and within minutes I found three tradies',” he added.