ServiceTitan

Over 50% of Contractors Cite Labor Shortage, Overhead Costs, and Supply Chain Constraints as Biggest Ongoing Challenges

ServiceTitan, a leading software platform built to power the trades, today released its second annual Commercial Service Report, highlighting current trends and market sentiment for the commercial industry in 2024. The report surveyed over 1,000 commercial contractors across various trades and found that in the face of economic challenges, contractors remain resilient and are doubling down on sales and marketing while adopting new technology to help drive customer and business growth.

“Commercial contractors are essential to building and maintaining our critical infrastructure across North America – they keep our businesses, schools, hospitals and more up and running at all times,” said Alex Kablanian, General Manager of Commercial & Construction at ServiceTitan. “These contractors have displayed incredible resiliency, navigating formidable economic challenges in recent years. Adopting new technology has played a significant role in empowering them to accelerate and achieve profitable growth in their industry. The commercial contractors who are harnessing the power of software and innovation now have the tools they need to reach new heights and greater potential than ever before.”

ServiceTitan’s findings provide a unique perspective on the industry’s performance while highlighting key developments shaping the path forward.

Contractors focus on new growth in 2024

Despite market uncertainties and macroeconomic challenges, 39% of commercial contractors expressed optimism for 2024 – a 17% increase compared to last year’s study, when only 22% of contractors had a positive outlook for 2023.

While commercial contractors remained resilient despite economic challenges in recent years, a significant majority of contractors’ revenue (71%) either decreased or stayed the same in 2023. In light of this, two-thirds (67%) of commercial contractors are focused on growing revenue in 2024, followed by improving cash flow (30%), optimizing processes (33%), and retaining customers (26%).

Supply chain disruptions expected to persist

For most contractors, ongoing supply chain challenges make sourcing parts (53%) and equipment (34%) difficult. The report also highlights how the effects of supply chain disruptions extend to project timelines—only 14% of commercial contractors delivered more than 90% of their projects on time. Material lead time also increased for 52% of commercial contractors; in comparison, equipment lead time increased for 62% of commercial contractors.

In assessing how contractors navigate these challenges, the results indicate that nearly two-thirds of contractors (63%) keep inventory on hand, and roughly a third of businesses (37%) order supplies as needed. Further assessment of supply chain management reveals that 50% of commercial contractors order directly from the supply house, with the rest split evenly between vendor and manufacturer purchases.

Amid labor shortages, contractors increase technician salaries

Labor shortages (53%) and overhead costs (50%) are cited as the primary risks to achieving contractors’ 2024 goals, with economic recession (49%), increase in material prices (35%), and access to working capital (26%) rounding out the top five risks.

Just as ongoing labor shortages make it challenging for contracting businesses to find skilled workers, the shortage of talent and the increased cost of living make salaries a determining factor in attracting and retaining technicians. In response to these trends, 73% of respondents still plan to increase technician salaries this year.

Software adoption accelerates

Current trends and market sentiment point toward software as a leading solution to streamline commercial contractor operations and improve efficiencies without increasing overhead. In fact, the average commercial trade business uses 4-6 software providers, with a high adoption rate (70%) of Field Service Management software. Correspondingly, a significant 43% of businesses plan to increase their investment in sales and marketing activities in 2024.

With technology becoming increasingly essential for contracting businesses, it is key to take full advantage of the capabilities and innovate accordingly. Based on the survey, there is room for improvement—while 30% of survey respondents identified improved cash flow as their top goal, 20% of contractors still take more than a week to send invoices, and 33% of customer payments are more than one week late.

To review the full findings and key takeaways, download ServiceTitan’s Commercial Markets Report here.

About the research

This research was conducted by Thrive Analytics on behalf of ServiceTitan, polling more than 1,000 commercial service contractors representing a variety of geographical regions, business growth stages, and revenue levels. This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data.

ServiceTitan Will Offer Synchrony Financing Within its Software Platform to Reduce Friction and Aid in Closing Sales for Contractors

Synchrony (NYSE: SYF), a leading consumer finance company, and ServiceTitan, a leading software platform built to power the trades, today announced the integration of Synchrony financing into the ServiceTitan platform, making it easier than ever for contractors to offer financing to their customers.

“Contractors love ServiceTitan because it intuitively handles their workflow and that makes it easier to close business and increase sales,” said Curtis Howse, Executive Vice President and Chief Executive Officer, Home & Auto, Synchrony. “Teaming up with ServiceTitan will make the sales process seamless, helping businesses across industries as well as the customers they serve.”

Through this new partnership, Synchrony will enable contractors in the field to offer customers the option to apply for financing through ServiceTitan’s software platform, leveraging Synchrony’s direct-to-device application process and pre-fill technology. After a customer applies, the contractor will receive the application response and, upon approval, will be able to proceed with the sales process—all within ServiceTitan.

“Our top priority at ServiceTitan is providing contractors with the solutions they need to grow their business while delivering the best customer experience possible,” Anmol Bhasin, Chief Technology Officer, ServiceTitan. “Through our new partnership with Synchrony, we are able to offer our customers even more options when it comes choosing a financing process.”

Synchrony currently serves tens of thousands of businesses in the home improvement sector, many of which already use ServiceTitan, and the new partnership creates the opportunity to serve those partners better with ServiceTitan’s industry-leading platform.

New AI-assisted smart cameras and vehicle telematics increase technician safety, reduce costs and optimize workflow

FieldRoutes, a ServiceTitan product and leading cloud-based and mobile SaaS platform for field service businesses, today announced an integration of ServiceTitan Fleet Pro with FieldRoutes’ software. This new, integrated solution enables pest control companies to manage their fleet more efficiently, leading to greater cost savings, improving driver safety improvements, and ultimately increasing ROI.

With the new integration, FieldRoutes customers can directly leverage Fleet Pro to manage and oversee operations across the entire fleet management lifecycle. Pest control businesses are able to access real-time and historical fleet data from a vehicle’s GPS system and AI-assisted smart cameras, which can streamline costs and improve overall performance. Using Fleet Pro can also help technicians minimize accidents by nearly 75%, reduce distracted driving, and encourage regular vehicle maintenance.

“Our customers are facing increasingly complex challenges, from staffing shortages to fluctuating fuel costs, adding pressure to their roles,” says Mark Tipton, CEO of Aspire Software. “Business owners have less time to focus on strategically planning daily routes, when to schedule vehicle maintenance, or where to cut costs. This integration enhances Aspire’s existing solutions, empowering our customers to meet the evolving market, ensure both driver and community safety, and propel them forward.”

Key capabilities of ServiceTitan’s Fleet Pro include:

• Eliminate Side Jobs – Detect and alert unauthorized vehicle usage through GPS tracking and geofencing.

• Maximize Billable Hours –  Receive regular service reminders to stay on top of maintenance and prevent unexpected breakdowns.

• Prevent Unsafe Driving – Stop distracted driving with real-time, in-cabin driver alerts.

• Protect Against Liabilities – Leverage video event capture in real-time with in-cabin alerts via text and email.

• Facilitate Driver Coaching – Driver scorecards track technicians’ distance, drive time, idle time, fuel use, and unsafe driving behavior.

Faced with continued labor shortages, increasing customer demands, and a focus on drivers’ safety, businesses are adopting these tools to stay competitive in the field, cut costs, and improve performance. According to a 2024 Fleet Technology Trends Report, 70% of fleets use fleet technology, with 50% for managing field service and workforce (scheduling, dispatch, communication). Of the fleets surveyed, 77% using video technology protected themselves from false claims, 48% lowered accident costs, and 44% reduced insurance costs.

“Our customers rely more frequently on real-time data and insights from their vehicles and fleets to make better-informed business decisions and enjoy a competitive edge,” says Anmol Bhasin, CTO of ServiceTitan. “We are committed to equipping contractors and technicians with the tools and technology they need to run and grow their businesses safely and efficiently. This new integration with FieldRoutes makes this goal even more attainable.”

For more information about ServiceTitan’s Fleet Pro capabilities, visit: https://www.fieldroutes.com/pro/fleet

Report finds resilient businesses are adopting technology, outsourcing, and focusing on customer relationships

• 29% of contractors plan to invest in technology this year to increase revenue, customer retention, and customer acquisition.
• 27% of contractors have outsourced services as a solution to streamline their processes, scale, and grow revenue
• Repeat customers accounted for 39% of revenue and 71% of business volume for contractors this year

ServiceTitan, a software platform built to power the trades, has released its first Residential Services Report, providing insight into the challenges and opportunities facing the industry, market outlook, business strategies, and emerging trends. These results highlight survey responses from more than 1,000 residential service contractors around the U.S.

“Residential contractors provide essential services that keep our world running, and that’s not going to change anytime soon”, said Vahe Kuzoyan, president and co-founder at ServiceTitan. “These contractors remain resilient and innovative amidst a year of diverse outcomes, using new strategies and purpose-built technology to allow them to focus on operational excellence and building lasting relationships with customers.”

Tempered sentiments reflect market uncertainty 

Economic uncertainty, labor shortages, and reduced access to working capital have created a strain on businesses across the US, and in response, residential contractors have a mixed outlook for the current year. According to the survey, over half (67%) of contractors have neutral expectations for the future, 18% are optimistic, and 14% feel pessimistic.

Strategies to combat supply chain disruption

The tailwind effects of COVID-19, increased natural disasters across the nation, and global warehouse capacity issues are resulting in extended supply chain disruption. Contractors reported difficulty obtaining supplier parts (64%), raw materials (47%), specialty materials (44%), equipment (23%), vehicles (17%), and sustainable “green” materials (14%). Supplier diversification can increase supply chain resilience. 60% of contractors purchase directly from a supply house, 23% directly from the manufacturer, and 17% directly from the vendor.

Outsourcing is one effective strategy for contractors looking to increase stability and growth. Approximately one-third of businesses (27%) have leveraged outsourcing as a solution to streamline their processes. The three most common areas for outsourcing included call centers (76%), customer service (49%), and digital advertising/SEO (32%). Outsourcing allows businesses to centralize their operations and create a more consistent, reliable customer experience while scaling.

Developing trusted, deep customer relationships 

Customer relationships, both existing and new, play a major role in business success. Repeat customers accounted for 39% of contractors’ annual revenue, and satisfied customers are also more likely to offer referrals or recommendations, which can help generate new leads. Respondents reported 71% of business volume in the last year came from word-of-mouth referrals. Growing revenue (56%) as well as customer retention (50%) and customer acquisition (46%) were all top priorities for residential contractors in 2023.

Attracting and retaining high-performing technicians and employees is also top-of-mind, as competition for talent remains fierce amidst a skilled labor shortage. In response, businesses are being very intentional with recruitment and retention practices. Over one-third of contractors surveyed  (38%) will increase technician salaries between 4% or more as a strategy to attract and keep top talent, while 39% of respondents stated that they plan to increase technician pay by 1-3%.

Continued investment in technology presents new benefits across the business 

Through emerging technologies like automation and AI, contractors can offload much of their administrative work and focus their time on boosting productivity, optimizing resources, and doing what they do best: serving customers and building lasting relationships in their communities. Survey results indicate that contractors are leveraging technology primarily for business management (63%), field service management (48%), accounting (42%), enterprise resource planning (38%), payroll (33%), and human resources (33%).

“AI is changing the way we work in the trades,” said Jason Brady, Owner and CEO at Above & Beyond Heating & Cooling. “We’re going to be able to stop focusing on the insignificant things, and really focus on the things that matter to the business. New technology isn’t always perfect, but it’s helping contractors tackle some of the menial tasks of the job so they can focus more on servicing customers.”

Technology is not only freeing up resources, but also improving worker satisfaction, enhancing safety, and creating more attractive career paths and opportunities for professional development. With technology as a key tool to achieve business goals, 29% of residential contracting businesses plan to invest in technology this year to increase revenue (56%), customer retention (50%), and new customer acquisition (46%).

To view the full findings and key takeaways, download ServiceTitan’s Residential Service Report here.

About the research

The survey was conducted on behalf of ServiceTitan by Thrive Analytics, an independent third-party research provider and a leading digital marketing research firm, polling more than 1,000 residential service contractors representing a variety of geographical regions, business growth stages, and revenue levels. For the purposes of this survey, a “residential service contractor” is defined as any business generating 60% or more of their revenue from residential services. This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data.