Here’s an in-depth look at what defined 2024 and what we can expect in the upcoming year. Top issues this year included workforce challenges, rising costs, and the economic landscape. These have driven significant shifts. In the recent R&R 360 webinar featuring industry experts, these topics were a key part of the discussion.

Spotlight on Restoration Contractors

Projects remained a substantial revenue source for contractors. According to an industry market research report, half of the respondents focus on remodeling, with around 20% specializing in water damage restoration ⁽¹⁾. Overall, companies report annual revenues between $1 million and $4.9 million, offering services ranging from mold remediation to cleaning, disinfection, and odor control. Optimism is high: 56% of contractors expect revenue growth from restoration and remediation work, especially residential contractors (53%), compared to their commercial and institutional peers. Looking ahead to 2025, we anticipate this optimism to continue, with an expected increase in demand for comprehensive restoration services as climate-related incidents rise.

The Workforce Crunch

Finding skilled employees continued to top the list of challenges for contractors in 2024, according to an industry-wide survey. Hiring and retention difficulties, coupled with inflation, affected budgets. On average, companies allocated between 25% and 35% of their budgets to labor, with some relying more on subcontractors to navigate retention challenges ⁽²⁾. Companies spent an average of 14% of their budgets on training, favoring hands-on and field training methods ⁽³⁾. 

Growing Emphasis on Sustainability

Sustainability for many was a primary focus. Initiatives to improve safety and reduce the use of harmful chemicals took precedence. Inflation and supply chain disruptions continued to complicate procurement plans for things like essential materials and equipment. We anticipate a stronger push towards sustainable practices, with more contractors adopting eco-friendly materials and methods to meet consumer demand and regulatory requirements.

What Homeowners Want

Clear communication and reputation were at the top of the list for homeowners. Most relied on word of mouth, search engines, and past contractor relationships, with online reviews playing a critical role—72% rated them as highly important ⁽⁴⁾. A gap often existed between what homeowners valued most and what contractors assumed was important. We expect homeowners to continue prioritizing transparency and trustworthiness, with an increasing reliance on digital reviews and online presence in their decision-making processes.

Legislative Landscape

The Institute of Inspection Cleaning and Restoration Certification (IICRC) and National Organization of Remediators and Mold Inspectors (NORMI) continued to work on initiatives for mold legislation. These initiatives are expected to remain a top priority for the upcoming year, with more regulations and guidelines being introduced to ensure safety and efficacy for our industry professionals and customers. Other key initiatives include fire restoration and trauma and crime scene cleanup. States like Georgia have already adopted laws or regulations to regulate these services.

Mycotoxins

Mycotoxins, hazardous byproducts of mold, remained as a top health concern. Effective remediation was crucial to ensure consumer safety and prevent shortcuts that compromise health. Addressing these contaminants thoroughly was essential, and legislative measures began to play a bigger role. We expect legislative focus on mycotoxin management to intensify, promoting stricter guidelines and innovative remediation techniques to safeguard the public’s health.

Training Programs and Certification

Labor shortage remained a problem, and training programs became a key strategy for enhancing workforce retention and job quality. Certification bodies like the IICRC and NORMI expanded on legislation to help promote best practices across the industry. One great example is the Mold Remediation Registration Act (SB 1087) in Illinois. An expansion of these training programs and certifications, aimed at equipping contractors with the latest knowledge and skills needed to meet evolving changes in rules, regulations, and legislation.

Tech Advances in Restoration

From cutting-edge equipment to sophisticated environmental monitoring systems we saw great growth. We saw advanced tools implemented to streamline processes and procedures. This will also remain at the forefront for the new year. We expect to see the integration of AI and IoT technologies to help enhance precision and efficiency.

Building Stronger In-House Teams

Many companies diversified their services allowing them to offer integrated solutions, from initial assessment to final cleanup. In-house marketing teams became increasingly vital, boosting digital marketing efforts to connect with potential clients more effectively.

Sustainability remained a critical focus as companies adapted to growing consumer demand for eco-friendly practices and materials. We anticipate an increased reliance on data-driven marketing strategies and a continued emphasis on sustainable business practices.

Looking Forward

These trends highlight the evolving demands of the restoration and remediation industry. Staying informed on developments, technology advancements, and market needs will continue to influence the industry’s growth. Understanding these priorities help the industry position itself for a more successful 2025.

References:

1. IBISWorld. Restoration & remediation market research report. Retrieved from https://www.ibisworld.com/united-states/market-research-reports/restoration-remediation-market/
2. CriterionHCM. (n.d.). What is labor cost percentage? Retrieved from https://www.criterionhcm.com/blog/labor-cost-percentage#:~:text=Ideally%2C%20the%20resulting%20percentage%20should,may%20be%20higher%20or%20lower
3. Associated General Contractors of America. (2024). Workforce survey analysis 2024. Retrieved from https://www.agc.org/sites/default/files/Files/Communications/2024_Workforce_Survey_Analysis.pdf
4. Invesp. The importance of online customer reviews [Infographic]. Retrieved from https://www.invespcro.com/blog/the-importance-of-online-customer-reviews-infographic/