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Spilling the beans, 4 things you need to know about the ID industry in SG

 

In this article, we are going to be talking about what real interior designers do vs renovators. There’s a distinct difference and it's not just about qualifications. 

 

Group of smart asian architect interior design team consulting with constrction engineer work brainstrom meeting with house project blueprint and home mockup in house renovation structure background

Photo: Getting good IDs nowadays are not as easy as it seems

 

1. Designers are not just home renovators

 

Now if I say the word, “renovation” the first words that may come into your mind, could be “HDB” or Home renovation or cowboy contractors that disappear with people’s hard earned money for home renovations.

 

Renovation is a generic term that is used to describe the rebuilding or remodeling of a space and hence we do more than just homes. Spaces like restaurants, hotels, retail shops and boutiques are designed and built by people like us. In fact, there are commercial designers that only specifically handle commercial projects and in the span of their career, never once touched a home renovation project. 

 

The main reason most people tend to associate designers and renovation to home remodeling is largely due to the way Singapore’s home buying culture. About 80% of home ownership in Singapore are actually HDB properties and because of these numbers and frequencies, it becomes a ‘rite of passage’ for anyone who is an HDB home owner to have engaged with a designer or a renovator to do up their homes one way or another. 

 

For these first-time homeowners hunting for a good deal, going to showrooms talking to designers or renovators has become a common affair and for some unfortunate homeowners, they end up with bad experiences. And so, because of these bad experiences accumulated over time, it has somehow affected our industry and helped perpetuate this impression that designers only do home renovation and we are part of the renovation scam club and are out to make your life a living nightmare. It does not help that CASE actually reports renovation as the leading source of complaints in Singapore year after year.

 

https://www.channelnewsasia.com/singapore/home-renovation-contractors-complaints-rise-2022-case-2841091

 

https://www.todayonline.com/singapore/complaints-against-renovation-contractors-almost-double-first-half-2021-consumer-watchdog

 

Photo: Incomplete renovation causing headaches?

 

2. So why is renovation such a nightmare?

 

As a disclaimer, I must state that there are many reasons leading to this. I can only name a few reasons and it may not represent the true data on the ground.

 

As mentioned earlier, home renovation is like a rite of passage for all first-time home buyers. So being first time buyers doing renovation, there is this sense of euphoria and excitement. This usually leads to impulse buying or emotionally triggered decision making. Essentially, home renovation is an emotional affair. Logic usually makes way for first time home renovations. You may even call it a ‘vision of grandeur’ which usually means a high expectation for the first dream home project. Adding to the mix and on the other side, you have the designer or the salesman or ‘sales-designer’ (the hybrid version of a designer but essentially is after the sale of your renovation works). Now if this designer is indeed a graduated interior designer from a reputable design school, then he or she could be either a seasoned professional or a freshie. If this person is a freshie, then likely you have a situation where the blind will lead the blind. That’s when the nightmare begins.

 

So just imagine this, the freshie hasn’t bought or owned their first property much less renovated their own home. And yet they are put in a position to design and build your property. Under such circumstances, whatever could go wrong is definitely going to go wrong. I mean, would you get into a plane flown by a pilot who only knows the theory of flying but has never flown before? Of course I can’t say that there will not be situations where fresh graduates will not rise to the challenge and perform beyond expectations, but ask yourself this, “how often does that happen in life?”

 

For those responsible renovation firms, they will usually pair a freshie with a seasoned and senior staff so that there is some form of mentorship. This buddy system will mitigate risks and they will help ‘blind spot’ each other. The freshie will have fresh ideas and may even inspire the somewhat ‘jaded’ senior sales staff. While the senior staff can troubleshoot and guide the junior staff to avoid issues or loss.

 

Button bookkeeper calculating white calculator

Photo: Worrying about high % profit from your ID? 

 

3. Profiting as an designer/salesman

 

Then you have another scenario where the designer serving you is not a designer by formal training but by experience. We call these designers, ‘Technical Designers’. There are good and experienced technical designers but like all industries, there are also bad apples. 

 

In Singapore, we have a unique system of hiring these salespeople, sales or technical designers to push for sales numbers and the company does a profit-sharing system with them. 

 

In a typical home renovation project, the profit margin is around 20%. So let's assume it’s a $30,000 renovation and the profit is around $6,000. With a profit sharing scenario of 50-50, the company keeps $3000 and the sales designer keeps the other half. In many of these instances, these sales designers are not salaried at all, their only source of income is the profit mark up and the profit share with the company. 

 

Let’s just take a minute to digest this information. The person serving you is not only not formally trained in design, he or she is only incentivized in working on your project through a profit-share pay scheme. In this scenario, I personally find that there are potential conflicts. 

 

Price vs value text written on wooden cubes


If profit is what everyone in the company is after, when does the integrity of the design work or materiality come in?  In the pursuit of profits, will the designer or salesperson still propose innovative, unique, hard to do designs and will it come with better materials, finishes and hardware? Or, will we see the sacrifice of design, materials over profits?

 

This method of remuneration for sales designers in this part of our industry has been in practice since the late 90s. I personally do not think it is the right way to sustain the industry and the practice. In fact, profit sharing models usually means that companies will erode their cash flow in the long run. While it seems that not having an overhead to sustain the team sounds like a good idea in the first place, just think about the fact that the firms are actually not preserving their cash in the company. How then does the company grow and recruit talents or even re-invest in growing the Company? 

 

When the pursuit of the design is compromised by the pursuit of profits then the standard will drop. Just have a look around at some of the international design awards organized by our local associations, you will find that foreign design entities have been hogging the limelight and winning all the big prizes across the board. 

 

While the low number of awards may not be a direct relation to how the home interior design/renovation industry pays their staff. There is definitely an impact in one way or another, because innovation is stifled, creativity is a troublesome affair and not encouraged. Doing the minimum to get by is the best way to ensure profitability from the business point of view. 

 

This must change and we are already seeing the impact of the internet changing the way consumers behave. More and more consumers are reading up and getting familiar with the materials, design concepts, prices and some don’t mind going the extra mile to hunt for the type of materials, hardware to enhance the value of their home project. And the keyword here is VALUE not just price. 

 

In my personal exposure to the market, the homeowners and clients we have today are not only savvy but have already woken up. To me, they are no longer “the blind being led by the blind”. In fact, in the last few years, we are seeing the emerging pattern of them leading the design and material usage in their own home projects. These Clients having their own voice and their own influence had led the way in influencing other home owners as well by tapping on social media platforms like Tik Tok and Instagram to influence and educate fellow homeowners on design matters, product knowledge and pitfalls to avoid. These homeowners have also built up substantial following and we call them KOCs (Key Opinion Consumers)- https://www.instagram.com/home.swee.home/ Many of these KOCs are savvy and are effecting tipping the scales in the interior design industry in Singapore. For them, they see the role the renovation firms play are merely facilitating with their HDB license and contractor support and see that they offer little value creation. 

 

Apartment houses

Photo: HDB dwellers consists of 80% housing in Singapore

 

4. The home ID business is flawed

 

In 2019, based on records, there are about 14,500 units of brand new BTO flats released. Let’s not forget the resale homes that are transacted for 2019, and it is at around 23,714 units.

 

For non-landed private homes, the number of transactions is around 2950 units. So if we take these numbers from 2019 and add them all up we get about 41,164 units that are released or transacted. So let’s assume that each of these units all go through some form of renovation and using $25,000 as an average spending amount per unit, the total renovation spending for non-landed and HDB projects works out to a whopping $1.029billion dollars in 2019!

 

For a $1- $2billion industry, I find the current state of affairs quite troubling. We have renovation licenses issued for the carrying out of renovation only for HDB projects. For private homes, no such licenses are required. To open up an interior design company or practice here, there is also no need for you to possess relevant qualifications to register our type of business. In fact, the renovation firm that you currently work with could be totally run by salespeople with no experience or qualifications in design or renovation and will only outsource their design work and renovation work to subcontractors. Let me explain with a simple graphic. 

 

A picture containing text

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As you can see this chart shows how you, the client, engage them and how these firms in turn, engage their subcontractors to do everything from the drawings to the tiling to the carpentry works for your home. This kind of middle-man business model with a profit share scheme has been the modus operandi for many of these firms for more than 2 decades in Singapore. They largely operate like a shell business and perform like an agent. 

 

There are other accreditation schemes like Casetrust and some from the industry associations that advocate professional code of conduct and practice. As an accreditation scheme, they help Consumers distinguish the good versus the bad but as of now and unlike the HDB or BCA license, they are not mandatory nor regulated by the authorities. Further to accreditation, it may not cover other details such as Company capabilities, capacity, consumer feedbacks and many more. That is why SIXiDES has come up with a comprehensive verification system to identify, audit and award easy to identify ‘badges’ for Consumers to identify these designers and their capabilities. You can find out more here: https://www.sixides.com/badges

 

As of the current moment in Singapore, home renovation and contracting work seemed to have the lowest entry barriers. Most of these home renovation firms recruit people who do not need to possess relevant skills and credentials. In fact, they prefer freshies who have no knowledge and skills and favor those who can speak well. This explains why when you head out to these home renovation firms, you find a lot of foreign staff who play the role as a designer, when in fact, their previous jobs could be MLM sales, masseuse or gardeners.

 

So, then how?

I just wanted to take this chance to explain the flaws and failings in this industry. Home renovation consumers need to know more and only when the buying power, from the top of the food chain, knows about the ways in which these home renovation firms function, operate and conduct their businesses. Only then, can the consumer begin to make an informed choice and begin to start a change. 


Hand and word chance, business


Your decision in appointing a firm that values design integrity, investing in staff grooming and progress, is ultimately going to help make an impact in the long run. Errant businesses will learn these values and adapt in order to survive and grow. What better time than now? After the pandemic, the economy is already clearing the landscape and is somehow forcing many industry players to pivot and change the way they work. Consumers can take this opportunity to use the voice of the consumer to change the way the game is going to be played from this point forward!



Remember that we are all pursuing value here. For the serious practitioners, we all want our industry to grow, to innovate and to groom the next generation of designers who can make a difference in the society. Legitimate practices firmly believe that they can make the money and still give consumers what they want in a fair, dignified and transparent way. 

 

Posted on 2 September 2022

 

Astley Ng

The Designerd

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