Forecast of labor shortages and impacts to business practices
We are expected to see a gap of nearly two million open positions by the end of the decade for available skilled trades positions, leaving millions of roles unfilled.
By the numbers:
According to an ISHN report, for every three boomers that leave the trades, one Gen-X or Gen-Z’er joins the workforce.
The construction industry faces a gap of half a million workers according to Construction Dive.
These gaps are expected to widen as federal money flows into badly needed infrastructure projects around the country — calling for even more labor.
The application rate for technical jobs like plumber and electrician dropped by 49% between 2020 and 2022, NPR reports.
So what can you do about this?
Now is a GREAT time for young workers to get into the trades. Wages have been rising faster than inflation and there are a large number of unfilled jobs. Training for these roles is usually shorter and less expensive than a 4-year degree, but the average full-time salaries are on par or above what recent college grads can pull down.
Staffing is going to continue to be a challenge, making recruiting and employee retention more important than ever. Some things to consider in terms of attracting and keeping your team:
Is your pay STILL competitive? You should look at this annually and compare what you are paying to other companies in your market (not the nation at large). If your team can leave for a 10% raise, you want to know what you are working against when you consider other benefits you offer. Pay is just one component of compensation…but it’s a big one!
The working conditions that you offer can be a great talent attraction tool AND help keep your team from running out the door. Compare the cost of some new monitors or nicer office furniture to the cost of hiring or being short staffed. Also, can you offer some level of flexibility in WHERE work is getting done? Not all jobs can be remote but not everyone needs to show up in an office every day either.
Your best people will often want to grow professionally. Whether that is to set up their own businesses some day or just to keep getting better at their jobs, career growth is often reported as a top priority for most employees. What are you doing to continually level up your teams?
You could bring in outside speakers or trainers.
Create a monthly learning round table or workshop for new skills.
Set up a certification program for people to level up to bigger paychecks by demonstrating mastery of important skills.
Money is an important aspect of any person's job, but it’s not always the thing that motivates or makes the most memorable impact. Many people will go above and beyond to earn recognition, win a contest or stand out from the crowd. Think about how you are offering additional perks to the team to incentivize the right behaviors. You can also offer relatively low cost benefits, such as:
Gym or health memberships
Bring in regular team lunches
Sponsor a local sports team for them join
Nice company gear/swag that they can wear and feel proud of
Make a point of acknowledging those team members who go above and beyond. Celebrate things like tenure or promotions in a big way. When your entire team sees that recognition is earned but also given, you’ll find people working to be part of that culture of performance.
The market for trades is growing faster than the economy. Recent data shows an annual growth rate in the US of 36.21% for the home services space. This presents an opportunity to capture a slice of what is expected to be an ever-increasing pie.
If you’re a growing business, you likely won’t be able to service all the available market opportunities that you have. With shortages of labor becoming more pronounced, it is becoming increasingly difficult to say ‘yes’ to every job.
Consider your prospect screening process. How are you determining who you want to work with? Do you have qualifying questions outlined for your front-line teams? How are you providing transparency to prospects to help them self-select? Is your team trained on what to look for in a “good” vs “bad” prospect? How accurate are those assumptions and have you ever actually measured or tested them against your outcomes?
The cost of a ‘bad customer’ is going up. When you have more capacity than opportunity, the cost of a bad customer is fixed at the lost revenue on that job. However, if you have alternative opportunities you COULD be working, then this cost is compounded by the loss of the better opportunity (who would have paid you in full). In short, the busier you are, the more it costs to take on a bad job/client.
How you prioritize work is more important than ever because of the shortage of capacity in the trades sector. Toss in the availability of online searches for services providers (making that first touch point more competitive than ever) and it is more important than ever to put your teams on the jobs you know you want (and not waste time on the ones that are a bad fit for your company).
Tools like GlassHouse can help you reduce the time you spend on low-quality leads and prioritize the types of customers that you ideally WANT to work with.