CEG Industry Blog

We Get It. There's a Trades Shortage. But Why? And What Now?

Practical strategies for employers to attract young talent in a dwindling workforce.

📅   Mon September 18, 2017 - Edition
Jeremiah Rizzo, Construct-Ed


It seems like everyone is talking about the “skilled labor” shortage these days. If you're an employer reading this, you've probably felt the pain first hand as you struggle to keep your workforce at the right number.
It seems like everyone is talking about the “skilled labor” shortage these days. If you're an employer reading this, you've probably felt the pain first hand as you struggle to keep your workforce at the right number.

This article was written by Construct-Ed, an online learning community geared toward the construction industry. The opinions in this, and any other post written by our network of bloggers, do not necessarily reflect those of Construction Equipment Guide.

It seems like everyone is talking about the “skilled labor” shortage these days. If you're an employer reading this, you've probably felt the pain first hand as you struggle to keep your workforce at the right number.

For the few reading this that may not be aware of this issue, this basically means that there are large job openings in skilled trades industries waiting to be filled.

Everyone from residential contractors to commercial companies are struggling to find young employees that are either skilled, or willing to learn. Many would settle for “willing to learn,” but are struggling to improve their work force.

Actually, we just came across a comment online where one contractor says he's thinking about offering $50 just to show up to the interview! So yeah, it's gotten that bad.

So how did we get here?

If you didn't know better, you might think that the reason there are so many unfilled jobs in construction is because millennials are just lazy or unwilling to enter the workforce. Actually, that's not really the case. There are a number of factors that have contributed to the situation the industry finds itself in.

Here's a brief look at just a few of them:

1. The housing bubble hurt many construction businesses and halted development, causing many individuals to leave the industry.

After the housing bubble burst in 2008, many contractors and construction professionals were left suffering and struggling to find work. Business declined, and many decided to leave the trades and go into a different profession. It's great that building and construction is trending right now, but since so many left the industry in 2008, there just aren't as many professionals to do the work that's available.

2. The building economy is growing.

Dodge Data & Analytics says that new construction in 2017 will increase 5 percent. Not only that, but it's expected to continue to rise. Add to that Green Building. And by “green,” we mean both in energy and finances. Politics aside, more homeowners and businesses are going to build “green.” According to the USGBC, “by 2018...green construction will account for more than 3.3 million U.S. jobs – more than one-third of the entire U.S. construction sector – and generate $190.3 billion in labor earnings.”

3. Experienced pros retired (and are currently retiring).

Essentially, experienced professionals are retiring and taking their knowledge and expertise with them. In many situations, the companies they worked for didn't preserve their knowledge, or have a system in place to pass it down.

4. Our culture has long had a poor view of the trades.

For a long time, blue collar work was culturally viewed by many as “less important” or “less intelligent”. College was seen as the only way to make a decent living. The point is that our culture has not been kind to the trades.

What can we do from here? More important, what practical things can companies do right now to help them find more talent?

Now, the above list is by no means exhaustive. There are other reasons why we are where we are. But the question now is, “what do we do about it?” Well, if there was one simple answer, there wouldn't still be a labor shortage. But we want to humbly make a few suggestions...

1. Show youth there are actual careers in the trades that can help them meet their life goals.

It's no secret that millennials have different values than baby boomers or prior generations. But that doesn't mean they're lazy. They simply value quality of life, traveling, time with family and doing something meaningful. Many just don't understand that this can be found in honest, hard, steady work, where they get to produce something tangible and valuable. So if your company can show them how working for you helps them achieve those things, you'll do better than you would by just expecting them to show up and serve you.

And you at least have this on your side: the gig's up about college. Everyone now sees that entering college means thousands of dollars of debt, only to earn $40,000 — $50,000 upon entering the workforce. Contrast that to the trades, which may offer $30,000 — $40,000 to start — and allow employees to earn more as they progress in skill and experience: no debt necessary.

The key is showing youth various career potentials. Not many people want to enter the trades as a laborer, with no path to earning more or progressing in their career. But if they know that they can start at $15 per hour, and in 5 years (with hard work and dedication) be earning between $50,000 and $60,000, we think they'll be much more likely to consider the trades as a viable career option.

Of course, all this assumes that your company is able to offer competitive rates, which we address in #2...

2. Offer competitive pay, step up your perks, and improve company culture.

Besides showing prospective employees that they can actually make a career out of the trades, it's important to put your money where your mouth is by offering competitive pay. And that doesn't necessarily mean you need to pay 20 percent more than your competitors. In fact, according to recent studies by Harvard Business Review and Glassdoor, (younger) employees are desiring perks more than a pay raise.

Now obviously almost all (if not all) the jobs listed in those articles are soft-skills jobs: jobs like coding, HR, design, etc. But we wonder if there's something construction employers can take away from this.

You may not be able to pay $5 per hour over your competitor, but can you offer paid paternity leave, and 2 weeks' vacation (instead of 1) to start? Or, are there other ways you can streamline your operations and cut costs to be able to offer a more competitive salary?

The point is that millennials value work-life balance and flock to jobs that help them have a life outside of work. You'd be amazed how far even little things (like donuts and coffee or verbal affirmation of the work your employees are doing) can go to creating a culture where employees want to stick around.

Simply put, the “old school” mentality of little vacation time, paying the bare minimum, no time off when employees have new children and zero perks, just won't fly. You can cling to that system as long as you want, but if you do, you might be seriously hurting for employees in a few years, if you aren't already.

So yeah, we get it, you aren't a tech company. You only make money when the workers are working. But get creative.

Can you include company reimbursement for chiropractic visits to keep your employees feeling better and healthier? Can you offer free lunch once a week? Can you pay even $1 an hour higher, or more than the bare minimum? Can you give additional vacation time?

And perhaps the hardest: Can you create a culture in your company where employees invite friends to work there, and where they stick around a long time? Encouragement, a positive work force, cultivating a team that respects one another and actually enjoys working together, these are the hardest things for construction companies to cultivate.

Don't start with the assumption that you can't. Take a look at what companies in other spaces are doing and focus on what you can adopt from them.

3. Create an in-house apprentice program.

Many companies have experienced the frustration of constant employee turnover. You work hard (and spend money) to get employees in the door, only to see them turn around and leave one day, week or month later.

Of course, part of reducing employee turnover is the things we already discussed: creating a good culture, paying good wages and helping prospective employees see that there's a future at your company. But at the end of the day, you also need to help them get there.

Compare these two companies:

Company A spends a few hours running new hires through the necessary safety talks, gets them set up with their gear and sends them out to the field. They don't follow up except every 6 months for an employee “review” (if that!). The new hire gets thrown into a crew without really knowing they're doing. They try to learn, but the bulk of their learning experience comes from getting yelled at or mocked from others on the crew. Once they've mastered their first task (say, debris management), they want to learn more — but there's no one to teach them. Six months later, they're still in the dumpster. They see no light at the end of the tunnel and they leave. Time for Company A to find another employee.

Company B creates an apprenticeship program. New hires are assigned to designated trainers or employees in the company, who then walk them through the job step by step. There's a set track: the employee spends 3 to 6 months at level 1, the next 6 months at level 2, and after 1 year is promoted to the next rank. That employee sticks around, because they see progression and growth in their career. They know where they are, what the next step is, and see that someone is helping them get there. Meanwhile, the company benefits because they've retained the employee and have another skilled worker to add to the workforce who may someday become a foreman or superintendent.

4. Pay for employee development.

If your employees show initiative and want to take their management, leadership or trade skills to the next level, see if there's a way you can pay for further education. And no, this doesn't necessarily mean a local college course. There are tons of online courses available or 2 day expos and conferences you can send them to.

Investing in your employees, and helping them better themselves and their knowledge will show that you care, and your company will benefit as they bring their newfound skills to bear on projects moving forward.

There's no easy solution, but there is hope.

At the end of the day, there's no quick answer to fix this issue. The reality is that you're only in control of part of the solution. You can't change how the culture views the trades, and you can't prevent housing bubbles or control massive economic growth.

So do what you can:

  • Take care of your employees, show that you care, and work hard to create an awesome culture and a team that enjoys working together.
  • Give what perks you can, and don't pay bottom dollar.
  • Show employees how working for you aligns with their goals to do meaningful work and live a fulfilled life.
  • Help your employees develop. Show them a career path. Apprentice them, and help them develop as people and as workers.
  • We humbly suggest that these things are practical steps you can begin today toward building a healthier workforce, even in times like these.