The Skilled Trades Gap

The Skilled Trades Gap Affects Everyone — Here's Why You Should Care

Jason Burns
Sr Content Strategist

Posted 11/19/2019

The skilled trades gap is real, and it's a concern for people of all ages, backgrounds and careers. You don't have to be a construction foreman to experience a negative impact because other companies are struggling to fill skilled jobs in niches such as plumbing or building.

Find out more about the skilled trades gap, why you should be concerned and what you can do to help solve the problem for the future.

The Skilled Trades Gap by the Numbers

In 2018, employers across the nation struggled to fill millions of positions because there weren't enough qualified workers for the jobs — which totaled around 6.7 million. And experts in various industries don't see an immediate end to these challenges because not enough people are entering training programs for these types of jobs.

In recent decades, many industries have seen job gains, including:

  • Mining
  • Logging
  • Manufacturing
  • Construction
  • Transportation
  • Utilities
  • Trades such as plumbing, HVAC and electricity

As companies across all these industries struggle to keep workforces balanced to meet consumer needs and support market growth, the impact of these shortages is beginning to trickle down to other businesses and, ultimately, the consumer.

How the Skilled Trades Gap Affects Everyone

Think you're getting off the hook because you don't work in one of these fields? Unfortunately, everything in the market is ultimately connected. Here are just a few ways skilled trades shortages are impacting your life, budget and future.

Increased Home Prices

Close to 80% of construction companies are looking to add to the payroll in 2019. But actual projected growth for the construction workforce for the entire next decade is less than 1%. Part of the problem lies with the skilled worker shortage. But the frustrations aren't left with builders and real estate investors. They actually arrive on the doorstep of homeowners and buyers in the form of increased home prices.

It's basic economics: The demand for skilled workers far outpaces the supply, which means companies must pay more for the workers they do have. Around 60% of construction companies are increasing base pay to attract workers, and close to 30% offer bonuses and other financial incentives. Around 25% said they spent more on benefits or raised employer contributions to retirement accounts to make jobs more attractive to the workforce.

And since everyone is hiring, workers in the industry are often free to leave one job for another, contributing to rising attrition rates and even more costs. According to research and analysis from the Engineering News Record, the cost to replace a skilled worker such as a plumber is $26,000 on average.

Proactive builders and construction companies have started to promote internal training and apprenticeship programs and spend time and resources marketing their open positions, and that costs money too. All these costs are rolled up into the expense of building, and that means an increase in prices.

Delays in Construction

If an increase in the price of new buildings doesn't worry you, consider the fact that worker shortages mean delays in many projects. For example, an upscale condo project scheduled for completion in early 2017 in Florida pushed well past the deadline, leaving buyers on the hook until a completion date much later in the year.

It's a story that has repeated itself across the nation over the past few years, impacting all types of buildings. From single-family homes to massive projects such as hospitals, delays are extending move-in dates and causing scheduling, financial and lifestyle frustrations for everyone.

Lynn Osborne has experience with these types of delays on two home remodels. One of the renos, which was a New England beach retreat, was scheduled for completion in June 2018. As of June 2019 — a full year behind schedule — the contractor is still working on the property. She reported that he's doing a lot of the work himself and is stretched thin. Another remodel Osborne was involved in didn't fare much better, even though the contractor on that job used sub-contractors for various jobs. Osborne said the sub-contracts often arrived late, didn't show at all or completed shoddy work, which delayed the entire remodel.

Osborne's experiences are far from unusual, and they say a lot about the state of the skilled trades gap. When there aren't enough people with the experience and know-how to get jobs done, the results can include:

  • Untenable delays in projects that derail business or personal goals.
  • Poor quality work as contractors rely on less-skilled workers out of necessity or skilled workers rush to complete too many jobs within impossible timelines.
  • Added expense due to delays (for example, homeowners having to rent while they wait for construction to be completed or the price of goods going up because building took too long).

Delays and Increases in Transportation Costs

From residential delivery to long-haul trucking, the transportation industry is seeing many of the same challenges as the construction industry faces. The results are similar: rising shipping costs and an inability to rely on estimated delivery times. Even companies such as Amazon are fighting this battle and struggling to balance a growing reliance on online orders and shipping with a shortfall in the workforce.

For the general population, the frustrations in this arena can include:

  • Dealing with shipping delays that impact your lifestyle or personal or business projects.
  • Dealing with lost or damaged shipments.
  • Dealing with delays in travel caused by worker shortages at airlines or rail stations.

Challenges Finding Skilled Service Providers

Another way the skilled trades gap affects everyone is that it reduces your options when it comes to hiring skilled service providers. Whether you're looking for a plumber, HVAC repair person, electrician or carpenter, you may find that:

  • Your choices are limited and probably not expanding year-over-year in most areas; people simply aren't taking up the mantle of the skilled trades at the rate the market demands.
  • If you can find a skilled service provider and they're good at their job, they are probably busy; that means you're more likely to have to wait on someone to show up even in what you might consider emergency scenarios.
  • The imbalance between supply and demand means more people are willing to settle for mediocre services because the other option may be no service at all; that increases the chance you'll deal with lower quality work.

Home and business owners are already dealing with these issues, but the challenges will likely grow as Boomers retire without anyone to replace them in the market. Some young people are choosing apprenticeship routes, but a National Association of Home Builders poll indicates that it's not close to enough. Only 3% of individuals age 18 to 25 who had a career path plan said that it involved a construction trade.

Potential Long-Term Market and Economic Damage

Delays in a single construction project are frustrating and costly for those involved. Delays in the majority of projects cause knock-on effects across the entire economy. The same can be true for all of the issues cited above. Just some of the long-term issues that could arise if the skilled trades gap isn't addressed include:

  • Housing and real estate shortages that skyrocket the cost of property.
  • Safety risks related to unsupported infrastructure because there aren't enough people with the know-how to keep buildings, roads, bridges and other critical elements maintained.
  • Costs and security concerns that might arise from the need to import skilled workers to take on critical jobs.

What You Can Do: From Opportunity to Awareness

The skilled trades gap is big enough that one company or even one industry can't fix the problem alone. It takes a concerted effort of people across all industries and locations to raise awareness of the issue and start to implement solutions.

Some things you may be able to do to help close the skilled trades gap include:

  • Join movements such as Generation T to raise awareness of the gap and the benefits of filling it. After all, these are great jobs that come with competitive compensation and benefits. Many people entering the skilled trades start out making much more annually than individuals with a four-year college degree.
  • Explore the trades as a career option if you're moving into the workforce for the first time, trying to decide whether college is right for you or simply want to make a major change in your career.
  • Encourage others, especially the young people in your life, to consider the value of the trades as a career choice. College isn't an automatic formula for success later in life and choosing to learn a skill or enter an apprenticeship can provide individuals with career longevity without the expense of a university.
  • Promote the trades if you're a business in any relevant industry. Consider reaching out to local schools to offer workshops or apprenticeships or join in on local efforts to get kids of all ages interested in these worthy and critical jobs.

It takes a village to close the skilled trades gap. And if we don't work together to do so in the future, the lack of skilled workers could mean the village itself is put in danger — or, at least, is forced to deal with frustrations and expenses that are avoidable.

Want to learn more about available jobs? Explore the trades at Generation T.

 

References

https://www.cnbc.com/2018/07/05/the-us-labor-shortage-is-reaching-a-critical-point.html

https://cerasis.com/skilled-trades/
https://www.globest.com/2019/02/22/severe-labor-shortage-continues-to-plague-construction-industry/?slreturn=20190526102810

https://www.foxbusiness.com/economy/construction-worker-shortage-tops-sector-concerns-in-2019

https://www.enr.com/articles/46197-recruiting-efforts-alone-wont-solve-the-skilled-trade-shortage

https://www.heraldtribune.com/news/20170529/construction-projects-are-delayed-and-cost-more-because-of-labor-shortage

https://www.apnews.com/193bfc65603047939ac2c80c779577a6/

https://www.businessinsider.com/amazon-prime-customers-complain-delays-2018-4

https://www.pmmag.com/articles/102068-solving-the-american-plumber-shortage