Skilled trades have become an excellent alternative to regular degree jobs. However, the skilled trades industry is proving to be one of the hardest hit by worker scarcity.
As labor markets strive to rebound from the impacts of the pandemic, a talent shortage of historical scale has catalyzed. 75% of companies have reported talent shortages and difficulty hiring – a 16-year high.
The skilled trade shortage is a major concern with employers struggling to recruit, train and retain qualified workers within several industries including manufacturing and construction.
A 2018 report found that skilled trade positions such as mechanics, electricians, welders, pipe fitters, and carpenters were found to be the hardest roles to fill globally and in the US for the 6th year in a row.
There are several factors that have contributed to this.
The Great Recession
The construction industry took a huge hit during the Great Recession. The number of construction firms fell by nearly 150,000 between 2007 and 2013 and over 2.3 million jobs were lost due to layoffs, early retirement, and workers leaving for greener pastures.
Of the jobs lost during this recession, only 600,000 have returned, according to Rob Dietz, Chief Economist and Senior Vice President for Economics and Housing Policy for the National Association of Home Builders.
As many as 32% of billion-dollar manufacturers estimate they’ll lose $100m+ over the next ~5 years as Baby Boomers put down their tools.
Aging Skilled Workers
Baby Boomers are saying goodbye to their jobs in construction, manufacturing and engineering, and younger generations are looking for work outside of those industries.
The median age of a construction worker right now is more than 40 years old. The long-term problem is identifying the next generation of construction workers.
By one estimate, for every skilled worker coming into the workforce, there are five who retire. Even new workers are aging, according to Bill Irwin, executive director of Carpenters International Training Fund, the average age of a carpentry apprentice is 27. The ideal age is 19.
Capitalizing on the skilled trade shortage
Whether you are in the market to buy a business or start your own, skilled trades may be a good place to look.
Pandemic Inspired niches
Even though lockdown restrictions have eased, many continue to work remotely and are using this time to make improvements to their homes. As a result, tradespeople across many industries have reported boosted revenues and high demand for their services.
Creating Office Spaces – Basement and loft conversions are becoming popular and are used to create new office and home working areas. Garden rooms, orangeries, and conservatories are also seeing a spike in popularity.
Outdoor Spaces – Landscapers, gardeners, and tree surgeons have experienced a surge in business. Property owners are building new patios, decking, and removing unwanted trees in order to improve their outdoor space.
Soundproofing – People are looking to soundproof offices for a quieter and less disruptive working from home environment. Those who are homeschooling children or have little ones around all day are looking to soundproof children’s areas.
Tech savvy tradespeople
In a recent survey, it was revealed that one in five tradespeople are concerned that the way they are currently working is outdated and 10 percent admitted that they barely use any technology as part of their daily work.
However, tradespeople who have been working in the industry for less than 2 years are reportedly more comfortable with using technology. This suggests that in years to come, they will be more likely to use tech solutions to solve some of their biggest challenges.
This creates opportunities for entrepreneurs to build products and services for tech-savvy tradespeople.
This group has expressed that time-saving and money making are their main motivation to adopt new tech. They reportedly use tech to:
- Browse merchant/manufacturers’ websites (66%)
- Purchase products (61%)
- Complete finances (40%)
- Find online training/webinars (34%)
Training Platforms
With an estimated 31m skilled trade positions that will be left vacant in the US by the end of this year thanks to Baby Boomer retirements, the opportunity is ripe to provide training platforms, materials, and content to help fill the gap stateside.
Mentor matching
There is also an opportunity to create an apprentice/mentor matching platform that helps aspiring tradespeople connect with established mentors in the industry. This could function as a standalone service or as part of a larger trade school training offering.
