The need for critical trades skills in the U.S. has never been greater. While we’re all aware of that, some of the figures I’ll present here have real implications on your project planning.
“U.S. manufacturing and construction face a hiring crunch for skilled workers such as carpenters, electricians, welders and plumbers,” said McKinsey & Company’s recent report, “Tradespeople Wanted: The need for critical trade skills in the U.S.”
Are you prepared to handle this hiring crunch? The bad news is it’s going to get worse.
One Worker for 44 Jobs
Let’s agree on the root cause of the skilled labor shortage. First, the U.S. population is aging, and folks are retiring. Second, too few younger people are entering the trades.
Today, most young people have their eyes set on college. A survey of 18- to 20-year-olds found that 74% perceive a stigma (that’s right, McKinsey used the word “stigma”) associated with vocational schooling versus a four-year university education. Nearly eight in 10 of 18- to 20-year-olds said their parents encouraged them to go to college after high school.
Culturally, there’s another factor at play. Today’s young people are not built to work in the trades, the McKinsey report suggested. Younger workers prioritize career advancement when taking a new job. To stay in the job, they want workplace flexibility. Employers today have to offer both advancement and job flexibility. Yet, “the on-site and highly structured nature of construction…typically doesn’t map to these preferences,” according to the report.
McKinsey ran the numbers using Bureau of Labor Statistics (BLS) Occupational Outlook Handbook data. By comparing the most recent BLS new skilled-role jobs between 2022 and 2032 with the average annual job openings over that period—the skilled workers available to fill jobs for the next 10 years—McKinsey identified only one qualified employee will be available for every 20 job openings.
And it’s worse for construction. The BLS data show construction laborers and helpers completing only 3,400 apprenticeship programs versus a projected 151,000 annual job openings. That’s one worker trained for every 44 construction jobs posted.
Here’s the data for carpenters: In 2022, 956,000 carpenters were employed. Each year, 80,000 job openings will become available in this trade, but only 7,400 individuals will annually complete their apprenticeships.
“Comparing job openings with training-program completions reveals trades with high churn rates,” the report said.
Transform Your Operating Model
Yes, you need to act, but how? First, get serious about partnering with others. “The organizations that have been most successful at securing required skills have shifted from reactive, siloed and inward-facing approaches toward more open and transparent forecasting, including the sharing of data with new partners,” the McKinsey report stated.
Second, consider upskilling talent and raising productivity as one and the same. You can take specific steps to reduce churn in the skilled trades and boost your crews’ productivity rates at the very same time, according to the report. “Productivity can rise when organizations transform their talent and operating model, invest in capital and technology and manage economic headwinds, such as inflation and interest rate pressures,” the report said.
The report gave the example of an engineering company that offered attractive sign-on bonuses and relocation packages. “It was able to secure scarce skilled workers…and keep the project on target for on-time completion.”
In other words, investing whatever it takes to land skilled, highly trained individuals leads to greater production output. Investing in talent enhances productivity. Investing in automation and other technologies serves as a draw for skilled talent.
I know many of you AWCI member contractors already think like this—you invest in people and in productivity processes. You’re ready to face the future of worsening worker shortages. How about the rest of you?
