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Are you aware of the skilled labor trends for 2022? 
Labor Shortages Baby Boomer Exodus Workplace Flexibility Replacement
Upcoming trends will impact the skilled trades Skilled labor shortage is affecting and will continue to affect many industries Businesses need to be aware of the “baby boomer exodus” Workplace flexibility is in high demand How “replacement” will affect your business
00:00-03:34 | What trends are the skilled labor industries facing today? 03:34–12:35 | Skilled labor shortage will continue and accelerate 12:35-17:47 | How can companies deal with the retiring baby boomers? 17:47– 23:23 | Start to think about workplace flexibility for your workers 23:23–32:21 | Replacement has become a huge factor in labor shortages 32:21–34:26 | Skilled workers are what keep America running
“If you’re a skilled worker, it’s the golden age for skilled labor.” – Brett Elliott ”It’s going to take a change in mindset to be able to address this labor shortage because it’s going to continue to put stress on your current workforce.” – Tim Raglin “So your 5 to 10 year strategic planning? That just got moved up to, you know, like today. You’ve got to take care of today.” – Tim Raglin “In our rush to try to acquire new talent, younger talent, and replacement talent, there’s a tendency to forget those guys that are out there doing it, and have been doing it for a long time.” – Tim Raglin “And so obviously, you have to start thinking differently as to how you’re going to attract the talent.” – Brett Elliott “Staying in the current paradigm that you are with your workforce is going to guarantee you that you’re going to struggle a lot more against your competitors that are more forward–leaning for the workforce. It’s just guaranteed. It’s supply and demand. And you’re going to have to rethink a lot of your strategy.” – Tim Raglin “Most economists that look into the workforce and labor trends have said that replacement will outpace growth and attrition as the drive for labor increases in the coming decade.” – Tim Raglin “People are leaving jobs at record numbers, partially because they can. Unfortunately, there’s not as much loyalty to stay in one location.” – Brett Elliott “Be aware that you’re continually recruiting your current staff and think: what do I need to do to recruit them to stay?” – Tim Raglin “The fact is, there’s more leaving than there is coming behind them, and you’d better be figuring out how you’re going to attract the ones you need.” – Brett Elliott
2022 Trends For Skilled Labor (Part 1) – Transcript
SPEAKERS
Brett Elliott, Tim Raglin
Tim Raglin 00:08
Well, hello, and welcome to the Skillwork Forum again. As always, my name is Tim, I’m joined with my partner here at Skillwork, Brett. And we appreciate your time joining us here today. As you know, here at the Skilledwork Forum, we talk about all kinds of issues, trends, impacts to industries and businesses surrounding the skilled trades. And today, we’re approaching, believe it or not, I can’t believe it’s already happened, the end of this year. 2021 it just went screaming by, but we always try to take a crystal ball look ahead at the coming year. So in today’s episode, we’re actually, I think we’re going to break it up into two, we’re going to, we’re going to talk about the things that we see some of the trends, some of the needle movers, if you will, for the businesses out there, and also for the men and women that are in the skilled trades, or use folks that are in the skilled trades to advance your business. So we will try our best to take a look at those things that are going to impact you from a business perspective. And we think probably the surest way to predict what’s going to happen, is to take a look what has happened, what’s currently happening, more specifically, kind of what things are beginning to emerge, what things are beginning to have an impact now that will persist into the coming year. So what are the things that impacted us in 2021, and the things that will impact you and us in the coming year? So we’ve identified what we think are eight factors, eight trends that we’re going to discuss over this two-part segment of the Skillwork Form, and I’m just going to summarize them here. That over the the next two episodes, we’ll get into more detail o,n but at a high level, we’re going to talk about, obviously, the skilled labor shortage. And really where we see that going. And spoiler alert, where you see that continuing, and probably getting more acute for you in the coming year. The second thing is this baby boomer exodus, which we believe is going to be both a brain and an experience drain to your company. So we see that continuing to be a significant trend. The third thing that we’ll talk about, is this growing demand of your workers for more flexibility in the workplace, and what effect is that going to have on your business. Fourth, this concept of replacement as a big driver in your labor strategy. And by replacement we’re talking about not just people that leave out of attrition, or but you have to hire because your business has grown, but this is a concept called replacement that we’ll talk about that’s going to impact more and more the skilled trades. We’ll be talking about automation of the workplace, that’s going to be a continuing trend, the impact to your business from that perspective. Rising costs and inflation fears, which we see definitely on the horizon. The impact of the labor market as a result of that. The supply chain backlog, that’s the seventh thing that we’ll talk about. The supply chain backlog and really this growing consumer demand and how that’s going to impact your business, it already is that will continue to do so in some interesting ways. And then finally, this infrastructure, we’ll call it an infrastructure bill that’s been passed and the impact that that could have, particularly in the construction sector. So with that, Brett, I said a lot to tee us up there, but the first one that we’re going to talk about over to you.
Brett Elliott 03:34
Alright, so well, like Tim said, you know, kind of a spoiler alert, but if you thought the labor shortages were, were all of a sudden in 2022 are all going to go away, I think I think you’re gonna have a bad year. So, so obviously, you know, it’s an obvious the labor shortage in total, you know, from the service industry to pretty much every business is is struggling in that area. And skilled trades, which is what we’re going to focus on as we always do, is is definitely, you know, going to going to continue to experience that same same issue. And so, you know, the, I think the, the demand, and the opportunity, that that’s creating, really for the skilled trades is is new skills. You know, a lot of what you’re going to, we’re going to talk about in this episode, and even some, in part two of this is is what those trends are and what kind of where the opportunities are. If you’re if you’re a business, you know, this is creating a lot of challenges as to how you’re going to address it. If you’re, if you’re a skilled worker, this is actually you know, we I don’t know that we coined the term, but it’s, you know, the kind of the golden age for the skilled labor. I mean, right now the demand is so strong for for skilled trades. I mean, just in probably, Tim, I would say, I think, a year and a half ago, across our system of what we see of technicians, and a lot of guys, maintenance technicians in the manufacturing space, and so forth and so on, you know, I think, probably 18 to 24 months ago, probably the average wage we saw was $24- $25 an hour? And, and this year, I mean, in a relatively short period of time, I just looked the other day, and our average across the system was was up to about $27 now, with, with even a higher increase in the higher jobs. We’re seeing a lot more automation technicians and PLC type type roles where you’re getting up up well into the $30 range. So we’ve definitely seen a seen a movement and a shift in better wages.
Tim Raglin 06:02
Yeah, for sure. And I think that trend is going to definitely continue. And it’s worth talking about this as well, it’s producing for you, you know, maybe the likes of we haven’t seen in quite a while a very, very competitive environment for those skilled workers. Snd it’s going to take a change in mindset to be able to address this labor shortage, because it’s going to, it’s going to continue to put stress on your current workforce. Because demand, as we talked about, is increasing. Yes, COVID demand is, you know, is is unprecedented. Yep. So, it’s gonna exacerbate that issue.
Brett Elliott 06:41
Well, there’s no doubt. I mean, you, you’re gonna have to, I mean, we’ve already had to do it, I mean, our whole business, you know, Skilwork exists, you know, because of the demand and needing to think outside of the box as to how you’re going to find the talent and get it there. I think that, that reality, for companies to really find the demand, I mean, you know, the number of companies that we work with, and the search for talent is just off the charts as far as trying to find not just not just individuals to put into spots, but really finding talent. And we’ll get more into it, you know, probably in the next episode, when we talk about the fourth industrial revolution, the expansion of automation, but also just the level of skill and what’s happening. You know, the other thing, Tim, that we’re seeing happen is, you know, the, you know, the, the 24-month, elephant in the room, you know, COVID, you know, has created a lot of dynamics, obviously, that’s not over, you know, we’re continuing to deal with that. We’ll probably talk a little bit, we’ll weave it in here a little bit. But obviously, you know, the the vaccine mandates and OSHA, which right now, as we’re filming this, you know, that’s been put on, on pause for the moment, but you know, that, that, that fight wherever, wherever you land on that is not over. And that’s going to have, we’d be remiss in saying that’s not going to have an impact in here, somewhere and how it affects your workforce. But the other thing that I think COVID has, has clearly done it is it has created a more moving workforce. You, people are for a variety of reasons, they’re either leaving certain parts of the country, and moving, and part of that is because a lot of a lot of people to now let’s let’s, let’s be, let’s just say that we’ve got a, we’ve got a maintenance individual, a guy or a gal, whatever the case may be, and their spouse is now able to work remote, which we’re seeing a lot. And so suddenly, hey, they can be they can move, they can go or they’re choosing to go, whatever the case. So that that mobility and freedom to move around is creating a unique dynamic.
Tim Raglin 09:04
Yeah, it is. And, you know, we’ll we’ll talk a little bit more about workplace flexibility. And that’s a big part of it. And just to kind of complete or add a little bit more to your thought about COVID. And, you know, we’re not going to get into, you know, the where you stand on that, I think that a prudent business will look to, you know, consider what are the potential outcomes of that. One of which is if that is, you know, corporately mandated that you’re going to pursue that, whether it gets made legal or not, that’s going to have an impact on your workforce. Because the bottom line is, certain workers will be okay with that, and certain workers will not, and that could, you know, further put additional stress and strain on your workforce that people choose to, you know, transition because of that and. And we’ll talk about that a little bit in this replacement. I think that could increase replacement demand as well. So a lot of things are going to they’re going to drive labor shortage. One of them is, it’s our next our next point that we’re talking about. It’s kind of related, but it’s, it’s, it was happening before the what’s the impacted us this last couple of years, and it’s going to continue, I think it’s been accelerated. This is what we call the baby boomer exodus. And it’s no surprise or secret that we have an aging workforce across all sectors. But it’s even more acute in those that rely on skilled trades. So it’s a brain drain, but really, for those of us that work in the skilled trades industry, more important that you can teach somebody, you know, send them to, you know, two years, 18 months, and they can learn, you know that what the book says about PLC, but the experience? To know how to apply that in a troubleshooting environment where you depend on somebody to know what to do when to do it? It’s that experience drain is going to be a significant factor, we think, in the next year and the coming year. So according to the Bureau of Labor Statistics, approximately 1/3 of all skilled workers are over the age of 50. And even, let’s take a look at a particular sector, we work in construction. Those who work in construction trades, and this particular statistic that was pulled out looked at construct construction and building inspectors. So let’s just take that job: the median age for that job is 53. And the median age for all other jobs is almost a decade, it’s 42. So they’re 10 years older in that trade. And I think that’s pretty accurate across a lot of construction, and even manufacturing. So you have that percentage of people on the upper end of that, that are close to and could be considering retirement. We know for certain that the COVID actually accelerated some of that, you know, people leaving early. Conversely, only 10% of this group that I just talked about, are under the age of 25. So you’ve got a large group that are older and a very small group that’s coming up to replace them. So that is a that is a significant issue in this baby, baby boomer. And speaking as two Baby Boomers. Right? Yeah, we get it right?
Brett Elliott 12:35
Yeah, you can’t retire. But that’s alright. But the, the, but no, it’s very true fact, you know, we talked about, I think we’ve talked about it in a previous in a previous episode, you know, we, we call it the COVID exit. And, and the COVID exit, you know, meaning people of the baby boomer age, and maybe we’re at the top end of that, you know, mid 60, you know, range who just said, you know, in the current environment, um, I think the industry, we as industry leaders thought that a lot of those individuals that were 64, 65, we could probably convince them to work till they were maybe 67, 68. We were trying to push that along, trying to, because we, everybody has seen this, this train coming at us for a while, and trying to figure out how to get ahead of it. And, and COVID, you know, the the people that decided, you know, it’s just not worth it for me to stay, I’m just gonna go ahead and retire, that definitely had an impact. And then we’re going to continue potentially, to see that. There was an article, I don’t remember exactly where we read it recently, not just in the skilled trades, but across all all, all workforce that over the next five years, 10,000 Baby Boomers a day will will leave the workforce. So because they’re reaching age, so that’s a significant impact. We’ll talk about a little bit more, you know, here when we get done in the replacements and other stats, that that really kind of drive home, the impact. You know, I’m in facilities all the time, you know, in my role here, I do a lot deal with a lot of the clients. And so it Tim, I don’t know, the last time I went to a client where this conversation about their aged maintenance staff and the reality of of them retiring and leaving and the challenge to find the talent behind it. I mean, it’s not like I’ve got to convince them. They are quite aware of the of the problem.
Tim Raglin 14:48
Yeah, I mean, some of the statistics are pretty staggering. And, you know, one that we that we picked up on is that, this is a projection, and you know it all also applies to our next our next trend that we see. But by 2030, by one projection, almost 80 million skilled tradesmen will have retired. And there’s only projected to be 40 million to replace them.
Brett Elliott 15:13
Yeah, that’s a scary number.
Tim Raglin 15:15
I mean, I’m from Arkansas,