The Great Candidate Shortage

August 3, 2021

 

The Skillwork Forum
The Great Candidate Shortage
Episode 34

“Where are all the skilled workers?” We hear this often—they’re hard to find these days.

The pandemic shined light on worker shortages across all sectors. While the hospitality and light manufacturing industries were hit the hardest, we expect to see a quick recovery as things continue to open back up.

The trades face a different problem: there was already a shortage of over a million workers going into 2020. Pandemic closures and economic impacts only made it worse—and unlike other industries, recovery won’t be so quick.

If you’re a business who’s having significant troubles finding skilled tradesmen, don’t lose hope: you can still find skilled workers. 

Main Takeaways:

🛠 The skilled trade shortage was around before COVID and will continue after
🛠 COVID didn’t create a bigger skilled worker shortage…only accelerated it
🛠 Many people haven’t yet returned to work for a variety of reasons
🛠 Baby boomers are retiring early which only makes the shortage more acute
🛠 Possible solution: partner with a travel staffing company to find workers 

Timecodes:

0:00-4:02 | An extreme labor shortage that we’ve never seen before
4:03-10:37 | How COVID plays into the shortage…and how it doesn’t
10:38-15:10 | COVID going away will not solve the skilled trade challenges
15:11-17:54 | Retiring baby boomers are taking their expertise with them
17:55-22:06 | Fourth Industrial Revolution changing skills required for workers
22:07-25:26 | The trade gap is our generation’s great challenge
25:27-27:33 | Have a plan to solve your staffing problems?

Quotes:

💬 “In conversations with many of our clients…the shortage is the worst they’ve seen in their careers.” Tim Raglin
💬 “There are some things that were existing prior to COVID. It’s not all COVID. And it’s not all going to go away as we rebound from COVID.” Tim Raglin
💬 “At least half the states are now ending [extended unemployment] benefits, which whether you agree with it or not, is going to require people to go back out into the workforce.” Brett Elliott
💬 “You can’t keep the businesses running if you don’t have the individuals” Brett Elliott
💬 “God created us to work, and I think we feel better about ourselves when we’re working, as long as it’s safe to do so.” Brett Elliott
💬 “There is a huge pool of available workers out there, we just need to continue to look for opportunities to get them back in the workforce.” Tim Raglin
💬 “It’s well-documented that prior to 2020, the shortage was over a million workers.” Brett Elliott
💬 “Math is math, and the math shows that the number of baby boomers that are going to leave the workforce over the next five years is more than the people coming behind it.” Brett Elliott
💬 “Some of the more experienced baby boomers are reluctant to go get that advanced education and training.” Tim Raglin
💬 “It looks like there is more focus and emphasis on pursuing skilled trades as a career path for the next generation.” Tim Raglin
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TSWF Ep.34 | The Great Candidate Shortage – Transcript

SPEAKERS

Tim, Brett

Brett  00:00

Our encouragement would be: continue to invest in the trades, continue to invest in training, different internships and all the different things, as well as finding a company like ours who focuses in this space, you know, to help you help you solve the gap.

Tim  00:26

Welcome, again to The Skillwork Forum. I’m Tim, I’m joined here with my partner, Brett, from Skillwork. And, and this podcast, remember, we just gather to talk about industry trends, topics, emerging issues, everything really surrounding the skilled trades. And to that point, today, we’re going to be addressing a topic that we hear probably more frequently than any other, and that is simply “Where are the skilled laborers? Where are the people that we need to be able to fill our need, to grow our business, to keep our production lines going?” And like everything else that we’ve gone through over the last 18 months or so, COVID had a big impact, it impacted the labor market probably like nothing we’ve ever seen in our lifetime. Probably not since World War II, have we seen something that impacted the labor market, to this degree, and specifically the skilled labor market, it impacted it for a variety of reasons. Matter of fact, there was an article we subscribe to and we read a lot of articles and research from the staffing industry. At Staffing Industry Analysis, SIA, is an organization focused on the staffing industry. And there was an article recently that was written by Timothy Landis. And in the article and Timothy, we want to thank you for putting that together very concise, and well put together, and in that, he talked about in this report that for the light industrial and especially hospitality sectors of the labor market, the shortage we’re experiencing right now has never been seen before. I think he called it extreme. And we would agree, Brett, in conversations with many of our clients, more in the manufacturing, maybe the heavy industrial and construction, that it’s the worst they’ve ever seen in their careers. 

Brett  02:27

Yeah, no doubt. So you know, I, we talk about it, you know, I spent 30 plus years in the manufacturing space. So I have a lot of relationships with either individuals that are running facilities or and then obviously, in our business today, we talk to a lot of those facilities. And so, you know, I know one example, you know, recent, so we’re working with a client of ours, and they’re actually consolidating two, three facilities into one. And so, so they, they’re closing to two facilities, and they’re going to move all that production into another facility. And we’re in there helping them with some staffing for their skilled trade folks, during this process. And now, I don’t know how many times it’s been, but they’ve had to extend the closures of those plants. And they finally found out recently, the really the reason is the new facility, they built on a whole new area, they can’t get it staffed, that the reason they have to they’re continuing to have to keep these other- because obviously, when they planned this out, they didn’t know this was going to happen. Right? And, and you’ve already got this extreme issue of finding the light industrial production operators, that type of work. And so literally, they’ve had to do multiple extensions of keeping these other plants, simply because they’re just in a space that we just, we can’t get it staffed to run it.

Tim  04:03

Yeah. I mean, some of these things we’re going to talk about, why can’t they find the staff are fairly well known. But it’s worth us restating some of these because I think there’s some optimism as well, that we need to share as a matter of fact, and the article that Mr. Landhis wrote, and that we referenced earlier, he gives some reasons for the labor shortage overall, some of which extend into the manufacturing/construction sector, as well as some reasons for optimism. We’re going to hit on a few of those. But then I think we’re going to pivot to in our sector, there’s some things that were existing prior to COVID. It’s not all COVID. And it’s not going to go away as we rebound from COVID. So we want to make sure we differentiate a little bit from some of the points that were made in the article, but to reference those things that he spoke about, he said, Listen, here’s some of the reasons for the shortage. The first you know, 800 pound gorilla in the room is concerned about health and safety of the employees. And that’s kept a lot of people away from the workforce, there still continue to be fears out there. And even in some companies, from the hiring side, fears over liability. They’re just not certain. So there’s a lot of pent up labor market that is not either not willing to come back or not able to come back because of fear over health and safety. But the optimistic side of that, and there’s some optimism that’s coming with that as well.

Brett  05:34

While you’re starting to, I think, you know, in the article that we’re referring to, and as Tim said, it was really more specifically dealing with light industrial and hospitality, which is clearly the sectors that have seen the largest impact from COVID. We don’t work in that space, we don’t solve solutions to that space, we solve solutions in the skilled trade space. So we’re going to kind of layer those two and say, you know, this is what we saw, we have people ask us all the time, you know, my wife asked me, you know, quite often about, you know, these, these three different things that we’re going to hit on here in a minute, health and safety being the first one. People ask you about, well, how is that impacting what what we do in the skilled trade space? And so I think what we want to try to do today is try and say it does have some impact or but it doesn’t have near the impact that it has having in these. And I think what we’ll tie together today to would be to say there, I think there’s there’s very logical optimism, that why you should believe that the light industrial and hospitality, saying that those are are going to start see pretty fast improvement. I’m not as convinced, as we’ll talk about, that we’re going to see it in our sector. And we’re going to we’re going to talk about that, but health and safety one. And the obvious reason why there should be optimism in that is, as we’re now you know, the the number of COVID cases nationwide, are now consistently month over month, are hitting the lowest level since the pandemic began. So just the fact that, you know, you’ve got less than last And clearly, you know, you know, sadly, for those who lost their life, you know, due to COVID. In this time, we’re seeing less and less of that as well. So just the general confidence to go back into the into the workforce, is, is happening.

Tim  07:44

Restaurants, hotels, you travel around, you see that more and more people are coming back. But there is a lag to get those folks come back from work. And I think a bigger impact. The next one we’re talking about is the reason for the shortage and reason for optimism that does touch on our sector a little bit more directly is that the forced closures that took place during COVID, particularly in schools and daycares because, you know, many of our skill workers, you know, they’re family, and both husband and wife work. And they have kids. So schools close, daycares close, one or both of the parents has to make accommodations for that. So that is a definite impact. And that continues to be an impact, although more and more states are opening up. More and more our schools are opening up, although we’re in summertime right now, daycares are opening up, so that’s getting better. So there’s reason for optimism there. It was a real thing, that that many could not go to work simply because they had to be there for their kids. You know, it’s a choice that had to be made. And I certainly respect that. But that is getting better simply because more and more of that is opening up. So impact, yes. Optimism also yes.

Brett  08:58

And then the other reason you hear it talked a lot about and and you know, we always choose to, to stay out of the political forum on this podcast, you know, so this isn’t a political thing. But obviously, the federal unemployment benefits, and the extension of those and the the additional, you know, a lot of people talk about it, the extra $300 that incentivized individuals, that was all put in place, you know, because of one and two, the health and safety of individuals who couldn’t go to work, the the forced closures of restaurants, and then and then the issues of schools and daycares. All of that led to the need for for federal benefits to help families through this unprecedented time. Some people would argue that maybe it It lasted too long. Obviously if you were on those benefits and you didn’t have your job back. Yeah, you probably didn’t think it was too long. And so but but that is the reality of that is is because now, you do have all of this reopening the, at least half of the states have now are ending those those benefits, which is, is whether you agree with it or not, it’s it is going to require people to go back out into the workforce, which has to happen. I mean, we you you can’t keep the businesses running, if you don’t have the individuals. And I think it’s better, you know, God created us to, to work and I think we feel better about ourselves when we’re working, as long as it’s safe to do so. 

Tim  09:03

Yeah, I mean, the the numbers coming back into the workforce are strong, and in a vacuum, they look optimistic, but the numbers that are still unemployed, and that are, you know, available to come back to work. I mean, there is a huge pool of available workers that are out there, we just need to continue to look for opportunities to bring them back in the workforce. 

Tim  10:38

So COVID clearly had a big impact on all of this, Brett, but for sure, but we want to make sure that we pivot a little bit and talk about our focus area, which are skilled craftsmen that tend to work in more heavy manufacturing, construction, specialty services. And we were talking about before we went on the air here that a lot of those guys continued to work right through COVID. As a matter of fact, a lot of them worked more. And there was definitely a drop off in available skilled tradesmen. But there were some things that existed prior to 2020 when COVID hit, that didn’t go away because of COVID. And the problems that existed then still are going to, we’re going to be dealing with post COVID. 

Brett  11:57

No doubt, I think a bit of our message, while there should be, and I would agree there should be optimism, obviously, we’re seeing it in the unemployment numbers, you know, the numbers are coming down, you know, people are going back to work. But for our clients, right now, we’ve probably in the last three or four months, we’ve probably seen the largest surge in clients coming to us looking for help in the skilled trades, as we’ve as we’ve ever seen. And so, so if you’re not a client of ours, and you’re thinking you’re looking at all this, and you’re reading this information, and you’re saying, Oh go they’re going to get rid of those, I’m going to get me I’m going to get people back, I would say that’s a that’s a false optimism for the skilled trade space. And and because, as we’ll unpack this, this, if anything, we would propose and I think the facts back it up, that COVID actually exasperated the skilled trade issue that was already there prior to COVID. And and those individuals, Tim, to your point, yeah, some of them, some of them were not able, you know, to be in the in the in the workplace at this time. You know, some of them had to deal with different things, it definitely had some impact. But overall, I think what what kind of kind of talked about that, that COVID going away is not going to solve every skilled trade issue. It might in fact, it might have made it worse. So to kind of set that, you know, thought a little bit. I think we’ve talked about this in in many podcasts prior, but I think it’s important for us to kind of kind of back up and say, you know, what was the skilled trade shortage situation prior to 2020? Well, it’s well documented that prior to 2020, the shortage was over a million workers, there was over a million skilled trade individuals needed in construction, manufacturing in the different sectors, auto mechanic, you name it, that just weren’t there and had nothing to do with a pandemic. And so, so. 

Brett  14:15

And prior to COVID, and the impacts of it, it was also well documented and well studied. And we’ll talk about it here in a second kind of a little bit of the why, but by 2025, nothing to do with COVID, they expected that number to grow to 2 million. Yeah. And so we talked a little bit, Tim about kind of why is that, what why do we have this skilled trade shortage, you know, nothing to do with COVID?

Tim  14:47

Yeah, I think that’s a really good point. Because, as you mentioned, definitely made things more challenging, COVID, no doubt about it for everybody in all areas of life. We could go on and on but it’s important to To recognize that while there’s like you mentioned hope or optimism, and we’re seeing it, this challenge of skilled tradesmen is going to be there and we think it’s actually going to be accelerated. 

Tim  15:11

So some of these things we’re talking about, were like the aging workforce, the the amount of guys that really know how to use their hands and their tools to be able to troubleshoot, solve defects to repair to bring things online, that’s an aging population. We’ve talked about and well documented in previous podcasts that we are not emphasizing skilled trades to our younger generation, everything just being pushed towards higher education. We’ve talked in all talks on ad nauseum about, you know, the amount of young people that are going into a four and five and six year, college degrees and everything that goes along with that, in other industries, and they’re not going to the skilled trade. So you have an aging population, you’re not replacing it with a newer population, although we are beginning to see some of that shift, thank goodness. So simple math that over the next five years as more baby boomers are retiring, and some of the things we talked about where there were forced closures of plants, or furloughs, during COVID, some of those guys just decided, Hey, I’m not coming back, I’m planning, I plan to retire in three to five years, I’m just doing it now. So they’re not coming back. And these are the guys that companies really depended on. So it’s crucial to see that those factors that we talked about prior to COVID are still there. And they’re not going to get better overnight.

Brett  16:42

Now that the the reason why all of the projections showed that we were going to go from a million short to 2 million short, even though we’ve been emphasizing for several years now, the trade schools and, hey, not everybody needs a four-year education. Still, that trend was still going to go there. And the big driver of that was, as Tim knows, I’m a numbers guy. And so you know, I like to make the statement, you know, that, you know, numbers don’t lie, you know, people do. But, but you know, math is math, and, and the math shows that the number of baby boomers that are going to leave the workforce over the next five years is more than the people coming behind it. And and so that’s why you are going to see that climb. Tim and I would propose, and not just propose we’re seeing it is that COVID accelerated that issue. Because some of those people that would have waited, opted to go ahead and and just just out of health or just say, you know, I’ve been home for six months, I’m just not coming back. Oh, yeah. 

Brett  17:55

And so the other big one, you know, that has, that is driving this shortage and making it a real challenge. And that is the the you know, we did a podcast a while back, I don’t remember what number it was, on the Fourth Industrial Revolution. And basically that is just the movement towards more automation, and more sophisticated technology in the facilities. You know, I use the example, it helps me and I have an example of, if you think about it, it hasn’t been that long. Today, we all walk around, or most of us walk around with basically a smartphone, which is in essence, a computer in our pocket. And, and we we do everything from communication, to travel, to banking, it all happens on this, this phone and it hasn’t been while it seems like it’s been around forever. Reality is, it hasn’t been around for very long. And and so I use that example to say so think about that. Think about how fast that technology has changed our lives. Right? And, and apply that to the manufacturing and the construction space. And recognize that same technology or types of technology, advancement in technology is starting to happen. It’s already happening in these facilities. We have some facilities now that are extremely highly automated, very technical, you know, what they call smart systems and so forth with equipment talks to each other and, and so forth. That that skilled trade individual is a different person than, you know, I always used to say that, I love the guy that could change the oil in his truck, and he used to come in and work for me in the plant as well. Unless he go gets some more education and some certifications, he’s not going to be able to work on this high-tech equipment. So that, you got this older population leaving with the experience, you got a shortage coming behind them, and now you’re elevating the need for the technology. It’s just, it’s a, it’s, it’s a problem that continues to roll.

Tim  20:28

Yeah, so it’s this, you know, increasing demand for workers that have a much different skill set. And those are hard to come by. So this is going to drive the challenge that we talked about where it’s going to be continued to be, well, a huge challenge for companies to be able to find this skilled craftsmen, skilled tradesmen they need. And and you mentioned some of the more experienced baby boomers, guys from our generation, a lot of times, they’re reluctant to go get that advanced education and training. So we want to encourage you don’t, you can teach an old dog new tricks. But all these things are combining to create even a larger shortage, that you’re going to be facing, nothing to do with COVID. At all. As a matter of fact, I think it probably accelerated technology. Because there’s more every time there is a huge challenge to our country, we respond with new invention, new technology, and we’re seeing that. So that’s going to drive this even faster, I believe. So that kind of gives us a little background on what got us here and the continued evolution of the shortage we’re facing right now. And we all often say here, that did not happen overnight, although it’s it’s happening at a increasingly rapid pace. And it’s not going to get fixed overnight. Whereas light industrial and hospitality may come back quicker post COVID, this problem, we feel like, it’s going to take a little bit more time and effort. And it’s what we think about every day all day.

Brett  22:07

Yeah, no, I think that’s right. I think, you know, I think while we wanted to, because the contacts, there’s a lot, a lot of talk about, you know, post COVID, and the workforce, and the work shortage, and so forth. And I just think we found it, it would it was good to spend a little time creating some distinction, you know, if you’re, if you’re a client, or if you’re a company out there, and obviously you I you know, you need to have optimism that you gonna be able I mean, I’ve talked to some, some some some folks in in in the plants, and they’re literally I mean, they just don’t know what to do. I mean, they they cannot find people. And so they are they are hoping and pray that that some of the things that the the article we referred to earlier was talking about, states opening up, and daycares opening up, and less cases, and all these things, benefits going away that that’s going to drive that. I think our our challenge is, I think it’s it’s a false sense of optimism, to think that that the skilled trade issue that was already a growing problem prior to COVID, that somehow coming out of COVID, it suddenly got better. Matter of fact, as Tim has said, we would we would suggest it probably accelerated it. So because there was things that that COVID did impact short and long term that probably in the end created. I don’t think that the the the idea of going from a million to 2 million necessarily, I don’t think it caused necessarily the 2 million to become two and a half million. It just got us there faster.

Tim  23:54

Yeah, instead of a five year timeline, it may be three or something like that. So, you know, we definitely agree with Mr. Landhis. Timothy, that yeah, there’s a lot of optimism and we think it’s going to help a lot across all areas, but also just a little bit of, you know, balancing that with the reality of of this particular space that we focus on, which are skilled craftsmen. So it’s really important to recognize that, and while we do see a lot of optimism as well, with respect to, it does look across the spectrum that there is more focus and emphasis and culture getting behind pursuing skilled trades as a career path for, you know, the next generation. It’s a great opportunity, if you’re a skilled trades person are interested in this and you’re looking into this podcast, great opportunity for you to travel, to explore, to make a great living, so and leverage your interest in high technology. And so there’s a lot of opportunity for you, and where we are optimistic about the future, but we also recognize there’s going to be challenges ahead. So, bottom line, I think, to wrap up our discussion here that we are coming out of one of the things COVID that one of the biggest impacts to the workforce, not just in our life, but in probably in history, this will be looked at. But certainly our generation, this is our generational challenge. It really is in a lot of ways.

Brett  25:27

I know for sure, I think it’s, it’s, it’s true. And, you know, I don’t want to, we don’t want to come across as as, as sounding skeptical or negative, about the optimism of of coming out of the COVID. And the other, I think it’s more the reality that that you needed a plan of how you were going to solve your skilled trade, talent shortage, prior to COVID, you’re still going to need that plan. And maybe even a little more so. So our encouragement would be: continue to invest in the trades, continue to invest in, in and in training, in different internships and all the different things as well as, you know, finding a company like ours, who focuses in this space, you know, to help you help you solve the gap of finding the skilled trades.

Tim  26:26

Yeah. So, again, as Brett mentioned, Skillwork. This is what we do, what we focus on every day, all day. So if you’re finding yourself as maybe an organization, that’s having a tough time, finding the skilled craftsmen, the tradesmen that you need to be able to grow, to build to to answer the demand of customers, reach out to us. We’d love to see if we can help you be your partner. If you are a skilled craftsman, and you’re looking for a new opportunity to take advantage of some of the things that we spoke about. Again, reach out to us at skillwork.com, we’d love to talk to you about the opportunity we have for you, and let you take advantage of the exciting new future that we’re we’re looking at here over the next decade or so. So until next time, we again, thank you very much for your time and attention to The Skillwork Forum. Have a great day.

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