How to Partner with Service Providers to Stem Skilled Labor Shortages

In this edition of "An Expert's P.O.V.", Flagship’s Mike Thompson, President/IFM discusses strategic ways that facility services providers can help facility managers (FMs) deal with the ongoing challenge of skilled labor shortages exacerbated by the COVID pandemic and its impact of the labor force, both short and long term. can take advantage of the reopening delay to improve the overall facility environment and the employee experience.

Setting the stage

Before the pandemic brought the economy to an abrupt halt in late Q1 or early Q2 2020, businesses from general contractors to specialty contractors, from property and facility management providers to manufacturers, already were feeling a shortage of skilled labor.

The shortage was not a new issue in early 2020, having begun in the late 1990s; it picked up speed during the Great Recession and then put the hammer down during the pandemic. How severe the shortage is depends on demand: right now, as demand returns to pre-pandemic levels, the shortage is acute as many skilled workers have decided to exit the workforce via retirement or career change.

It is clear that when and/or if the federal government enacts a large infrastructure program, that the shortage will gain further momentum. In the near term that shortage could be good for workers continuing to put pressure on companies to increase compensation and benefits. But in the longer term, skilled labor shortages may result in a slowing of the economy: unmet demand resulting in work going unperformed.

Paraphrasing David Byrne from Talking Heads, ‘How did we get here?’

Before a quick review of the last 30 years of skilled labor declines and the reasons behind them, for the purpose of this paper, we will consider the following roles as skilled labor:

• Electricians
• Plumbers
• Carpenters
• Machinists
• Steelworkers
• Welders
• Pipefitters

The progression away from the skilled labor jobs noted above has been steady, starting in the mid-1990s when companies started to sharply reduce their training budgets. In the mid-1990s, about 20% of a company’s employees received some kind of regular training and development. Today that number is closer to 1% (Conger Blog, March 2021).

Structured training programs evaporated. As companies chipped away at employee development, the Great Recession hit, blowing a hole through the skilled trades, with over 2 million jobs being lost, while recovering only about half that number. Here’s another thing: the average age of the skilled tradesperson is over 40 (Pogue, January 2017). I recall having a discussion with a colleague in Australia a few years ago about the challenges in finding skilled labor in the U.S. citing the “silver tsunami.” The wave continues to grow as Baby Boomers exit the workforce at a rate of 5,900 workers a day. While not all of those are skilled trade workers, it is clear that the pace of workers exiting skilled roles continues to quicken.

The Perfect Storm

Fewer training dollars, an aging workforce, economic conditions, and world events: all impact the skilled workforce needed to keep buildings running. Equally important is how skilled workers are viewed and how potential workers view those jobs.

The view has not been very good over the last three decades. Starting with the No Child Left Behind legislation in the early 2000s, the focus at high schools shifted to preparing students to pass rigorous standardized testing, most of which could be used to determine if a student would be eligible for college.

The focus shifted to “college is for everyone” dealing another blow to skilled workers (Pogue, 2017). High schools reduced trade-related classes like shop or automotive. As noted earlier, companies reduced training programs, and as they did, reduced apprenticeship programs too. The view of the skilled trades was that of a “fallback” for students who could not make it to college. This was a very different view from years earlier when trade workers were viewed as critical members of the overall workforce.

"The problem defined: tough demographics as skilled workers age out, a lack of trained workers to follow them, a dim view of the skilled trades themselves, government policy contributing to that view, and an increasing, unmet demand. " - Mike Thompson, VP/IFM for Flagship

Two Sides of the Coin

Companies that need skilled labor to deliver their core services (e.g. Facility Management companies) are in a unique position to address this, while companies for whom skilled trades are not core, may struggle. For companies in life sciences, transportation, manufacturers, etc., investment dollars will go to developing their core business: R&D, new products, new technologies, capital equipment, and training for those who deliver the core product. It is unlikely those companies will invest in developing skilled trades needed to keep the company’s buildings running.

But for companies providing Facility Management services, investing in recruiting, training and development, developing apprenticeship programs, and creating partnerships with community groups, high schools, trade schools, and veteran groups - these are all activities that contribute to their core business, and so get funding. Right now, apprenticeship positions are among the most difficult to fill (BusinessWire, March 2021): Facility Management companies can quickly develop those programs and start to gradually address the shortfall in skilled trades workers.

Partner with your Facility Services Provider

If you are a company for whom skilled trades are not core, you can address your labor shortfall by partnering with qualified Facility Management providers. They can provide a wide range of skilled labor (and lower levels too) because those companies developed the recruiting and training infrastructure to collapse the hiring time.

Their scope can range from project-based work to very specific out-tasked functions (like electrical work, carpentry, HVAC work, plumbers, and building engineering), to more integrated Facility Management work where managers and skilled trades workers combine to provide all of the services needed to run buildings day-to-day.

Government policy on everything from education to infrastructure, to immigration, will impact the number of skilled workers. Companies using innovative approaches to attract and develop workers who can grow into skilled roles will help alleviate the shortfall. Investments in recruiting, training, and apprenticeships will further grow the number of skilled workers.

The best-performing FM providers have made these investments and are starting to address the skilled labor shortage. For immediate needs, companies can look to Facility Management providers to deliver skilled workers to help them deal with the skilled labor shortage.

Sources:

• Paul F.P Pogue, Bridging America’s Gap, January 16, 2017
• Business Wire, US Skilled Trades Labor Shortage Heightens as In-Demand Jobs Remain Unfilled the Longest, March 18, 2021
• Sarah Chamberlain, Addressing the Skilled Labor Shortage in America, Forbes August 21, 2019
• Conger blog, The Skilled Labor Shortage: Causes, Costs & Covid-19, March 17, 2021