Smart Business: Skilled Labor Still in Short Supply
Why is it so hard for supply to keep up with even
diminished demand?
Some things are so counterintuitive, it’s a struggle to explain them. For instance, we’re now three years into the Great Recession, in which an estimated 8 million people have lost their jobs and countless millions more are working part-time or underemployed. Yet at the same time, reports keep popping up of labor shortages in construction and manufacturing.
About a year ago, Industrial Info Resources (IIR) cited 688 renewable energy projects scheduled to begin construction in 2010 year across North America. Some of those projects were delayed or cancelled for various reasons – financing chief among them -- but others were held up due to a shortage of skilled craft labor in some areas.
The media has been filled with reports recently about a coming revival of nuclear power projects in the United States. Some 17 companies and consortia are considering building more than 30 nuclear plants, and the U.S. Nuclear Regulatory Commission is actively reviewing 13 license applications for 22 nukes. If those projects ever get off the drawing board, it’s doubtful there will be enough skilled labor to pull them off in reasonable time. Fluor is one of the contractors expected to build some of those new nukes. IIR cited a Fluor procurement manager saying, “There’s not enough skilled labor in the market to build more than a few reactors at the same time. When we have four active [nuclear] projects under way at the same time, things will be interesting. I expect that labor costs will go up, perhaps sharply, around 2014.”
The temporary staffing agency Manpower Inc. for the last five years has conducted an annual survey of tens of thousands of employers in 33 nations to determine the extent to which talent shortages are impacting today’s labor markets. Their latest effort in early 2010 found 31 percent of employers worldwide reporting difficulty filling key positions within their organization. The Skilled Trades category has topped the list each year of the survey.
Also, the National Association of Manufacturers (NAM) has been beating the drum for years about a shortage of skilled factory workers. Among NAM’s membership, their average age is around 50, and 90 percent of NAM members say they can’t find enough skilled production workers.
This comes as a stunning revelation to people who read almost every day about factories laying off hundreds or thousands of people. How can manufacturers be shedding jobs all over the map, yet suffer a labor shortage?
Upon further reflection, the discrepancy is not so mysterious. This is skilled labor we’re talking about. Many of the jobs that still exist in manufacturing are far removed from the assembly line tasks of the past that could be learned in a day. Many of today’s production workers have to know how to operate sophisticated computerized machinery, and it takes highly trained technicians to maintain and troubleshoot that equipment.
Likewise, it takes years to fully train skilled construction craft workers. The best craft training traditionally has come out of the construction unions, but the unions are starkly diminished in numbers from what they used to be, and they are careful to calibrate their apprentices with the amount of work available. It wouldn’t make sense for them to train more journeymen than their contractors can employ, so in a dismal economy like this, apprenticeship ranks diminish. Nonunion and company apprenticeship programs have even less incentive to expand enrollment in a down economy. Some short-shrift the process, and end up producing task workers rather than full-fledged journeymen.
Anecdotally, I keep hearing of construction apprenticeship programs attracting older and college-educated people. This is because we’re in an era when many white collar workers have been laid off from well-paying jobs, and the trades give them the best chance of recapturing their former earning power. But again, while this may boost the caliber of apprentices, until the economy improves, the number people being trained is likely to be far less than the industry needs to sustain another boom. When the market finally does recover, the construction skilled labor shortage is likely to get worse before it gets better.
The Fabricators and Manufacturers Association, along with its colorfully named Nuts, Bolts & Thingamajigs Foundation (NBTF), places some of the blame for skilled labor shortages on a society detached from its blue-collar roots. A recent poll sponsored by NBTF showed a majority of teens – 52 percent – have little or no interest in a manufacturing career, and another 21 percent are ambivalent. When asked why, a whopping 61 percent said they seek a professional career, far surpassing other issues such as pay (17%), career growth (15%) and physical work (14%).
A major reason that kids don’t pursue careers in the skilled trades is the simple fact they are not introduced to them anymore. In the past, high school students could take a shop class and get a feel for working with tools, but today most don’t have that chance.
Also, the old stereotypes of backbreaking labor and grimy working conditions in factories persist, even though most factories today are far cleaner, safer and more automated than in the bad old days.
The same NBTF poll revealed that America has become a nation of “non-tinkerers,” with 60 percent of adults avoiding major household repairs. And, 57 percent state they have average or below average skills at fixing things around the house.
This means young people essentially have no role models when it comes to repairing things themselves or taking pride in building something useful. Also, computer games have replaced Tinkertoys and erector sets as their favorite things to find under the Christmas tree.
All of these factors make it a daunting task for manufacturing and trade recruiters to replenish ranks and staff up for better times to come. But they can’t give up. There may be only one thing in their favor, but it’s a big thing.
That’s the fact that the trades are indispensable to our society, and offer jobs with great pay and benefits (usually). While job opportunities always fluctuate wildly depending on the state of the economy, they never will dry up completely, nor can they be outsourced overseas.
That’s your story. Stick to it, and shout it from the rooftops.
ND
Some things are so counterintuitive, it’s a struggle to explain them. For instance, we’re now three years into the Great Recession, in which an estimated 8 million people have lost their jobs and countless millions more are working part-time or underemployed. Yet at the same time, reports keep popping up of labor shortages in construction and manufacturing.
About a year ago, Industrial Info Resources (IIR) cited 688 renewable energy projects scheduled to begin construction in 2010 year across North America. Some of those projects were delayed or cancelled for various reasons – financing chief among them -- but others were held up due to a shortage of skilled craft labor in some areas.
The media has been filled with reports recently about a coming revival of nuclear power projects in the United States. Some 17 companies and consortia are considering building more than 30 nuclear plants, and the U.S. Nuclear Regulatory Commission is actively reviewing 13 license applications for 22 nukes. If those projects ever get off the drawing board, it’s doubtful there will be enough skilled labor to pull them off in reasonable time. Fluor is one of the contractors expected to build some of those new nukes. IIR cited a Fluor procurement manager saying, “There’s not enough skilled labor in the market to build more than a few reactors at the same time. When we have four active [nuclear] projects under way at the same time, things will be interesting. I expect that labor costs will go up, perhaps sharply, around 2014.”
The temporary staffing agency Manpower Inc. for the last five years has conducted an annual survey of tens of thousands of employers in 33 nations to determine the extent to which talent shortages are impacting today’s labor markets. Their latest effort in early 2010 found 31 percent of employers worldwide reporting difficulty filling key positions within their organization. The Skilled Trades category has topped the list each year of the survey.
Also, the National Association of Manufacturers (NAM) has been beating the drum for years about a shortage of skilled factory workers. Among NAM’s membership, their average age is around 50, and 90 percent of NAM members say they can’t find enough skilled production workers.
This comes as a stunning revelation to people who read almost every day about factories laying off hundreds or thousands of people. How can manufacturers be shedding jobs all over the map, yet suffer a labor shortage?
Upon further reflection, the discrepancy is not so mysterious. This is skilled labor we’re talking about. Many of the jobs that still exist in manufacturing are far removed from the assembly line tasks of the past that could be learned in a day. Many of today’s production workers have to know how to operate sophisticated computerized machinery, and it takes highly trained technicians to maintain and troubleshoot that equipment.
Likewise, it takes years to fully train skilled construction craft workers. The best craft training traditionally has come out of the construction unions, but the unions are starkly diminished in numbers from what they used to be, and they are careful to calibrate their apprentices with the amount of work available. It wouldn’t make sense for them to train more journeymen than their contractors can employ, so in a dismal economy like this, apprenticeship ranks diminish. Nonunion and company apprenticeship programs have even less incentive to expand enrollment in a down economy. Some short-shrift the process, and end up producing task workers rather than full-fledged journeymen.
Anecdotally, I keep hearing of construction apprenticeship programs attracting older and college-educated people. This is because we’re in an era when many white collar workers have been laid off from well-paying jobs, and the trades give them the best chance of recapturing their former earning power. But again, while this may boost the caliber of apprentices, until the economy improves, the number people being trained is likely to be far less than the industry needs to sustain another boom. When the market finally does recover, the construction skilled labor shortage is likely to get worse before it gets better.
The Fabricators and Manufacturers Association, along with its colorfully named Nuts, Bolts & Thingamajigs Foundation (NBTF), places some of the blame for skilled labor shortages on a society detached from its blue-collar roots. A recent poll sponsored by NBTF showed a majority of teens – 52 percent – have little or no interest in a manufacturing career, and another 21 percent are ambivalent. When asked why, a whopping 61 percent said they seek a professional career, far surpassing other issues such as pay (17%), career growth (15%) and physical work (14%).
A major reason that kids don’t pursue careers in the skilled trades is the simple fact they are not introduced to them anymore. In the past, high school students could take a shop class and get a feel for working with tools, but today most don’t have that chance.
Also, the old stereotypes of backbreaking labor and grimy working conditions in factories persist, even though most factories today are far cleaner, safer and more automated than in the bad old days.
The same NBTF poll revealed that America has become a nation of “non-tinkerers,” with 60 percent of adults avoiding major household repairs. And, 57 percent state they have average or below average skills at fixing things around the house.
This means young people essentially have no role models when it comes to repairing things themselves or taking pride in building something useful. Also, computer games have replaced Tinkertoys and erector sets as their favorite things to find under the Christmas tree.
All of these factors make it a daunting task for manufacturing and trade recruiters to replenish ranks and staff up for better times to come. But they can’t give up. There may be only one thing in their favor, but it’s a big thing.
That’s the fact that the trades are indispensable to our society, and offer jobs with great pay and benefits (usually). While job opportunities always fluctuate wildly depending on the state of the economy, they never will dry up completely, nor can they be outsourced overseas.
That’s your story. Stick to it, and shout it from the rooftops.
ND
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