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Top 4 Reasons Why Employers Can’t Find Skilled Workers (2019)

The harsh reality? The US economy doesn’t have enough workers, period.

A recent 2019 study found that 35% of small business owners couldn't fill job openings - and 88% said they couldn’t find qualified applicants for their open positions.

You can point to a booming economy for starters...

For several years the US job market has been on the rise, with companies struggling to deal with labor shortage.

Here’s the thing - skilled workers are in high demand across several industries - with 31% of all companies needing workers, and 14% of them using temporary labor.

 

But what is skilled labor, exactly? Skilled vs. Unskilled

Unskilled labor is when a worker has not received education above the high school level and has not increased their skill level with other certifications or licenses.

On the other hand, skilled labor requires additional skills and/or education - with this applicant pool getting additional credentials that help them command a higher average hourly wage.

In fact, skilled trades in the construction industry is among the fastest growing in the US - projected to grow 1.1% by 2028.

Examples of skilled workers include electricians, conveyor installers, welders, HVAC technicians, plumbers, millwrights and project managers - but can also include law enforcement officers, human resources personnel and computer operators.

To put it plainly, as of 2019 the US economy had 7.6 million unfilled jobs and only 6 million people looking for work.

Get Qualified Skilled Tradesmen Sent to Your Project Anywhere in the US

But why is finding workers becoming more difficult?

Here are the 4 reasons why employers can’t find the skilled workers they need:

 

1. $1.5 Trillion for Construction Spending

The Trump Administration has called for at least $1.5 trillion on new construction to infrastructure alone.

This includes revamping American roads, bridges, railways and ports.

Trump himself has dubbed this “the biggest and boldest infrastructure investment in American history.”

To top it off, they’ve done what they can to cut the red tape.

Removing barriers to break ground, combined with a rise in government spending and public-private partnerships, will be all the market needs to increase skilled worker shortages.

This kind of demand has helped to create a shortage in the supply of workers.

If this continues, it will be a long time before the economy can fill these roles - a great thing for skilled workers.

 

2. Government Regulations on Immigration

It’s a double whammy really…

While the Trump administration has committed to a major jump in construction spending, they’ve also put up walls to increased immigration.

Why does this matter?

In 2017, an article in the Wall Street Journal warned that barriers to immigration could hurt the economy:

 

“If President Trump wants employers to produce and build more in America, the US will need to improve education and skills in manufacturing and IT. But the economy will also need more foreign workers, and better guest worker programs to bring them in legally,”

 

Shortages of qualified workers can be directly linked to unavailable new immigrants, especially those from Latin America, who have historically helped bolster the applicant pool.

It’s not completely clear, but providing more work visas for skilled immigrants could be the reinforcements that the US labor market needs to keep up with demand.

 

3. Working-class Baby Boomers Retiring in Bulk

Think about it for a second - every day around 10,000 baby boomers retire....

And what happens when the largest generation starts retiring so they can finally get to that bucket list?

Finding people to fill those jobs becomes a serious challenge.

With the youngest boomers around 55, and the oldest in their 70s, the time for a significant rise in open positions is coming quickly - and the US economy is not ready.

But when this will happen is still a mystery.

Employers are concerned with filling the labor gap that will be created by a mass exit, but how to anticipate this is dependent on a few things:

 

  • Social Security Eligibility - the age for full social security benefits has risen, with those Americans born before 1937 eligible by 65, but those born after 1960 won’t get it until 67. To top it off saving for retirement has shifted from the employer to the employee, meaning that boomers are forced to work for longer to ensure a comfortable retirement
  • Financial Need From Recession - Working well into their 70s is not uncommon for baby boomers - two recent recessions (one of them the worst in US history) has vaporized personal savings and pushed normal retirement.
  • Fulfillment From Working - look, there's only so much gardening a person can do. Many people continue to work as a way to stay connected to the community and because they genuinely enjoy working.

Even though baby boomers are working longer into their retirement, the number of retirees is growing rapidly.

And the fact is, they can only work for so long - expect that 10,000 a day to remain steady, or even increase, for the years to come.

 

4. Slow Income Growth Nation-wide

Some experts think the shortage of skilled workers is tied to the lack of wages growth.

The US labor department estimates that 1.5 million Americans are only loosely attached to the job market - these are people who would like to work but don't need to, or choose to go to school instead of working.

Gad Levanon, Chief Economist for North America states that “Companies looking to attract enough blue-collar workers will have to continue increasing wages and, as a result, possibly experience diminished profits.”

Might be a tough pill to swallow - but might be necessary.

Even though the unemployment rate is low, slow income growth as been one of the biggest problems facing the US economy.

Simply put, wage growth is not keeping up with inflation (cost of average goods and services) 

But Is there good news on the horizon?

Yes, actually. Take a look at the Bureau of Labor Statistics on wage growth from 2018 to 2019:

Bureau of Labor Statistics

The sharp spike in wage growth could mean good things for the labor market - especially having to do with those indifferent to joining the workforce instead of college.

And with enticing skilled labor jobs available to those looking for good pay and solid benefits, the decision to go to college over apprenticeship is no longer clear cut.

Heck, the US economy is depending on it.

 

So How Can Companies Adapt to Labor Shortages?

Struggling with labor shortages (and the headaches that come with trying to recruit new skilled tradesmen) doesn’t need to be a burden on HR departments and Project Managers.

More and more companies are using temporary staffing, or temp-to-hire staffing agencies as a way to combat the current climate.

The right staffing agency can be an extension of your hiring department.

In an environment where it’s tough to find skilled workers who are already qualified and vetted, temporary staffing agencies can be a stopgap solution to the challenges facing companies across the US.

Not only can they get the right boots on the ground fast, they mitigate corporate exposure through handling workers' compensation disputes, insurance claims and extended benefits.