Where Have all the Tradesmen Gone?

By Marilyn Sanford
Published on: October 12, 2018

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According to one of the most comprehensive studies completed on the independent workforce*, the number of freelancers (or independent workers) will surpass employed workers within 10 years.  Some studies predict independent workers will represent in excess of 60 percent of the workforce by the end of the next decade. To put this into perspective, historically, freelance has represented 10 percent of the workforce.

This is predicted to impact most professions, but to hit construction, manufacturing and retail the hardest.

*(“Freelancing in America” is the most comprehensive study of the independent workforce, commissioned by Freelancers Union and Upwork)

In addition, a Canadian study undertaken by BDC  (Business Development Bank of Canada) predicts a steady decline in the workforce over the coming 10 years as baby boomers retire.

This shift in the labour force, both the entrepreneurial trend, as seen in the growth of freelancers but also the workforce demographic shift, is one of the single greatest obstacles to business growth and is only beginning to have a serious impact on small to medium size businesses (SMEs). 

This is impacting all business sizes, with SMEs being the hardest hit.

Following is an impact graph showing the consequence of the labour shortage on SMEs.   Critical to this is the impact on efficiencies. This is especially difficult in construction, likely influenced by the interdependence of trades to site readiness. Where trades can be delayed for unpredictable periods because the site is not accessible. In peak periods, employees may work long hours, short staffed, manage multiple sites in a day and endure interruptions in detailed workflow, all creating a challenge and often delays in the critical final stages of the work.

“The construction business is one of the largest industries in the world, with an annual market capitalization exceeding $10 trillion. Despite its tremendous potential, many firms are struggling due to a shortage of skilled workers, weak productivity growth, and new data showing that the industry generates immense waste, both in terms of human productivity and physical materials.” (Posted on August 28, 2017 by Tyler from https://esub.com/reshaping-the-construction-industry-automation-tools-and-technology/,)

Estimates suggest that only 25 minutes out of every hour is billed in construction. (It has been suggested that CI (CEDIA Dealers) are billing 21 minutes in every hour on average.) Without seriously rethinking construction processes, especially as it relates to the labour shortage, there is little hope for improvements in efficiency.

To add to this, fewer people are choosing construction as their life vocation. As the boomers retire, the gap between supply and demand is going to grow. In the best scenario, businesses will look inward to improve efficiencies, but this will only address some of the problem.

Both the U.S. and Canada are struggling to keep up with demand. The future of labour in the construction industry is uncertain, but more importantly it is ready for change. The question is what that change might look like. Automation might be one opportunity, but few of the trades lend themselves to this.  Investment in robotics, process flow and systemization are underway to find ways to improve efficiencies, however, many trades such as electricians, carpenters and plumbers are challenging professions to automate and process flow and systemization are difficult across disparate trades.

Firms are already undermanned, with demand exceeding supply in increasing numbers. Those who will succeed and grow, will understand the need to rethink the labour paradigm. They will find ways to improve their efficiency, and therefore billable hours, to offset, if only in part, the challenge of finding and retaining talent.

The BDC study noted that the firms hardest hit, as a rule, have not updated their operating systems, many still using old processes, like running on excel spreadsheets for example. Few have invested in internal technologies to track ordering and parts, ensure thorough and accurate sales details, manage service or track project logistics. These systems may seem expensive; it is those who do not invest who are the most likely to see declining returns and continue to struggle to manage their businesses.

Following is food for thought, possible ways to grow efficiencies and/or billable time, without adding people or over stressing existing staff:

  • Track everything. Take the plunge and implement an operating system. There are a growing number of specialty offerings designed for your sector. Not having this in place is a handicap.
    • Find inefficiencies and fill those gaps, through process, management or change
    • Know where the non-billable time is coming from
  • Partner with a local firm that provides services you don’t currently offer to expand offerings.
  • If applicable, find partners for out of town work. Or better yet, don’t take out of town work if you are not properly staffed to do so. Refer or partner.
  • Identify your core talents and invest more in them.
  • Ensure you pay your staff well and work hard on your culture; no one leaves if they love what they do and are paid well to do it.
  • Find ways to employ your staff in quieter times.
  • Make friends with the local colleges or trade schools.
    • Offer your firm for their practicums
  • Find ways to locate freelance or available talent for peak periods. (Like LincEdge… just sayin’)
    • Make friends with your competitors. They are the least of your worries

Labour dependent businesses are going to be increasingly challenged over the coming years.   The survivors and thrivers will not be those who do business as they do today.

We’d love to hear what you are doing to deal with the current and growing labour shortage. It is time for all of us to up our game.

Marilyn Sanford

Marilyn Sanford

Marilyn Sanford is the President of LincEdge, a software developer which supports accessing and sharing labor resources across the CI channel. She is a CPA, a CEDIA Fellow and co-founded an award-winning custom install firm whose success spanned 23 years.

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