Widening Gap in Skilled Trades Worries Economic Experts

I read the news today, oh boy!
-The Beatles, “A Day In The Life,” 1966

We read the news today regarding skilled trade workers and “oh boy!” is right. The current shortage of workers is staggering, and the gap between skilled workers needed and available workers is widening.

The facts are disconcerting:

• 23% of builders are reporting a serious shortage of direct employees and 25% are reporting a serious shortage of subcontractor labor. Another 44% report some shortage of direct employees and 49% are seeing some shortage of subcontractor labor.
• Combined, the news is bleak. The number of builders reporting labor shortages has been steadily climbing, from 20% in 2012 to today’s 67% for direct hires and 74% for subcontractor labors.
• The Bureau of Labor Statistics predicts an additional 200,000 construction trade job vacancies annually until 2026, due to labor force exits (retirements, etc.).
• Labor shortages are already having negative financial implications for builders. In the previous year:
  • 40% turned down projects (vs. 15% in 2013)
  • 32% accepted new orders at a slower rate (vs. 10% in 2013)
  • 26% lost or cancelled sales (vs. 9% in 2013)
• In Indiana, the Associated General Contractors of America found that:
  • 72% of the state’s contractors were having trouble filling some or all open positions with skilled trade workers.
  • 83% said they needed to hire even more workers because business is booming.

The reason is simple, and so is the math.

Few places better illustrate generational gaps than the skilled trade workplace. There is a wide divide in the workforce that worries economic experts who say there’s a crisis around the corner.

About 68 percent of Baby Boomers remain in the labor force. The U.S. Bureau of Labor Statistics knows that nearly 40% of today’s skilled laborers are 45 years old or older. Only 22 percent are 25- to 34-year-olds.

The problem – and it’s a big one – is that younger generations are neither trained nor interested in filling the careers from which Baby Boomers are retiring or aging out of. And projections indicate there won’t be enough new skilled workers to fill these jobs for many years to come.

The result: The United States faces a national labor shortage in general construction and skilled trades such as plumbing, electrical, and HVAC work. And its future impact will have a devastating effect on the economy – for everyone.

How Hub & Spoke Can Help

Indianapolis entrepreneurs David Decker and Travis Tucker sought a solution to the problem – starting in the City of Fishers. In late 2018 the two Hamilton County entrepreneurs unveiled their plan to construct the Hub & Spoke Design Center. A $14 million, 92,000 square foot complex that will bring back the art and appeal of learning skilled trades. An incubator for creative thought, collaborative training, and technical tinkering, Hub & Spoke promises to put skilled trades back on the table and into the minds of students and committed community participants.

“Some of the students will discover and get excited about a specific aspect of the venture – like HVAC – because they appreciate the craftsmanship and have learned they can make a great living at it. Hub & Spoke will pair students interested in furthering their education with an affiliated industry partner,” says Hub & Spoke Founder David Decker.

“The Hub is the center of all activity and connection,” Decker says. “The Spokes represent the conduits of help and support necessary to advance and elevate people and our industry.”

How You Can Help

Hub & Spoke is currently seeking partner companies to invest in our long-term vision – a trained workforce that will elevate the industry. We need experts like you in the plumbing, electrical, home building, supply industries and many more to share your knowledge and lend your professional guidance. Click here to find out how you can make a difference in workforce development, or sign up below to stay up-to-date with Hub & Spoke.