While a global health crisis has triggered significant transformations in business and employment across the board, the demand for skilled labor is steadily increasing.
In 2023, skilled trade careers are on the rise, experiencing massive growth in terms of employment opportunities and compensation alike. With the Biden administration’s Infrastructure Bill 2021, the intensity of skilled trade careers in demand will only continue to increase. However, there is much more to the skilled labor employment market than a single piece of legislation.
Read on to discover five key trends that are expected to shape the demand and supply of skilled labor in 2023 and beyond.
1. Persistent Shortage of Labor for Skilled Trade Careers
The new bill does present major opportunities and room for growth, but labor shortages will continue to prove a big obstacle to the market. While this might prove a boon to the benefits of skilled trade careers for craftsmen, this may prove to be a significant concern for employers.
With a growing gap between the demand for skilled labor and the number of potential candidates available in the American workforce, employers need to reposition their hiring and retention practices. At the very least, more competitive approaches are necessary to attract the best quality professionals and retain them for the long term.
2. More Baby Boomers Will Exit the Workforce
The Great Resignation has become a major concern in the post-pandemic employment market. Baby Boomers are among the largest demographic of employees deciding to vacate their roles in favor of better work-life balance. With approximately one-third of the workforce over the age of 50 in skilled trade jobs, the Great Resignation will also significantly impact construction and infrastructure employment.
As more Baby Boomers continue to exit the workforce, the shortage of talent for such roles will only increase. For businesses operating in this sector, this trend implies the problem is no longer simply about filling open roles as they emerge. With the growing supply gap, businesses may also need to consider sustainable ways to retain knowledge, experience, and (ideally) talent without impacting workflows and/or projects.
3. Labor Expectations and Behavior Will Experience Changes
The intense labor shortage will not just influence the way employers behave; employees will also exhibit behavior and expectations in ways very different from the pre-COVID landscape. At the very least, employers can expect that skilled talent now understands they have far more employment opportunities than before. As such, they have far more mobility than previously.
In instances where employers are unable to meet their expectations, such as those concerning compensation and benefits, companies risk losing them to other employers. Likewise, more than ever before, placing employees in dangerous conditions without the appropriate safety or preventive equipment could also trigger higher turnover.
Employees now value compensation and safety far above the conventional attributes of a good employer. Certainly, the pandemic has had a big role in this change. After all, what other event has had such an enormous impact on US workplace safety in the last sixty years?
4. Global Price Surges Will Raise the Cost of Construction Material
With the global inflation rate rising sharply, the cost of raw materials, construction equipment, and safety gear will continue to rise as well. Because all three are absolutely crucial to the viability of the construction industry, businesses have no other option but to purchase these at higher prices. However, this substantial increase will inevitably begin eating into profit margins, and with labor demanding higher compensation and more equitable benefits, payroll expenses will undoubtedly increase too.
Unforeseen expenses, most often those associated with recruitment, bad hires, and employee turnover, are even less desirable than before. Businesses must navigate the acquisition and retention of high-quality talent with care and sustainable practices. This may mean experimenting with different models, such as centralized vs decentralized recruitment, but even more importantly, all business processes, from operations to recruitment need to become far more efficient.
5. Reskilling and Upskilling Will Become Essential
Relative to the four primary reasons for a loss in job satisfaction, an employee’s sense of being replaceable is usually at the very top. With automation on the rise everywhere from mortgage headhunter employment agencies to healthcare, the construction industry is not immune to this trend. Therefore, feeling obsolete is a very common perception among the sizeable skilled labor workforce.
Ultimately, the loss in satisfaction, including that precipitated by an increased reliance on automation, will ultimately increase employee attrition. However, the best way for employers to combat this is to offer more reskilling and upskilling opportunities. This will likely prove effective at both retaining workers as well as helping them enrich their roles and output capacity.