The Looming Crisis: America's Skilled Tradesmen Shortage & Its Impact

Many facets of the U.S. economy have made incremental improvements over the last two years, but one major concern, a skilled tradesmen shortage, is not going away anytime soon.

In January 2024, the Associated Builders and Contractors (ABC) organization estimated that the construction industry will need to attract an additional 501,000 workers this year on top of the normal pace of hiring to meet the demand for labor. In 2025, another 454,000 new workers will be needed to keep the industry on track.

“ABC estimates that the U.S. construction industry needs to attract about a half million new workers in 2024 to balance supply and demand,” said Michael Bellaman, ABC president and CEO. “Not addressing the shortage through an all-of-the-above approach to workforce development will slow improvements to our shared built environment, worker productivity, living standards, and the places where we heal, learn, play, work and gather.”

The Impact of the Skilled Tradesmen Shortage

CNBC reported that the tight U.S. labor market, where job openings have reached as high as two for each available worker, is helping stoke the engine of inflation that continues to challenge companies looking to hire skilled workers.

“Broadly, there are two factors shaping the interaction between construction worker supply and demand,” said ABC Chief Economist Anirban Basu. “There are structural factors, including outsized retirement levels, megaprojects in several private and public construction segments, and cultural factors that encourage too few young people to enter the skilled construction trades. There are also structural factors, including those related to interest rates, consumer sentiment, and general economic performance.”

From a shortage of electricians to plumbers to carpenters to machinists to steelworkers to welders to pipefitters, the skilled tradesmen shortage is a drag on the U.S. economy’s continuing recovery from the pandemic.

By some estimates, this talent shortage could mean that 85 million jobs go unfilled globally by 2030, leaving $8.5 trillion in unrealized annual revenue on the table.

Concerning Aging Patterns of Skilled Workers

While there is no turning back the clock on America’s aging population as the Baby Boomer generation heads into their retirement years, the National Center for Construction Education and Research (NCCER) says its research shows that the average age of craft workers in the construction workforce is aging even faster than the general population.

NCCER says that the average age of craft workers was 36.8 years old in 1994; 40.8 years old in 2014; and 42.9 years old in 2020. The average age of a U.S. citizen in 2020 was just 38.5 years.

“If the current aging rate continues, in 2030 the average age of the craft workforce will be greater than 46 years old,” says NCCER.

New Survey: Most Job Candidates Lack the Skills Needed

The Associated General Contractors of America (AGC) says a new survey shows significant flaws in the nation’s approach to preparing workers for construction careers and that hurts the economy.

“Few candidates have the basic skills needed to work in high-paying construction careers, forcing short-staffed contractors to find new ways to keep pace with demand and undermining efforts to build infrastructure and other projects,” said the workforce survey by AGC and Autodesk. “The results highlight significant shortcomings in the nation’s approach to preparing workers for careers in construction.”

Ken Simonson, the association’s chief economist: “The biggest takeaway from this year’s Workforce Survey is how much the nation is failing to prepare future workers for high-paying careers in fields like construction. It is time to rethink the way the nation educates and prepares workers.”

Highlights of the survey:

• 85 percent of construction firms report they have open positions they are trying to fill.
• Among those firms, 88 percent are having trouble filling at least some of those positions – particularly among the craft workforce that performs the bulk of onsite construction work.
• A “shocking” 68 percent of firms report applicants lack the skills needed to work in construction.
• In addition, 33 percent of firms report candidates cannot pass a drug test.

10 Reasons Behind the Skilled Tradesmen Shortage

The skilled tradesmen shortage in the U.S. cannot be traced to a solitary reason but there are many factors that created this situation. Here are 10 reasons contributing to the skilled tradesmen shortage in the U.S.:

1. Aging workforce: Many skilled tradesmen are reaching retirement age, and there aren't enough younger workers to replace them.
2. Stigma surrounding trade careers: Society often places a higher value on college degrees, causing many young people to overlook trade careers.
3. Lack of exposure and education: Many high schools have reduced or eliminated vocational training programs, limiting exposure to trade skills.
4. Misconceptions about income potential: Many people believe that trade careers offer lower salaries compared to jobs requiring college degrees, which is not always the case.
5. Shifting economy: As the U.S. economy has shifted from manufacturing to service-based, fewer people have pursued trade skills.
6. Increasing technology: Advancements in technology have automated some trade jobs, reducing the demand for certain skilled tradesmen.
7. Insufficient training programs: There is a lack of accessible and affordable training programs for those interested in pursuing trade careers.
8. Immigration policies: Stricter immigration policies have reduced the number of skilled tradesmen coming from other countries to work in the U.S.
9. Economic downturns: During recessions, the construction industry is often hit hard, leading to layoffs and fewer people entering trade careers.
10. Physical demands: Some trade careers are physically demanding, which may deter some people from pursuing them as long-term career options.

Addressing these issues through education, training, and societal perception shifts could help alleviate the skilled tradesmen shortage in the United States.

Bridging the Skilled Tradesmen Gap

The AGC survey said employers are finding creative ways to bridge the skilled worker gap, among those:

• 63 percent, a skyrocketing increase from 39 percent in 2022, have added online strategies, such as using social media or targeted digital advertising, to connect better with younger applicants.
• 81 percent have raised base pay rates for their workers during the past year.
• 44 percent are providing incentives and bonuses.
• 26 percent have improved benefits packages.

“Contractors are also increasing investments in their internal training programs in an effort to address the fact many candidates lack the basic hard and soft skills needed to be successful,” said the survey.

Tactics include:

• 41 percent of firms are boosting spending on training and professional development programs.
• 25 percent are enhancing their online and video training capabilities.
• 14 percent are using augmented and virtual reality technology to better train workers.

Role of Technology in Addressing the Worker Shortage

The survey says that artificial intelligence (AI) and robotics will positively impact construction costs by automating manual, error-prone tasks over the next five years, as well as improving the quality of construction jobs while making workers safer and more productive.

“For potential hires, a career opportunity in construction should mean an opportunity to work with advanced technology and perform safe, meaningful work,” said Allison Scott, director of customer experience & industry advocacy at Autodesk. “As firms adopt more digital technologies and create stronger classroom and training pathways, we’ll begin to see a new generation enter the industry equipped with the tools and skills needed to tackle construction’s largest challenges.”

The survey also highlighted that too few schools offer classes in construction or even expose students to the opportunities that exist in the field.

“Boosting funding for programs that expose students to skills in careers like construction will signal to students that there are multiple paths to success in life, and one is not better than another,” said Simonson.

The Time to Act is Now on this Important Issue

The skilled tradesmen shortage in the United States is a pressing issue that demands immediate attention and action. As the construction industry struggles to find qualified workers, projects are delayed, costs rise, and the economy suffers.

The aging workforce, combined with a lack of exposure to trade careers and insufficient training programs, has created a perfect storm that threatens to undermine the nation's growth and prosperity.

It is crucial that we address this issue head-on by investing in vocational education programs, changing societal perceptions of trade careers, and supporting initiatives that promote the value of skilled labor.

Employers must also continue to adapt, using innovative strategies to attract and retain talented workers, such as leveraging technology, offering competitive wages and benefits, and providing ongoing training and development opportunities.

The skilled tradesmen shortage is not an insurmountable challenge, but it requires a concerted effort from all stakeholders – educators, employers, policymakers, and society.

By working together to bridge the gap and create a pipeline of skilled workers, we can ensure that the United States remains a leader in the global economy and that our infrastructure, buildings, and communities continue to thrive.

The time to act is now. We must recognize the value of skilled tradesmen and take steps to support and grow this vital segment of our workforce.