2021 Saw Challenges from Ongoing Skilled Labor Shortages

collaboration
Published On
Feb 16, 2022

While COVID-19 captured headlines in 2021, the story behind the scenes was about the skilled labor shortage.

A 2021 third-quarter survey by the National Association of Home Builders (NAHB) and Royal Building Products Remodeling Market Index indicated electrical contractor shortages were around 76%—and even higher for subcontractors. And according to a December 2021 report from the NAHB, the ongoing skilled labor shortage was a significant limiting factor for residential construction last year.

Brewing for years as a high percentage of experienced electricians aged out of the workforce, the situation was accelerated by the pandemic. According to the Pew Research Center, 50.3% of adults age 55 and older were out of the general workforce—an age group that had already seen declining numbers since 2000.

Although the U.S. Bureau of Labor Statistics (BLS) predicted a slight uptick in employment rates from 2020 to 2030, it expects a slower increase than in previous years, due in part to pending retirement of the aging Baby Boomer population, with as much as 20% of electricians reaching retirement age in the next decade.

The current situation, according to a U.S. Chamber of Commerce survey, has resulted in 88% of commercial construction contractors reporting moderate to high levels of difficulty finding skilled workers. More than one-third of them were forced to turn down work because of it.

This trajectory indicates a shortage of at least 2 million workers through 2025, according to the data firm Construction Industry Resources.

Supply and demand

Retirement is one cause of the problem, but the shortage of skilled labor is compounded by the lack of younger generations entering the field, despite an increasing demand for electricians.

Jobs for electricians are expected to increase by 11.4% from 2019 to 2029, according to BLS—more than triple the growth rate projected for all jobs. Projections call for 84,700 openings for electricians to be added each year over the next decade. This demand is being driven by:

  • Expanded use of electronic devices, communications equipment and building components that require electricity
  • An upsurge in new construction (with residential electrical permits up 31.6% from pre-pandemic years)
  • The need to update the power grid to accommodate increased demand for renewable power sources, as well as increased electricity consumption, which the U.S. Energy Information Administration expects to rise 12.4% in 2022.

The supply side is a little trickier. Overall, there has been a significant drop in interest in construction jobs among high school and college students to only 16.7%. Trade school enrollment is down, as Gen Z (people born after 1996) seem more inclined toward the traditional four-year college degree route than previous generations—although millennials were already more prone to seeking a four-year degree than the generation before them (39% vs. 29%).

Seeking solutions in 2022

President Biden’s promise to rebuild the grid as part of his Build Back Better plan indicates the mounting need for more electricians. Among the provisions in the proposed $1.75 trillion Build Back Better Act is funding necessary for career technical education, JobCorps and Youthbuild. Funding high school electrical training programs offers students experience and knowledge of the industry that might inspire careers in the skilled trades.

Incentives such as scholarships and apprenticeships to trade and vocational schools can encourage young people to seek training as electricians. Workforce rebates may motivate contractors to train new electricians.

Concurrent with funding, outreach is a critical aspect of solving the labor shortage. Recruitment at high schools is an effective way to appeal to young people. Offering on-the-job training can result in more electricians entering the workforce sooner. Some union contractors are already achieving successful recruiting rates by offering workforce development.

About the Author

Lori Lovely

Lori Lovely is an award-winning writer and editor in central Indiana. She writes on technical topics, heavy equipment, automotive, motorsports, energy, water and wastewater, animals, real estate, home improvement, gardening and more. Reach her at: Lo...

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