North America is experiencing a significant skills shortage. In the past, those with a post-secondary education – a degree – had great leverage in terms of their employability. Recently, the situation has been largely reversed.
As a result of a major social push for young people to seek higher education over the last few decades, degreed workers began to saturate the labour market, leaving skilled tradespeople in short supply. For the first time in recent history, blue collar workers are finding themselves with the most leverage of all in the marketplace.
Because employers are having so much trouble finding the workers they need, tradespeople can negotiate for higher wages, benefits, and better jobs. For many businesses that depend on skilled labour, this shortage is the key limiting factor in their ability to grow. To mitigate this challenge they are increasing wages, paring down their hiring requirements, and bringing on as many prospects as they can so as not to lose them to competitors.
Fighting each other for the dwindling remains of a sparse workforce is a losing battle, and many companies have been looking for longer-term solutions. It is not only businesses who are invested in turning this issue around. If companies cannot grow, neither can the national economy, and this has prompted many other stakeholders to bring new ideas to the table.
Investing in skills development
In July of 2018, President Donald Trump signed an executive order designed to direct more investment toward skills development for American workers. Fifteen major employers, including GE, Microsoft, and Walmart, have pledged to hire nearly four million workers over the next five years. These companies have undertaken to provide training to bring low-skilled workers into the skilled trades. Universally, there is hope that this will help to mitigate the skills shortage.
With this level of investment, these employers are backing the view that low-skilled workers represent a huge untapped market – possible the best available resource – for workforce development. However, many savvy employers are exploring another untapped pool of prospects. These companies are looking at high school students to fill out the skills gap. And for the thousands of American students currently enrolled in the programs these companies have generated, the labour shortage represents a fresh opportunity.
Through these partnerships, companies provide students with the learning materials, the training, and on-the-job experience to prepare them for a career in their chosen field. In some cases, students graduate these courses with certifications enabling them to begin looking for work in that field immediately after finishing school. In other cases, students are offered grants to pursue further education at a vocational or technical school.
As employers look to high schools to help them mitigate labour challenges, the National School Boards Association’s “Commission to Close the Skills Gap” is meeting them half-way. The Commission has developed a plan to help school boards around the country prepare students for the opportunities awaiting those who follow a career path into the trades.
This plan includes recommendations for how school boards can best engage with the business community to understand their needs, and also a focus on key ‘LifeReady’ skills to prepare all students for the very different challenges facing them as they enter employment.
According to the Commission, these skills include reliability and dependability, critical thinking, customer focus, and teamwork. The commission also recommends that schools place the same amount of emphasis on career preparation as they are already place on preparing students for college.
The Commission has also offered advice on how school boards can best collaborate with industry associations, chambers of commerce, and businesses to design programming that will help students acquire LifeReady skills and, for some students, specialized ‘Job Ready’ diplomas that have been designed with employment in mind.
“As the leading advocate for public education, this issue is of serious concern to NSBA and school board members across the country. School board members are in a unique position to take action, and the business and trade association members on the commission are committed to working with us to ensure that all students can graduate with the skills they need to succeed no matter what life choices they make,” said NSBA Executive Director and CEO Thomas J. Gentzel in the Skills Gap Commission Report released in March of this year.
Across North America
The situation is similar in Canada. As the baby-boomer generation moves toward retirement, a substantial portion of new workers is going to college to prepare for a professional career path. As in the U.S., this has left the low-skills and skilled-trades labour markets short on workers. And as the technology sector continues to innovate, the barrier to entry into the various trade sectors is getting higher. Trades workers today require a great deal more preparation and training than ever before, but fewer and fewer people are acquiring these skills.
A report released earlier this year by the Business Development Bank of Canada found that more than fifty percent of small-to-medium-sized enterprises believe that the labour shortage is the most significant factor limiting their ability to make investments in long-term growth. According to Statistics Canada, 380,000 new payroll jobs became available in 2018 while only 140,000 new workers entered the workforce.
Canadian companies are also looking to the future workforce for a solution to the problem. As new technologies are developed and incorporated into business and industrial processes, the skills required to do these jobs change. The technological landscape within the trades becomes more challenging to navigate and workforce preparation becomes more important. The net result is that the lack of people qualified to do the work is having a significant effect on the economic situation for all of North America.
A shift in mindset
The root of the labour shortage can be traced to a decades-long push for youth to pursue a higher education than their parents. Those blue-collar workers who spent their lives working in the trades wanted better for their children. They were seeing how technological innovations were making their industries more challenging to enter without an education. They lived in an economic situation where it was the college-educated professionals who had the least trouble finding work and who could negotiate the best salaries and benefits.
Trades workers at the time also worked in an environment where safety standards were low and their jobs often relatively dangerous.
As a result, they placed much more emphasis on pushing their children to acquire a college education than on preparing them for immediate employment, and the trades were left with fewer and fewer qualified workers. But today, things are very different. In the current economy, it is the skilled trades worker who has the least trouble finding employment. Companies are building entire programs dedicated to seeking them out, bringing them on, and making them comfortable. Salaries are high, benefits are generous, and working conditions are held to exceedingly high safety standards.
Upping the challenge
Even further, as new technologies are invented and incorporated, trades are becoming more interesting for those who are looking for a job that can challenge them. There is a social misconception that vocational and technical trade schools are a fallback for people who would not be interested in, or simply not make it through, higher education. In reality, the companies who hire trades workers are on the cutting edge of innovation in highly specialized fields, and the work is often highly challenging and rewarding.
Perhaps the most convincing argument for acquiring a vocational diploma and entering the trades is that every year pursuing a college degree seems to make less and less financial sense. A Pew Research study says that as of 2018, one third of American adults under 30 have student loan debt, and across the country, that debt totals more than $1.5 trillion.
Paying with stress
A shocking and revealing finding, according to a 2019 report by Merrill Lynch, is that 36 percent of those who financed their secondary education through student loans now feel that incurring that debt was not worth the results. It is becoming increasingly difficult to leverage a degree into a job that pays enough to allay the financial stress that comes with the debt.
This is the message that many companies, industry associations, and workforce development groups are trying to send to students through high school partnerships: Vocational schools and the skilled trades can be a viable, challenging, and rewarding career path.
Throughout North America, these organizations are collaborating with school boards to bring change. By reaching out and communicating with students, they hope to bring general awareness to the next generation about what working in a skilled trade is really like today: a stimulating job exposed to advanced technology, innovative problem solving, and both suitable rewards and respect.
Jobs that just recently were scorned are now providing an enviable future to today’s job seeker.