By Ezra Greenberg, Erik Schaefer, and Brooke Weddle
US manufacturing and construction face a hiring crunch for skilled workers such as carpenters, electricians, welders, and plumbers. A few creative actions can help overcome gaps and boost performance.
The US skilled labor market is facing record-high pressure, particularly for companies with manufacturing and construction operations. Increasing labor scarcity, amplified by the COVID-19 disruptions, has intensified competition for talent, raising the sectors’ average wages by more than 20 percent since the first quarter of 2020.1 Since money wages have rarely, if ever, fallen in the United States, this cost reset is effectively permanent, threatening margins and long-term growth. And this squeeze on labor is set to get worse as demographic headwinds intensify.
To understand the scope of the problem and identify potential countermeasures, we looked at several critical skilled roles, including welders, construction laborers, electricians, and other skill categories that are vulnerable to increased churn (see sidebar, “Our methodology”). For these roles, we found that from 2022 to 2032, annual hiring is expected to be more than 20 times the projected annual increase in net new jobs (Exhibit 1). This extraordinary rate of churn could cost companies more than $5.3 billion every year in talent acquisition and training costs alone.2 The additional lost productivity as new talent is brought up to speed could amount to significantly more.
Read full article here: https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/tradespeople-wanted-the-need-for-critical-trade-skills-in-the-us
