Dear Consultant

Dear Consultant: How do we address the shortage of skilled trades workers?

Nate Catuara photo

Nate Catuara

May 14, 2024
Your questions, our expertise.

How do we address the shortage of skilled trades workers?

The shortage of skilled trades workers remains a challenge in the US; the number of full-time skilled trades workers decreased by -16% from 2007 to 20221. We identify three opportunities that homebuilders, manufacturers, distributors, and private equity have used to tackle labor issues:

  1. Consolidate local and regional trades to form national firms
  2. Create trade programs to train skilled labor
  3. Embrace new material technology

1. Consolidate local and regional trades to form national firms

By offering attractive benefits and incentives, national firms can retain labor in tight labor markets. Sterling Group and Blackstone are two groups that exemplified the benefits of consolidation by creating national entities within the installation and R&R space. Sterling Group acquired Artisan Design Group (ADG), and Blackstone acquired Interior Logic Group (ILG), creating two vertically integrated competitors in the installation domain. Each transaction provided a dependable partner to manufacturers and homebuilders while forming a competitive moat around the business by taking much-needed labor from competitors. 

2. Create trade programs to train skilled labor

Investment in training can help ensure employees have the skills and certifications needed to meet the demands of a dynamic market. We hear from architects and builders that they often encounter challenges when specifying products that tradespeople struggle to install effectively. Commitments to employee development can help foster loyalty within the organization—through our proprietary Building Products Dealer Survey, we found that nearly half of the building materials dealers have enhanced their training/onboarding programs to improve labor retention. A few effective examples of putting these strategies into action:

3. Embrace new material technology

Manufacturers and homebuilders are embracing panelized products where possible (e.g., roof assemblies, walls, floor cassettes). These time-saving products can help alleviate the labor shortage by enhancing efficiency and reducing costs. Successful panelized products have primarily been in places the consumer does not immediately notice (structural components). More visible products, such as stone veneer siding like Versetta StoneTandoStone, and GenStone, offer additional opportunities for savings. These products can be installed quickly and without a stone mason. As affordability challenges and labor shortages are at the forefront of everyone’s minds, builders who can find ways to expand their use of panelized products will save on labor and improve construction times. 

Company consolidation, creating skilled trades training programs, and embracing new material technology all help address the shortage of skilled labor and provide a competitive advantage for businesses in the industry. Reach out to Nathaniel if you’d like to discuss more examples or dig into one of these points in more detail.

Our consulting team advises executives and leaders across the nation on solutions that best fit their situation. You can find more information on our building products consulting here

You can submit questions to Dear Consultant here or email us at dearconsultant@jbrec.com.

1 The most recent data available from the ACS public use microdata sample

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About The Author

Nate Catuara photo
Nate Catuara
Senior Manager, Building Products Consulting
Nate synthesizes housing, economic, survey, and industry specific data in order to create reports and recommendations tailored to clients’ needs.

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