Dive Brief:
- Skilled trades account for about 20 million jobs in the U.S., or 9% of the total workforce, according to a new report from labor market intelligence firm Lightcast — and the need for that talent only continues to increase.
- The report defined skilled trades as 135 hands-on, in-person occupations requiring specialized education, training, certification, apprenticeship or experience but not a college degree. By that definition, there are approximately 2.1 million skilled-trade job openings every year, and about three job openings for every person who has finished a relevant training program.
- This has created an estimated talent gap of 1.3 million workers, per the report. In seven of the 10 most in-demand skilled-trade occupations, there is already a significant labor shortage, with retirement accounting for about 40% of annual openings.
Dive Insight:
The skilled trade category has not previously been consistently defined or categorized, the report said. As a result, employers, educators, policymakers and workforce leaders have faced challenges when it came to examining sector data, identifying talent gaps and deciding how to best invest in the future of this workforce.
Meanwhile, the supply of electricians, technicians, construction workers and other skilled professionals has not kept up with the demand. In addition, more than 25% of skilled-trade workers are 55 years old or older, “suggesting demographic pressures could deepen the talent shortage,” the report said.
“The impending lack of skilled trades workers has been a resounding issue in our economy for years,” Ron Hetrick, principal economist at Lightcast and a contributor to the report, said in a statement. “These are people that we rely on every day to create new buildings, maintain our infrastructure, and thousands of other tasks that many of us often take for granted. [...] They're desperately needed now, but critically needed later.”
The pay rate for a skilled trade job is about $13,000 more annually than the median salary for other jobs that don’t require a four-year degree, the report said, adding that about one in three skilled-trade workers “move into a manager or executive role as their next occupation.”
Furthermore, there’s been increased demand for skilled workers due to new infrastructure investments as well as growth in the manufacturing sector and reshoring. “Data center growth alone has added a net 315,000 skilled-trade workers over the past five years,” the report said.
In addition, more than 70% of skilled-trade jobs have a low AI exposure score (below 30%), meaning they’re less at risk of being lost to automation.
However, even as attrition, retirement and demand have created shortages in the skilled trade sector, younger workers may be looking to fill in those gaps. A recent survey from Resume Templates found that six in 10 Generation Z workers and college graduates are considering work in skilled trades such as construction, electrical, HVAC, plumbing, building maintenance and manufacturing this year. That survey said that younger workers saw skilled trades as potentially offering more stability and solid pay compared to white collar jobs.
