John Manzella, world recognized speaker on economic trends and globalization, addressed members of the American Architectural Manufacturers Association (AAMA) regarding labor, skills and the workforce. Though this was a large session open to all members, Manzella dubbed it a “very large roundtable,” signaling to the crowd that he wanted to this to be an open exchange of information designed to help everyone solve some of these issues.
He started with the good news: the fact that the unemployment rate is at 4 percent, but then drilled down on some of the challenges.
“The biggest problem is the worker participation rate which is dismal and continuing to decrease,” he said. “If you think you can’t find labor today chances are the situation will only become more severe.”
This is exacerbated by the opioid crisis.
“Many men on disability are actually on opioids,” he said.
Then you have the 10,000 baby boomers each day that reach retirement age who take their skills with them. These baby boomers can’t be immediately replaced by a recent college graduate who may fill that role. And, according to Manzella, only 40 percent of four-year college students graduate on time.
“They can’t take a job because they are still in class,” he said.
He then broke this all down on the real economic effect this is having on U.S. companies.
“There is an annual lost revenue of $1.75 trillion dollars each year for U.S. companies,” said Manzella. “If you can’t find labor you can’t grow.”
Before you close up shop and go home, there are ways around this, one of which is increased wages, though he acknowledged that a lot of companies can’t afford to do that.
“While wages aren’t increasing more money is being put into benefits which are going up quite a bit,” he said.
Manzella also shared his thoughts on the immigrant workforce and pointed out that a big percentage of our growth comes from this group.
“To me it’s very important that we continue that,” he said. “You have heard a lot of negative news about immigrants but they are less crime prone … they are very incentivized to do a great job.”
So with everyone struggling to find labor, Manzella shared a very powerful fact.
“Recognize that knowledge is the only sustainable competitive advantage. It’s all about training,” he said. “If you keep training your people and they have fresh knowledge, they are more likely to stay.”
Of course there’s also those workers who don’t have to come from four-year colleges. Manzella said that the apprenticeship program has really worked well in Europe, but “In this country there is a negative stigma if you don’t go to college … maybe high schoolers are the next step.”
In that vein, he encourages companies to reach out to the community colleges and to high school counselors and get them to send you people.
When Manzella encouraged companies to share their stories and challenges, one attendee shared his concern about the baby boomers retiring and offered some advice.
“We need to collect that information from these valuable employees and we have to collect it fast.” Others shared valuable advice as well related to these challenges being felt throughout the industry.
The AAMA Conference concludes today.