Join Ron Hetrick as he discusses his recently released report in collaboration with Tallo: Who is Going to do the Work?
As Ron wraps up our final Data Dive for 2022, you can be prepared to hear about the skilled trades and how the labor market ties in.
Transcript:
Chayce Kowalski:
Hello everyone. Seems like we have quite a few coming in. Lump sum here, that's pretty awesome. I see the numbers still climbing.
Hopefully everyone had a fantastic Thanksgiving and hopefully they had safe travels as well. I am going to give it just another minute here before we get started.
Alright. See the attendees list is starting to slow down with it’s pour in here. So hello and welcome everyone. I am Chayce Kowalski. I'm an account manager here at Lightcast. For today's data dive, we have Ron Hetrick, our senior labor economist, here to discuss The Big Question: Who is Going to do the Work?
We're going to have 20 to 30 minutes of content. There will be time for Q&A, so please write in those questions as they come up. And then there's going to be a brief survey at the end. Information you can provide will be greatly appreciated. Any feedback as we start to plan for next year and what that's going to look like as it pertains to these webinars.
We will be sending out a recording for this tomorrow via email, so feel free to share that recording internally with those you think that would benefit. And of course, if you have any specific questions as it regards your business and this information, this content, this presentation, definitely reach out to your account managers or anyone else you might be in communication with.
And with that, I'm actually going to pass this over to Ron so we can get started.
Ron Hetrick:
All right, thank you so much, Chayce. We do have quite a bit to cover today. If you've ever seen me present the Demographic Drought, I always tell people upfront I talk really fast. It's usually like me to prepare way too many slides and then try to plow my way through it.
But this particular article, this particular presentation today is the first time that we're starting to deliver this particular content. However, we're going to tie it into the Demographic Drought side because it's so important to look at these things together.
So with that as the backdrop, let's just dive in and let's talk about basically what we're looking at. We're going to illustrate what this problem is. We're going to talk about what the solutions particularly are, if there are. Which we always talk about with Demographic Drought, there's some things that you really can't fix. And then lastly, we're going to talk about our data. What can it do to help you if you're in one of these industries, if you're one of these companies trying to find these types of people? How can we help you out?
So with this in mind, let's go ahead and dive into this particular presentation. So in the past summer, after a lot of time spent on the road talking about this with people. We decided to conduct a survey and we interviewed 1,500 high school students. This is from Tallo's database. And these definitely are students who are thinking of going on to college, but we wanted to get some impressions as to things that were happening around them. So we asked these 1,500 high school students what are their opinions of things like skilled trades and their thoughts around community colleges?
And we found out that there's still a very large number of these people that have planned to go that four year route, but we wanted to understand a little bit more of why that is the case? Because as we're going to find out in this deck, there's some incredibly sobering things that I'm going to talk about today that everybody really needs to be thinking about.
So let's get to the key takeaway. In our survey, and remember, I did say that our survey was going to be bent more towards a person who is probably looking at that college route. Around 85% of our respondents said that they did intend to eventually pursue a four year degree. So maybe not right after they graduate, but in the course of the next several years, they do intend on pursuing a four year degree.
There was another study that a lot of people have been quoting recently. It came out about in, it was basically done in the summer of 2021, and they found about 55% to 60% of people were saying that they intended to pursue a four year degree.
And at the time, they were just talking about how this is such a catastrophe. All these people now are saying college is too expensive and all of these other things, and they really position this as being a very big negative for America. But what I'm going to tell you today is we really need to hope that's more towards the line of what's going to happen versus what we're finding in our 85%.
But we are seeing that according to the most recent surveys, probably around two-thirds of high school graduates do intend on enrolling in post-secondary programs. And a lot of these people do intend to pursue a four year degree. This all sounds great. This is what we've talked about as a society for decades.
So with this in mind, I'm going to now go back into the Demographic Drought. If you've seen me present this before, I'm going to do it again, but we're going to start to pay attention to some things here that I've talked about in the past, but we've never really thought about how we're going to quantify these things.
So let's start with this concept in our minds of two-thirds, around two-thirds of every person coming out of high school, up to 85% maybe, are saying that they want to pursue a four year degree. So let's talk about right now. We know that we have had a very significant labor crisis this year. A lot of that is because a lot of people have dropped out of the labor force and they haven't been returning.
So even in the past two months, our labor force participation rate in the US, meaning those who are working or looking to work, has actually been going down. We're really not recovering back to the level that we need, and we need about 3.5 million more workers just to service the economy in the way that we were prior to the pandemic.
Our labor force is not keeping up with our population growth, which has been about 4.2 million. So we are feeling a lot of pain. We're seeing a lot of help wanted signs because we have this significant gap in the number of people that need to be working just to service our overall economy.
So what happens when you are missing all of these people when they don't come back to work and you have a lot of companies who are trying to grow? You get this explosion in job openings. Currently the number is at 10.7 million. You can see how absolutely outrageous these job openings numbers are. The new job openings numbers come out tomorrow for the month of October.
Estimates are this could go down a bit, maybe go down significantly, maybe not even move a whole lot. But at the end of the day, we were at seven million job openings prior to the pandemic. We're almost at 11 million now, so we still have several million job openings just to get ourselves back to what was considered a very high level prior to the pandemic.
So be very careful when you hear things about layoffs and such because you have to understand we are dealing with historical numbers that we've never seen when it comes to people who need workers. So one of the big things that I talk about, especially in bridging the gap, I'm really going to be focusing on today is we have this really dated view of who we are as an economy. Okay? We have a vision of ourselves, we have a view of ourselves that sees our general workforce population as being undereducated. Not having a college degree. But if you look at our labor force, the largest bucket of our labor force is actually people with a four year degree, 63 million, and about 36 million that at least have an associate's degree or higher.
And then you have, you go to the left side. These are people with only high school diplomas or less. And as we talk about this kind of mismatch of a very educated nation, especially a very educated workforce. And then the types of jobs that we're creating. So if we look at our 10.7 million jobs that we have open, about six and a half million, and that's a conservative estimate, do not require a college degree of any kind or just a very low level college degree or some college. Yet, we simply don't have those people. So we only have two million unemployed people in our country right now who fit this description of only having a high school diploma or less and actively looking for work. So you can see that we have a nation that is trying to hire people that simply don't exist anymore.
So let's make sure that we keep this in the back of our minds as we keep going forward. This has really been evolving quickly. In 2015, we had three times as many unemployed, lower skilled workers for every lower skilled job opening than we have now. Our society is changing very rapidly. And why this is happening is occurring because of two reasons.
One, our younger workforce, 16 to 24 years old, has been going down. Our growing labor force, and I'm going to talk about this a little later on in this deck, people who are over the age of 55 is a large part and a large percentage of our growth in our labor force. But a lot of people who take these kinds of heavier skilled jobs or the more dirty jobs, like skilled trades are going to be in that kind of 16 to 24 year old population. But that's one that has actually been seeing a decline.
So if we look at our 16 to 19 year olds, we see that we've grown in population, but we see that's the top line. That's the number of people who are 16 to 19 years olds in our population. It's gone up, it's been easing down over recent years. On the bottom is the labor force. So it's those people 16 to 19 years old who are participating in the labor force. And you can see as the population was going up, the number of them was going down. The labor force participation rate for people 16 to 19 years old is around 36% to 37%. Which means about one out of every three 16 to 19 year olds are actually working at any given point in time. Another thing that we're going to want to keep in mind as we talk about what our findings were.
Another thing that's happened at this time is we've had a significant drop in immigration. So immigrants are another population that do a lot of these kinds of non-college degree jobs. And we have had a very significant shortfall in the past several years, around two million immigrants that would also do this type of work.
So we have a younger population not really participating in the labor force. A lot of them saying they want to go to college combined with a drop in immigration. Immigrants are one out of every four of our construction workers and one out of every five of our manufacturing workers. Just so we can have a feel for this.
So let's start to talk about what we're starting to see going forward, and we're going to unfold what we saw in the survey with these. So one of the things that we've been talking about in the Demographic Drought articles is our population growth in the past decade was the lowest it ever has been since the Great Depression. When you didn't have children, really, because you didn't know if you could feed them.
So really low population growth in the past decade. But this is the graph that I really need everyone to pay attention to and focus in on because I'm going to start to give you some numbers, and I want you to use this as your framework for how you're going to think about the data that I'm about to show you.
This is our US population by age. Okay? So if you go to the top, that's the number of 22 year olds we have in our population all the way down to the number of one year olds and less than one year olds. And if you can see, it slowly works its way in, which means we simply have less and less. Fewer people of these age groups coming up through, going to high school, going out of high school, entering the labor force if they choose to do so. Entering college, if they choose to do so. That number over the next several years, it's going to go up a little bit and then it's going to start to go on a very steady decline. And then after around seven to 10 years, it's going to fall off of a cliff.
So you can see over the past decade, the zero to four age group had a 7% decline, which is the largest decline of all of our age groups. So we know that what is coming is this. So if we think about this labor force participation rate of around 36%, and we talk about how many of these people there are. So at any given year, especially in the next five to seven to 10 years, You're going to see somewhere around three and a half to four million people who are basically going to hit the age to enter the labor force, but only a third of them do, only about 1.5 million of them do.
So if we think about that, and you think about the fact that according to the projections office, the food industry alone, like fast food and such, is projected to hire 1.2 million people every single year. Then you start to do this math and go, whoa, wait a minute. You're saying there's only going to be 1.5 million people out there coming into this labor force at any given time, and one industry alone would need pretty much all of them. We haven't even mentioned anything else.
These are the kind of numbers that you have to start to think through as we look forward through the next decade. So one of the things we talked about in Bridging the Gap, the last article, was in 2034, you're going to have more older adults than children for the first time in US history.
So I see a lot of people trying to take things that are happening in our economy right now, and they're trying to compare them to past times, past recessions, all kinds of events. It doesn't work anymore because we've never had a situation where we've been this upside down in our labor force, and this is only going to intensify as time goes on.
So as we look at this, as we see labor force participation not recovering, as we know we're running out of younger people, as we see immigration dropping, then we start to come up with this dilemma of who's actually going to do the work that makes society function. And that was the intent of the survey that we sent out.
From that survey, when we start to look at, and I mentioned this earlier, let's look at our labor force growth that we're starting to see what we're projecting in this decade to 2030. So it's interesting to look at this and you can go back and trace the boomers as they were coming through the population.
So when the boomers were late teens to early twenties in the 1970s, 1980s, they were the predominant part of our labor force growth. Now they're starting to get up into that 25 to 64 range in the eighties and nineties. This was the yuppie generation. These were all the hippies from the sixties. They are all part of our labor force growth then.
Then they're getting a little bit older in the 1990s, start to see, the growth is a little bit smaller because they're moving through the population. We're going to fast forward to where we are now. So we're currently 2022, up till 2030. The vast majority of our labor force growth and our projected labor force growth is of people over the age of 65.
That is the largest one. That's that light gray thing. Then our second largest bucket is people 25 to 64, the tail end of the boomers, and then the extras passing through. And as you can see in the negative, because this goes to zero, our negative labor force growth is going to be people 16 to 24 years old.
So we're going to see a decline in our labor force of people 16 to 24 years old. Now, as I already mentioned in the earlier slide, we see that a lot of the jobs that we generate in our country do not require a college diploma. They don't even require an associate's degree. In fact, if you look at the current makeup of our economy, the vast majority of jobs only require a high school diploma or no formal education whatsoever. And then you can see the bachelor's degree is here. And it does represent a decent amount, but by far the biggest needs that we have in this country do not require a bachelor's degree or higher. And you can see that they're projecting the most growth to occur in things like master's and doctoral degrees.
But you're talking about percentages that are based on extremely small numbers. So these will never be coming close to the amount of need that our country needs to survive in these kinds of lower skilled jobs. So, if we think about this in terms of skilled trades, let's talk about that high school diploma job up to that kind of associate's degree job.
68% of employers in the skilled trades said they could not, or are really struggling to find skilled workers. In the past year, 35% consider themselves extremely understaffed. And the problem is, as we talk about in the paper, one in four skilled trades workers are due to retire within the next 10 years. So they're all in striking distance of their retirement age.
And another problem that we're seeing here is even the military, they're feeling this as well. And when you think of skilled trades, you really do need to include military in that, because that's the same type of person and they're not hitting any of their recruiting goals.
All of these people are struggling to find people. Why? Because, as I said before, they simply don't exist. We're trying to find people that were never born, that we don't have in this country. So this is the dilemma that we're running into. So if this is the case now as we start to go forward, then we really need to start to think about how we are going to get people to do these jobs?
And these skilled trades jobs are so much broader than what you think. I think a lot of people think skilled trades and they go, you're talking about electricians or people who hang drywall or carpenters and things. But you have to understand engineering technicians, legal professions, literally tons of medical professions that aren't in the four degree route. People who just help out in hospitals, it literally goes on and on. You can find occupations in every sector of our economy that are looking for this person, and these are the people that literally keep these buildings open and functioning so that the other people can do their jobs as well.
So let's dive into this. Why is it that we have such a bachelor's degree focused young society? And I think a lot of people already know why, but I'm just, let's just talk through it and let's see what we found out. So we ask these kids, what did they feel? Did they get peer pressure? Did they get societal pressure? Are they feeling family pressure to pursue a bachelor's degree? And we all know, and a lot of people on this call, if you've had children, I'm sure you've said at some point like, look, I didn't do all of this so you could not go to college. And we've been telling people that for about two decades and the message got through because a lot of kids do pursue that degree now. We did get some people, a quarter, one out of every four said, definitely they do feel this pressure.
Another quarter or so said they do feel pressure, so maybe not a resounding amount of pressure, but they do feel pressure. But these numbers add up to about 50%. So one out of every two kids feels a pressure to go to a four year program. So that's a pretty ominous start to what we have. And then we find out some things about this.
What are the things that are motivating you towards this? And there's a lot of kids who go, look man, my friends, my siblings have all gone to school and I want the same experience. So we ask them, and this is a crazy way to word this question, but we were going after something very specific.
Literally the question says, is going to college as much about the experience as it is even getting the degree? And we got an overwhelming response that said, absolutely. I want to go to college because I want that experience of going to college. About two-thirds of our respondents said they can agree with that, with a quarter saying they strongly agree with that.
This is an important data point. We're going to bring this back later when we start to talk about solutions. But we have so many young people that want that coming of age experience in a college setting. So we can't dismiss this. They've watched a lot of people go through it and they want to personally experience that for themselves.
Now let's switch this over and say, how do they perceive these kinds of non-four year degree jobs? What do they think about those types of jobs? And you can see that there's about a third look, I don't really have a concern with that, I could see myself potentially doing that. But there's still about a third of people who will say, look, I just don't think that's a good job. Like it's not something I'd want to pursue. I don't see that as something that would be a viable use of my investing my career because there's a lot of people who say, I'm just not interested in those types of jobs. People saying that, they don't, there's factors about earnings, there's factors about what they see these jobs being that they're just like, look, I don't see myself there.
And you can even see things like prestige. There's about one out of every five of our respondents as, I don't think that society even values these people. I don't think that people look at these people and look up to them. It's quite the opposite, and we're going to talk about that towards the end as well.
Another thing that we are really going to have to start to address when we ask these kids, what do you think about careers in construction or manufacturing, logistics, agriculture, what are your primary concerns? Not a surprise, but nearly half said these jobs are hard. They require physical labor, which is interesting. We always talk about the fact that there's like a CrossFit gym on every corner, but for some reason the concept of working on a physical job is a little overwhelming.
This perception of that, that people are like, I want to be in an office setting, about a third of our respondents saying, I would like to be in an office setting. I don't want to be outside, I don't want to be doing this kind of physical labor. There's a certain element of people say, I just don't think I know enough about the job, so I'm just unfamiliar. Definitely some people just outright say, I don't like it. Some people say the pay is not that great.
And of course, perception like we were just talking about on the previous slide. When we ask them, okay so you have your own personal opinion about these types of things, but what do you think about these jobs? And we do find out that a lot of these students say yeah, I mean I think there's demand. 73% of these people are like, yeah, I've heard that there's a big demand for skilled trades. Like I've heard, this is a problem in our society and that people can make good money on this. So the overwhelming perception from these younger students was that they do see that society desperately needs them. But yet, as we saw in the earlier slides, they don't see themselves going into that.
And we have this pervasive mindset in the US of that's for somebody else to do that work. I want to do this, I'm going to pursue this, or I want my children to pursue this as far as who's going to take care of my children, as they have these certain things that's going to be other people's children, but it's not going to be mine.
We have this perception of somebody's going to fill these roles, but it's not going to be me. This is where, once again, we start to get to a simple math equation. We find out that it doesn't really solve itself very well. There's numbers I could throw out that really are startling.
I had jotted a couple of 'em down. Every single year, construction skilled trades needs 550,000 people. They want to hire that every single year, and that includes 80,000 electricians, 91,000 carpenters. Things like maintenance and repair, so fixing machinery, fixing planes, fixing cars. They want to hire about 628,000 people a year.
So I'm already up to about 1.1 million that they want to hire every year. Remember I told you, we get about 1.5 million in a given year. We need about 626,000 cooks every year to make our food. The police and fire departments need about 421,000 people. They're projected to hire 421,000 people every year ‘til 2030. The police and fire departments, just to provide minimum amounts of protection, that's the numbers that they need to hire.
Medical assistance, 123,000 a year they need to hire. Engineering techs, legal support, 58,000 a year. It goes on and on and on. So even in the IT industry, network support technicians, 75,000 of those they need a year.
You can see that as you start to add those numbers together, what you arrive at are millions and millions of requests of needs for people to fill these jobs. But we have a very small number, as I said, about 1.5 million in total that will enter the labor force and only about one out of every, one out of every 10, two out of every 10, three out of every 10, not intending to pursue a four year degree when they're in those younger ages.
We have really created an incredible dilemma over the next decade about how this is going to work. So let's talk about what we can do to try to address these problems.
Number one, and I see this everywhere, is when you are in the skilled trades or you have those kinds of jobs, you specialize in doing that - you're not a marketing person. You don't come up with advertising campaigns. You don't even have a marketing staff. It's usually just you or a couple people in your company. People don’t do a really good job of getting their message out to people to tell them things about the job that are actually very beneficial things. The compensation that you can get for the amount of experience that you have, or how quickly you can start to make good money in some of these jobs. Career progression - the fact that you could be owning your own business in a couple years. You could be 20 years old and owning your own business. I hear stories of that every time that I speak.
These things are all available to people who go into the skilled trades, go through these schools at 18 to 19 years old and enter society, how quickly they're empowered to do these things. The value to society, and we talk about this in the paper. You are looking at, we have a young generation, Gen Z, who's all about this, providing value to society. But the value to society that we get, if you're able to restore the air conditioning to a young woman's house who's trying to raise their children and they lost their power. They lost their air conditioning unit, and you're able to fix that and restore that. The value is incredible of what we can add through these particular jobs, but we don't do a very good job of marketing these jobs to society.
And then, I already talked about the ownership part. So I was just talking about these things. The whole route in skilled trades is designed to get you quicker to this, we'll call it adulting aspect. So the concept of ownership, the concept of personal investment is so much faster in a skilled trades job or in these other types of jobs that we're talking about versus what we have seen, just overall.
And I, in no means, am trying to diminish college degrees, but what I'm trying to say is we have this problem where we've stratified these jobs and we're missing the fact that these jobs have such an importance, but also actually pay pretty well as well. So we do know that more awareness is key.
Twenty percent, like we mentioned earlier, don't feel like society even values the occupations. Twenty percent sounds like a little, but that's one in every five high school students just doesn't feel like people really even care about these jobs. And then we have about 20% that don't know enough about them.
So this is from an article I just pulled, and this is what Gen Zs say that they value in a job. So let's think about the marketing problem that I already mentioned. Okay. This is what Gen Zs say they want in a job. They want better work-life balance. Fifty-six percent said they would leave their job if it interfered with their personal lives. So they need that kind of ownership, the ability to have a schedule that's a little bit more flexible.
Forty-two percent of Gen Zers said they'd rather be at a company that gives them a sense of purpose than one that pays more. Sometimes we go ah well, I bet maybe, I don't know. But the reality is, we see this a lot more with Gen Zs than we saw in previous generations. They want something that contributes to society. I want to make this as a quote from one of them. I want to make a difference before I want to make money.
Sixty-two percent of Gen Z plans to start their own business in the future. We've already talked about skilled trades. There's no quicker route to owning your own business, to having control over your life, than in the skilled trades. Not possible in so many of these other things until you've invested 10, 15 years in building up a career. But in skilled trades, you can get there so much more quickly.
Another one, I want to know what's expected of me at work. It's hard to get any clearer than that when you're in the skilled trades part.
Then the mission or purpose of my company makes me feel my job is important. And I think when we start to look at the mission and purpose of so many things in healthcare, in construction, these jobs that repair your cars and all of these things, that mission is so clear. The value that you have is so incredible.
People go to foreign countries and help them out in doing these things with the trades that they've learned. Your ability to serve others is really off the charts. We just don't capture that, and we haven't captured that for a couple decades now.
So another part that we want to talk about is, we've already mentioned this kind of coming of age aspect of this. So let's talk about this aspect when it comes to employers. The vast majority of our respondents said, would you go to a college, would you go to a school, that was more likely to get you a job or an apprenticeship or an internship with a company that you value? And this was really crazy.
Ninety-seven percent of our respondents said they would be more likely to go to a school that could get them an apprenticeship or an internship in a company that they value. When I was growing up or came through college in the late eighties and early nineties, no one even talked about this. We didn't even talk about companies or going into companies at that time.
You were going to college to go to college. When you got out of college, you'd figure out what was happening after that. We do see this overwhelming majority saying that is a big driver. So if that is the case and you are an employer, number one, you need to figure out what it is, who is it? Who do they value? What companies do they value, and why do they value them? Because if you're trying to sell yourself to young people, then you need to know what it is that they're looking at and going, I want to be at a place that's going to put me in someplace that I value. Okay, great. I need to learn about that. Tell me what you value. Tell me what you're trying to do, and then mold your message. Get that message through that it works with that audience. So if this is what they want, figure out a way of getting your message in front of them. And then do that at younger ages than you ever thought before.
You have to start talking to people in middle school and junior high. You've got to start talking to people maybe in sixth grade and just start showing them what the job's like. Get them on the work site, let them do a tour of what you do while they're still young. Let's put them in the job, let them see what it's like and then stay with them. Don't give up on them. Stay with them all the way through graduation because what happens is, a lot of young people are saying, I could do that. I could see myself in the skilled trades. And then they get to their senior year of high school and all of their friends are like, “Hey, what school are you going to? What major do you have?” And they're like I was actually going to go do this. And all of a sudden, the thing that they were sure to do over the past three to four years goes away and in an instant they're now enrolling at college. So you've lost that message. So you've got to stay with people the whole way through the experience, if this is a way of keeping them close to you.
The last thing I want to talk about on this side of the solutions part is as a society, we are going about this all wrong. And that is, we keep trying to cram everybody into the same pathway. First off, we need an organic approach. Young people need to be encouraged to pursue whatever path they think is best, and they need to be shown every path.
We don't need every guidance counselor in the country telling all the students, “Hey, you're not lined up to go to get your four year degree. You know what, you're not in enough advanced classes, you're not going to be able to get that four year degree.” Everybody, you can always go on and get your four year degree at any point in your life.
What we need is for people to present all of the options and talk about the value of all jobs. And we've never done this in our history because we had such a push to produce college graduates and now we need a push to keep people distributed. Like I said, we don't want to discourage people from college, but on the same hand, we have to understand that we've got to service all of the needs of our society.
So we want to take guilt and pressure out of the equation. If there's a perception out there that people don't value these jobs, that needs to be taken away. And if you have children and they say they want to pursue these things, by all means, support them, show them the path. Talk about the trade schools. Try to talk to companies in the area about who they could intern with or who they can apprentice with. Like helping your children to find these pathways versus outright discouraging them because you'd be shocked to see how much pay levels are increasing.
Especially this year in this acute labor shortage, we're starting to see significant gains in these wages. These are viable options for people and they need to be encouraged to do that. And just that idea that I've already mentioned, which is that career diversity matters. Everybody, parents, guidance counselors, all of society needs to start to watch the message that they're sending out to young people to say, look, only one thing matters, I want to see everybody getting that four year degree. If we do that, understand that there's no one left to install power in your house or to pick up your garbage or to work in the police or fire departments, or to build you anything, or to take care of your aging parents if they need nursing care.
So many of these jobs are the ones that keep society functioning, so we have to be very careful about the way that we phrase these things. We have to be very aware of how we reward them and the kind of levels we pay. And what do we expect to pay for someone who repairs a car or expect to pay for someone who's doing a service for us? These numbers are going to start costing a lot more because they should. That's now going to be a shortage on the lower end side.
So how can our data help? First off, if you are hiring skilled trades or you are in this industry, or you're trying to do any of these things, I've already mentioned the marketing problem.
One of the things is you need the data to build your story. So talking about demand, talking about tracking our job postings numbers and how they're trending, showing people the overall demand, showing how wages have been going up, comparing those wages, choose different occupations, hold your wages against a lot of occupations that people come out of college and take with degrees that maybe not, maybe aren't really highly valued in society.
Find your comparison points so that when you go to create your slicks, what you're going to show to a high school student, or when you get in front of these people and you get a present to them. What are you going to tell them that sounds really impressive about what you have and the promise of where they're going? And the kind of compensation, how it compares? All of those things you can get from our data.
If you're trying to build a recruiting strategy, where do these people live? What zip codes are they in? Where are these people at? What trade schools exist in your area? How many do you have in your market? What are kids going to be hoping they get paid?
Maybe you're still sitting there thinking, I can do an electrician apprentice for $14 an hour. It's no longer realistic. People are paying a lot more than that, so you have to start pricing your products accordingly so that you can pay people accordingly as they're coming up through. This is where a lot of people get it wrong.
They say, I can't pay this without going, not until I adjust this front end price. And you can use the data to kind of see if this is what my input costs, point number three, if this is what my input costs are going to look like going forward. If I want to build a viable, skilled trades part of my company, or I am a skilled trades business, then I need to understand what it's going to take? What are people expecting to be paid? I've got to put out their competitive wage. And if you're thinking I can't do that right now. Yeah, we all understand that, but you're going to have to start pricing so that you can do it and understand that your competitors and everybody else is in the same bucket that you're in.
So this fear of raising wages changes when you start to realize, look, I can't get anything out the door unless I pay a lot more. And I know my competitors don't have access to a magical pool of really cheap workers. Okay? Everybody's fighting for the same people no matter where you are. So that's one part of it, your input costs.
And then ultimately, you can see who's hiring, who’s hiring what kind of professions and things like that. And that can even help you to understand like I sell these particular services, and the people that I sell these to, the companies that I sell these to, typically employ these kinds of people. So I need to see what these companies are hiring. You can see that inside of our data.
These are the occupations they're putting postings out for, meaning they're probably doing this kind of work. I didn't even know that company did that kind of work. Now my services start to matter to a company like that.
So what I have is the QR code for the article of Who is Going to do the Work and you can scan that and download that article. And as it is right now, I'm going to turn this over to questions and Chayce is going to jump back in, but thank you for your time.
Chayce Kowalski:
Thanks for that, Ron. That was awesome to listen to. We did have a few questions come in. The first one is referencing the ECMC study. I think it was on a slide, I want to say it was three, I believe. Yeah. And they were asking if it was published in 2021 or if it was conducted in 2021?
Ron Hetrick:
Yeah, it was conducted in the summer of ‘21.
Now, personally, I think in the article Who is Going to do the Work, we leveled a bit of criticism at that study just because in 2021 there was still a lot of virtual being done. And so when you start to talk about perception, people are still equating the value of the degree to the fact that they would have to do that potentially online.
So we believe that the numbers in 2020 and 2021 were pretty distorted. We think surveys are done now in 2022, 2023 going forward, will probably be a little bit more of an accurate picture versus what we just saw at that time, but it's hard to prove those things. But we do believe there may have been some timing issues with that study.
Chayce Kowalski:
Gotcha. That makes sense. Another question for you. Do you think that pay transparency is supposed to be in place in some states, some of the acts that are taking place early next year, do you think that's going to impact the labor force participation rate at all?
Ron Hetrick:
It's interesting, only recently I was involved in a certain state.
I've been working on their commission for increasing labor force participation, and they did a study that they had conducted. And it was interesting because up to this point, we haven't seen this data. But it was interesting to see a number of people saying that they weren't working right now because of compensation, they wanted higher compensation.
It's an interesting thing to say I'm not working because I haven't found a job that pays well enough. Okay, but you're making nothing. So nothing, a dollar is more than zero. But what you start to get in that impression is there's a lot of people who simply don't have to work. But if the price is right, then they will work.
So I think it's changed my perception since I've seen that data. I now believe that it will help people to maybe consider jobs that they'll now see. You know what, I never thought that job paid enough, but now that I see what it pays, you know what, maybe I will do that. I will apply for that.
So I think it actually might help, the degree of which? I just don't know. But I, like I said, I've changed my mind on that whole thought based on what I've seen in that study.
Chayce Kowalski:
Yeah. As always, we reserve the right to be wrong. Last question for you. With the significant increase in company revenue, following your LinkedIn, I know that you posted on this a few times and the significant lack of talent and the excessive job openings. Do you think we're going to see more mergers and acquisitions in 2023 even though we might be in the midst of a possible recession?
Ron Hetrick:
It's a pure speculative answer that I can give you.
My belief is yes. I believe that we were talking before the call, internally, we were talking about what needs to happen if I hope people understand. I haven't given you all the numbers. I'm looking at every year industries that are going to try to hire about four or five million people and there's simply, we're not going to have those people around.
So you start to go, one of two things has to happen. One, they're going to continue in this vicious price war, which I already believe that's kind of waning right now. I think people are starting to hit their limits as to what they think they can pay. And they're either learning how to accept less business and promise less to their customers. All these kinds of things are starting to factor in because people always adapt their behavior. So I think that's one thing.
The other thing that I think starts to happen is, and I always use this just because, and it's an example, don't take it personally if you're in these industries. When you go down the street of a town and nine burger joints on the street of that town, you need nine burger joints on the street of that town. And I think you start to look at industries that are really trying to employ the exact same person, producing the exact same product. And I think they would be so much better off to consolidate that down, build a much more labor efficient model, versus competing for the same person and driving the pay into the stratosphere and always having their stores understaffed so that the workers that they have all want to quit. All you do when you're understaffed is encourage people to quit. We see that in healthcare right now.
So I think that we need to see some of these things getting addressed going forward, and I think it's accomplished best in mergers and acquisitions. But here's the problem. A lot of people have money. A lot of companies have money. So do you want to be acquired when you are looking at a cash heavy position? That's not necessarily enticing. Usually acquisitions occur because somebody is that weak gazelle, it's an easy pickoff target. Yes, they're making money, but they're not performing well. And I think that this is, it's going to be interesting to watch this play out.
I hope that there is more, but I don't know if anybody's really in those dire states where they're looking to be bought out to that degree, I guess we'll find out.
Chayce Kowalski:
Yeah. Yeah. Excited to dive deeper into this report. I know we're running out of time here, so I think we're going to look at ending a little bit early.
I don't see any other questions in the chat. If you liked the content, definitely check out the article. I believe there was a link put in that chat. On another note, if you have questions around recruitment strategy, market selection, or how to utilize our platform, reach out to your account managers and we can help you dive deeper into the platform and start to create what that can look like for a market specific to you and your company. So that's going to be it for me. If you have any questions, feel free to send me an email. If you're my client, I'm expecting it.