Last modified on April 25th, 2022
By Marc Frenkiel
We speak a lot about the staffing challenges facing the property management industry.
A recent NAA survey sponsored by AppFolio found that operational inefficiencies are the second greatest challenge to the property management industry, with finding high quality vendors as the top challenge within the category. Property owners and management companies are all too familiar with the growing difficulty in finding qualified, and quality, maintenance technicians.
We touched on this trend in a recent episode of The Top Floor. Paula Munger AVP of Industry Research & Analysis at NAA explains:
“We hear a lot from our members that finding maintenance techs is their toughest nut to crack. And it’s because younger people don’t necessarily want to work with their hands. That’s something they don’t find attractive. We see similar things in the construction industry.”
Why might this be? What’s shifted culturally that can explain this? In this article, we’ll dive into the state of the trades today. We’ll explore whether or not current staffing and retention challenges extend to the trades, the effect this might have on the property management industry, and what can be done to mitigate or reverse this.
To answer these questions and gain a better understanding of the current state of the trades, we’ll reference Angi’s 2021 Skilled Trades in America report.
Do current labor challenges extend to the trades?
The short answer is yes. After analyzing American Community Survey (ACS) Public Use Microdata and two Angi surveys of 2,400 skilled tradespeople, the consensus is clear: the labor shortage is real. The report finds that 77% of skilled tradespeople believe that there is a labor shortage in the skilled trades, which is an increase from the year before. In 2020, 71% of skilled tradespeople surveyed believed there was a labor shortage at the time. 56% of respondents said that COVID-19 has made hiring even more difficult.
And the impact of all this is palpable throughout the real estate and property management industry. Wait times are longer and prices are higher. Add on another layer of heightened demand due to the surge in home improvement projects (brought about by the shift to work-from-home), and many contractors won’t even bother coming out to bid a job for new business.
Why is it surprising that there is a labor shortage in the trades?
After all, earnings for skilled tradespeople top those of the general population. The Angi report analyzed the earnings of plumbers, electricians, and general contractors and found them to be 22%, 29%, and 53% higher than that of the general population, respectively. The labor shortage is also surprising because skilled tradespeople report high levels of job satisfaction: 83% of survey respondents reported as being either very satisfied or somewhat satisfied in their current line of work, with fewer than 1 in 20 reporting to be somewhat or very unsatisfied. What’s interesting is in the “why”: meaning and value in the work was reported to be the key factor impacting overall satisfaction, with 22% citing it as the main source of their happiness. Compensation only came in as the second most popular answer.
The labor shortage in the trades also comes as a surprise given the entrepreneurship opportunities that are present. 50% of those surveyed for the Angi report identified themselves as business owners or entrepreneurs. With enough experience and a good reputation, there are endless opportunities to own your own business – a growing phenomenon of late. In a recent Wharton Business Daily podcast, Wharton management professor Jacqueline Kirtley spoke about the fact that the over 4 million Americans quitting their jobs in August 2021 coincided with a surge in new, mostly sole-proprietor ventures business applications.
What can be done to help reverse the labor shortage in the trades?
59% of those surveyed for the Angi report agree that providing a clear pathway for women to enter the trades would be a solution, while 54% think deprioritizing university at the expense of trade school is another solution. Interestingly, in a 2017 article, Paul F. P. Pogue wrote that the elimination of shop and vocational classes from high school in the early 2000’s is a major factor in shortage of tradespeople today: “For many students, this was their first exposure to the kind of hands-on experience that could ignite a career in a trade.” He goes on to quote Dan Taddei, former Director of Education and Certification for the National Association of the Remodeling Industry, who says “Taking shop and mechanical classes out of school cut off the pipeline. The No Child Left Behind Program forced them to shut down all those things and focus on college.”
Another solution to the labor shortage in the trades: technology.
Like many, if not most other industries, COVID-19 accelerated the adoption of technology in the home services industry, which often lags other industries in this regard. According to the Angi report, in the last year:
- 21% of tradespeople adopted third-party financing tools
- 36% adopted virtual-meeting tools
- 39% added digital tools to generate quotes
- 42% adopted digital tools for planning
- 47% added digital payment solutions
If you’re a property owner or manager, there’s a good chance your vendors are using technology to make their operations more efficient — and their lives easier. To establish the most productive relationship with them, consider how your business uses technology. For example: Smart Maintenance is a powerful tool that uses AI to intake maintenance requests from residents and convert them into work orders for pre-approved vendors. Centralized communications allow you to communicate with your vendors via email and text from a single hub, keeping your entire communications history neat, organized, and accessible.
David Mehan, Chief Financial and Information Officer at San Francisco-based Structure Properties, attests to the impact that technology that prioritizes operational efficiency can have on the vendor-property management relationship:
“I can have a property manager call me from the road and say, ‘A vendor said he hasn’t gotten paid, and he’s wondering about the status of his check.’ I can look it up, see that he needs to approve it, and then send him a link to the invoice within AppFolio. The vendor can get that link from the mobile app, approve it, and I can pay. That’s now a two minute deal. Before, he would’ve had to go to his office, log into his software on a desktop computer, and approve the bill.”
The author of the Angi report makes a statement that we at AppFolio wholeheartedly agree with:
“What each one of these different forms of technology have in common is that they reduce friction… [and] free up time for more productive work (the actual improvement/maintenance of people’s homes)… While the pandemic offered a strong impetus for technological change, the impact could be long lasting, both because more modern tools will help dissuade potential attitudes about the skilled trades as not being up to date with the latest technology, as well as because they allow pros more time throughout the day, shifting their focus from administrative details to the productive work of maintaining and improving our homes.”
Comments by Marc Frenkiel