Diversity, equity and inclusion offers a possible solution to the ongoing labor shortage affecting the equipment industry.
The labor shortage in the equipment industry is a growing concern for several sectors. With the changes in the labor market over the past 10 years, the Associate of Equipment Manufacturers (AEM) sees some industry sectors playing catch up to fix their talent pipeline and add employees.
“We have industry sectors that I think have not been as forward-thinking [as] 10 years ago about how we intentionally build that talent pipeline,” Julie Davis, senior director of workforce and industry initiatives at AEM, told Equipment Finance News. “Now we’re behind the eight ball in talking about industry perception, talking about what the current state of our industry is, what the needs are and what it’s like to work in our industry.”
The equipment industry is marked by a shrinking labor force, with the labor force participation rate at 62.6% in March, down 70 basis points since the February 2020 pre-pandemic benchmark, according to the U.S. Bureau of Labor Statistics (BLS).
The decline in participation comes as construction job openings increased, according to the bureau. Job openings in the construction industry increased 45.6% to 412,000 and the number of job openings in the manufacturing of durable goods industry increased 2.8% to 475,000, according to the BLS.
Play in all the talent pools
While autonomous vehicles and workforce development represent two potential solutions to the situation, Davis sees DEI as another opportunity area for fixing the current labor issues, especially when it comes to female inclusion.
“As we look at how do we fill this [labor shortage], there has to be some real intentionality about how we change who we are [and] what we look like as an industry sector, into an industry sector that looks much more like the workforce that we’re drawing from,” Davis said. “Women are 47% of the national workforce, but they only represented 29% of the manufacturing workforce, and even less than that in the construction workforce,” Davis added, referencing a survey from the Manufacturing Institute and Deloitte.
Equipment companies can also turn to unemployment data to focus the search on different demographic talent pools, Davis said. For example, the unemployment rate for white workers in March 2023 was 3.2%, which has been mostly consistent over the past year, while the unemployment rate for Hispanic or Latino workers was 4.6%, and the unemployment rate for Black or African American workers was 5%, according to the BLS.
The “second-chance citizen population” or previously incarcerated citizens, can also be mined for talent, Davis said. “Part of the conversation [that] is necessary for our industry sectors is this second-chance citizen population, where the unemployment rate for formerly incarcerated is at least 30% or more, so that is the largest underutilized talent pool in the United States.
“The play here is that you have to play in every one of those pools; you have to be connected to education; you have to do apprenticeship programs; you need to be connected with your regional government, governing organizations, like your workforce development boards, and your American job centers,” Davis said. “There is no one thing that you can do here that is going to supply you with the talent pool that you’re needing.”