Equipment Labor Shortage Challenges and Solutions for 2024
Equipment Labor Shortage Challenges and Solutions for 2024
Guest writer Greg Grady writes today about the new year just around the corner in “Equipment Labor Shortage Challenges and Solutions for 2024.”
Finding out how technology, including automation, can help address heavy equipment workforce shortages in 2024 and beyond.
In 2024, the heavy equipment rental and dealership industry will face an unprecedented challenge in sourcing, hiring, and retaining qualified personnel. For the past few years, businesses across the sector have been grappling with an alarming workforce shortage, and as part of the equipment business industry, we have witnessed firsthand the impact this shortage has on the market.
This shortage of skilled labor has far-reaching implications, affecting everything from equipment servicing to customer satisfaction. However, amidst these challenges, there is a beacon of hope in technology.
A Labor Crisis in the Heavy Equipment Industry
To understand the gravity of the situation, it’s critical to consider some recent statistics. According to the U.S. Department of Labor’s JOLTS report, nearly 4.3 million people quit their jobs in January 2022. The shockwaves from this massive voluntary turnover still reverberate in 2024, as the U.S. Chamber of Commerce reports that workforce participation remains below pre-pandemic levels. In fact, we are currently 1.5 million Americans short of the workforce that existed pre-Covid back in February 2020.
Scarcity Impacts Equipment Businesses
The shortage of qualified workers has significantly impacted equipment businesses. The demand for construction and infrastructure projects has surged, but the workforce needed to support these initiatives is simply not keeping pace. Equipment service technicians, in particular, have become exceedingly challenging to source. This specialized role requires a unique skill set that combines mechanical knowledge with executive function, creativity, customer service, and physical agility.
The Quest for Tomorrow’s Workers
Organizations like the American Rental Association have taken steps to address this issue, developing certifications, events, and educational initiatives to cultivate the workforce of tomorrow. While these efforts are commendable, there still exists a shortfall of skilled personnel in the industry today that must be managed.
Embracing Technology to Bridge the Gap
The answer to the equipment business labor shortage lies in technology, specifically automation. Many businesses are now deploying technology solutions to digitize their paper-based processes. This digital transformation is helping to streamline operations, reduce errors, and improve overall efficiency, all while requiring fewer full-time equivalent (FTE) hours.
Automation to the Rescue
One significant advantage of technology adoption is process improvement and automation, which allows equipment businesses to reduce the human FTE hours required for specific tasks. For example, automating the sales activity in the quote-to-order process can significantly streamline the quote-to-cash timeline while eliminating data entry errors. Ultimately, digital transformation creates “sticky” customers and reduces churn which industry analysts, including Associated Equipment Distributors (AED), estimate to be roughly 60 percent on average for equipment dealers and rental companies each year.
The Synergy of Education and Technology
By combining workforce education efforts with technology integration, equipment organizations can refine their business processes to weather the labor shortage storm. Skilled technicians, even if scarce, can become exponentially more productive when armed with the right digital tools. These tools not only help them perform their roles more efficiently but also make the work environment more attractive to potential employees.
Going Forward with the Right Solutions
The heavy equipment industry’s workforce shortage is a challenge that cannot be underestimated. However, by leveraging technology and a commitment to ongoing workforce education, businesses in this sector can address the crisis head-on. The synergy of these two elements can bridge the gap between the demand for skilled labor and its availability, ultimately propelling the industry forward into a more prosperous and sustainable future.
About Greg Grady
Greg Grady is the Chief Revenue Officer (CRO) at Texada Software, a leader in equipment business management, delivering SaaS and mobile applications for equipment dealerships and rental companies. Learn more about Texada Software at http://www.texadasoftware.com.