Addressing the labor shortage with on-demand labor

By Steve Salmon, VP of Business Development

You don’t need to be a service provider to feel the effects of the labor shortage. It’s palpable everywhere – from child care to food services to healthcare. This past holiday season, it even chipped away at the Christmas spirit by causing a shortage of Santa impersonators. 

Service organizations that rely on skilled technicians are feeling the effects of this labor crunch in uniquely painful ways. This is because the shortage of these technicians is linked to dynamics that existed long before the pandemic and will continue to exist long after other industries have recovered. Getting to the roots of this technician shortage is a necessary first step in formulating a solution that can 1) resolve the problem, and 2) set service organizations up for lasting success in a changing labor landscape.

What does this mean for the industry? How, exactly, should service leaders respond? This paper answers these questions.

A multifaceted problem

For years, the “silver tsunami” has loomed over the field service industry. A substantial portion of the workers who specialize in installing and repairing equipment on-site entered the industry 15 to 30 years ago, at the height of the technological boom.

Now, those field service technicians are aging out of the workforce. 46% of North American field techs are over 50 years old. This means that technicians leaving the full-time workforce in droves (with few entrants to take their place) was, to some extent, an inevitability. To make matters worse, new workers have only a fraction of the skills and breadth of knowledge as the workers leaving the workforce. For many companies, this means that every exiting worker requires 3-4 new workers to cover the skill gap created.

COVID exacerbated this trend. After companies were forced to lay off many of their field workers, a substantial portion simply decided to not come back. Technicians were tired of the job’s travel and physical demands. For some, COVID was the perfect pretext for an early retirement or a later-in-life career pivot.

This problem is especially painful given that the demand for on-site IT service has never been higher. The search volume for “field service technician” is the highest it’s been in 20 years.

Ironically, this demand is directly linked to the labor shortage. Persistent difficulty staffing their stores has led many retailers to accelerate the incorporation of technology into their customer service infrastructure. Think about how many self-service checkouts you’ve seen crop up over the past year.

The retail industry is also experiencing an increase in store openings. Favorable commercial real estate trends, combined with a boost in what landlords are willing to accommodate, have led to the highest store-opening rate in several years. These trends are also incentivizing leading companies to experiment with new store formats, which means this rise in store openings is coupled with a boom of store refreshes.

Taken together, these factors are creating unprecedented opportunities for companies who offer services to retailers, particularly those that can install self-service equipment, wirelessly connected equipment, and the expanded networking and cabling infrastructure necessary for supporting these devices.

Unfortunately, this explosion in demand is complicated by an anemic, difficult-to-manage supply chain. There is perhaps no better illustration of this gap between supply and demand than the nearly 40,000 “field service technician” job openings currently languishing on Indeed.

It’s an intensely frustrating situation, one that feels as though there is no way forward. This, however, is not true.

A future-ready solution

Networks of on-demand labor offer service companies a way to respond to the heightened need for skilled IT labor in a changing landscape.

By leveraging on-demand talent, companies gain the flexibility to match talent with demand and develop enduring relationships with experienced technicians they can trust. For service organizations that understand the value of an on-demand workforce, this is a period of great opportunity.

Networks of on-demand labor offer service companies a way to respond to the heightened need for skilled IT labor in a changing landscape.

The nature of IT work has always lent itself to a multiple-engagement model. Technicians want to work on their own terms and take on jobs that match their skill level and area of expertise, which is why many have gravitated toward independent contracting. Many of the technicians on Field Nation have worked independently for 10+ years on our platform or directly with other companies alongside full-time jobs.

Now that changing labor conditions have led many technicians out of the full-time workforce, we’re seeing that many are continuing to operate as independent contractors or partner with others to create their own service businesses.

While many service companies are struggling to find and retain qualified field service workers, on-site talent platforms like Field Nation are adding thousands of new workers each week.

The flexibility of working independently is attractive to these technicians, and service companies can reach them through on-site talent platforms designed to align the work they need done with appropriately skilled techs who are interested in working in an on-demand capacity. While many service companies are struggling to find and retain qualified field service workers, on-site talent platforms like Field Nation are adding thousands of new workers each week.

But here’s the thing: these technicians have more options than they did in previous labor environments. The high demand for their skillset allows them an increased level of discernment when it comes to choosing the companies they want to work with.

This means the companies that manage to attract on-demand workers will be the ones ready to invest in and adapt to the changing labor market.

The companies that manage to attract on-demand workers will be the ones ready to invest in and adapt to the changing labor market.

So what makes a company attractive? How does one become a Buyer of Choice?

First, they need to offer competitive pay that’s representative of the work being done. The simple truth is that, especially in the current labor market, success starts with pay.

Second, they need to have a purpose-fit vetting process in place that selects technicians based on both their experience and their soft skills (professionalism, problem-solving, etc.). This is not the same approach that has been used for vetting other types of workers.  By vetting for what they expect, service companies can create virtual pools of trusted talent and make smart use of the automation tools that come with on-site labor platforms to perform work at scale.

Lastly, they need to take a “clarity matters” approach to communicating expectations. This means being clear and concise about what they are asking for, the requirements of the work, and the escalation path a tech should take if something goes wrong.

Companies that get these things right have the best reputation with field technicians. Those technicians continue to do work with those companies and also promote the company to their own networks. We also see that these companies have the best outcomes – the highest first-time fix rates, lowest cost per work order, and the highest fill rates.

The labor shortage is not an insurmountable crisis. It’s an opportunity for service organizations to ramp up and expand their relationship with on-demand labor. It’s a chance to strengthen the operational core of their business with process enhancements that leverage the full potential of on-site talent platforms.