Is the tradie drought sucking you dry?

Ange
Hey, before we get into today’s show, Why don’t you guys come and meet Andy and I, Yes, in person at Lifestyle Trade Live this May.

Andy
There is a better way to run a trade business if you know the right structure and systems. So why don’t you register now by messaging LIVE to 0423 075 075. That’s 0423 075 075. Or head to lifestyletradie.com.au to get your ticket today.

Ange
Yeah, we’re coming to a capital city near you. This is an event for every trade business owner and their partners who want to change chaos to control, get back their time and make more profit.

Andy
Go on. You know, you deserve more freedom. Now, let’s get on with the episode Ange. Wherever you are listening in for today’s episode of The Tradie Show, a big hello and guess what? Hey, big hell yeah. If you’re new to the podcast, I’m Andy. And just a heads up, when I get pumped about something, I have a tendency to raise my voice.

Ange
And I’m Ange, the one with the calm voice of reason.

Andy
Yes. Well that’s true. And it’s come in bloody handy over the last 25 years we’ve been together. But in all seriousness though, today’s topic is a big one affecting lots of people. There’s a tradie drought in Australia. You know it. I know it. And the stats tell the story. I reckon it’s sucking you dry as a trade business owner.

Ange
Yeah, that’s right. It’s been a hot topic for a number of years now, hasn’t it? But the problem has skyrocketed to the point where there’s a shortage in every trade. There was this great podcast episode on this topic earlier in the year on a show called The Quickie, and if you haven’t heard of this Mamma M Network, you really should listen anyway. This episode was titled, Where Have All the Tradies Gone? And you know what? It was really good. I’ll leave a link in the show notes if you wanna have a listen.

Andy
Yeah, it unpacks some interesting facts about the reasons tradies are increasingly hard to find, and the impact on customers who have been left stranded in the middle of a residential build or renovation, boom! It’s been a bit of a shit show for everyone, including you, the trade business owner who’s been struggling to get staff on board. Today, we wanna talk about this topic, but with a twist. How did you, the trade business owner get here and the impact this is having on you? Then let’s chat about this situation from your perspective and share some strategies to help out both you and your customers. How’s that sound Ange?

Ange
Yeah, sounds great to me. So let’s do it. You can kick it off.

Andy
Okay, well, we all know the trade industry basically exploded largely due to the Australian Government’s Time Limited Home Builder program launched in mid 2020. You know, the intention was to boost the residential construction sector impacted by Covid by providing eligible owner occupiers, including first home buyers with a grant of $25,000 to build a new home or substantially renovate an existing home. The scheme was later extended to offer a grant of $15,000 and applications closed back in April in 2021.

Ange
Yeah, if I remember correctly, they were calling it a construction led Covid recovery. And this grant flooded the construction industry with work. There was a huge, huge number of people looking to build a house or to renovate thanks to these grants, but combine that with low interest rates at the time where the homeowner had the financial capacity to spend their money on their house, devastating natural disasters that needed immediate repair. And zero migration that meant no help was arriving to assist in the trades that we’re actually normally used to. There was clearly no thinking about the consequences to our supplies chain. Like, how in the heck is this work going to get done? Like, keep in mind it takes about 40 different trades to complete a home. Like seriously, what a pickle we’ve ended up in?

Andy
If the home builder boom created a huge demand for tradies who were also living through the nightmare of Covid lockdowns, along with material shortages, which has meant everyone is playing catch up. And did you know there were more than 137,000 applications for the home builder program?

Ange
Wow.

Andy
Directly supporting close to 375,000 full-time jobs with an estimated value of building work approximately 41.6 billion dollars. Guess what guys? That’s a shit ton of activity and that’s a shit ton of required tradies.

Ange
Yeah, my God. So here we are. Trade business owners are caught between keeping customers happy when build times are spiraling outta control. And not being able to find skilled or licensed trades to complete the work. So with fewer tradies and demand for them, the qualified tradies who you employ are calling the shots on what they wanna get paid, which is driving up your costs and potentially driving down your profit margin. So understandably, you are exhausted by it all. You’ve been working ridiculously long hours for an extended period of time, and it doesn’t feel like there’s an end in sight. But there’s more to the tradies short story isn’t there, Andy?

Andy
For sure. And here’s the deal, and there are no real surprises here. We need more apprentices coming through the pipeline. And this has been an issue for years on years. The completion rate for apprenticeships currently hovers around 55%. Definitely not ideal. With TAFE cuts, that has certainly also taken a toll. The cost of living crisis is affecting us all as well. The wage of an apprentice is typically pretty low. So in saying that wages rise pretty fast once you’re a qualified tradie, you’ll find many tradies earning way more than any UNI graduates without that massive headache. You know, the workplace culture is another reason apprentices aren’t sticking around. You know, when you look at the research, males working in the construction sector are in one of the highest occupational risk groups for suicide, which is absolutely terrible.

Ange
Yeah. Wow. I’d also like to make the point that tradies make up over 30% of the workforce according to Safe Work Australia and currently women make up 3% of the trade workforce. The figure has barely barged in 20 years. If you’re all wondering where their scope for change is, it’s right here.

Andy
Definitely it’s about making trade a more attractive career path for everyone, including women. Admittedly, progress has been slow over the years. These are all issues that have been floating around for a really long time. Not everyone is cut out for UNI and not everyone wants to go to UNI. Personally, I could not think of anything worse than sitting at a desk all day. A big hell no for me. But it all comes back to this. There’s not enough tradies or contractors, and the workload is an absolute killer at the moment. You are trying to manage the customer’s expectations. You’re battling to get hardworking tradies on your team. I understand trade business owners, there’s a hell of a lot to handle at the moment.

Ange
Yeah. Our Lifestyle Tradie members are telling us some trade businesses are becoming so desperate for tradies. They’re offering upwards of $60 plus an hour, as well as benefits like a truck, phone, fuel cards, and more just to pull ’em in. It’s absolutely insane, but again, it’s simple economics, supply and demand, and right now qualified tradies are in high demand and there’s a short supply. They get to call the shots.

Andy
Yeah. But if you are open to taking on an apprentice, this could be a good solution for you. Yeah. Everyone does, we have our reservations about it. You know, what, if it doesn’t work out, what about if they quit? There isn’t enough time as it is, let alone investing your energy into an apprentice. No doubt it can be a gamble, but this is a long-term strategy to help build your team in these times.

Ange
Yeah, you know, if a young apprentice scares you, maybe a mature age apprentice is an option, that’s what we do with Dr. Drip. You know, looking at someone who’s already decided that this is the industry for me could actually be the solution. And for supporting your decision making. Then, check out the Australian Apprenticeship Support Network. It’s this government initiative with heaps of information for you. It’s a really great resource. I’ll include a link in the show notes. One thing I love about this is the level of detail, and as you know, I love detail.

Andy
Yes, yes. For the hell yeah, for me, yeah.

Ange
But it’s super easy to use and navigate. There’s this very specific stuff about things like how to set up an apprenticeship and is my business ready?

Andy
Look, hiring is one of the hardest parts of being a business owner. The home builder, boom, and all the things associated with it makes it even harder. Because there is an ongoing conversation with our Lifestyle Tradie member community, we created a guide on how to hire A-Grade staff. It’s absolutely free. It’s a downloadable guide with the step by step process that we used in Dr. Drip to hire our team. If you wanna copy head to lifestyletradie.com.au and click on free resources. There’ll also be a link in the show notes too.

Ange
So Andy, where does this leave our worn out trade business owners? Like what tips can we give them to lead with confidence and feel optimistic about the future? When A-grade tradies and contractors are increasingly rare and customers expect the world from you?

Andy
Yeah, communication is the key. You know, poor communication is frustrating, and when customers don’t know what’s happening, They definitely lose trust in you. You know, tradies a stereotype for not showing up on site when they say they will, not returning phone calls, not providing quotes. You know, you don’t wanna piss customers off ever, even if they sometimes piss you off. But be clear, be honest, be intentional in your communication with your customers. And if there’s a hold up on something and it’s not gonna pan out, just explain it to them. You know, if you can let them know how you’re planning to solve the problem.

Ange
Yeah, so another flow on effect of this shortage of tradies in the industry is many trade business owners are getting back on the tools to keep their customers happy. I know plenty of guys out there who’ve been off the tools for years working on the business in the office, who are now back working like 70 plus hours a week on the tools. They just don’t actually have a choice. Tons of work and no one to do it but them.

Andy
It’s a real shame because as the business owner, you should have the freedom to work how you wanna work and if that means you’ve grown the business to a point where you could be off the tools and taking the business those few steps further ahead, and now you are back on the tools. It’s a real step back, isn’t it? It means it’s harder to grow the business, which really is sad.

Ange
Yeah, it is and suddenly, if you’re back on the tools or you just don’t have a team to cover the workload, you are working weekends again too, I’m sure, and you know, this causes burnout.

Andy
Oh, that’s bang on Ange, because we’re really reluctant to take a few weeks off to go on holidays because two weeks of income to the business has actually gone, and more customers you’re letting down, and then burnout leads to more serious mental health issues as well.

Ange
Yeah, sounds bad. Hey, this brings us to the next tip, which is to look after yourself.

Andy
Yeah, definitely.

Ange
Take a power Morning routine, like take a break, even little ones. Be the best business owner and leader you can be. Just like when you’re on a plane, you know you need to give yourself oxygen first before you help others, that’s what they tell you, right? When they give you that little spiel, so we understand a two week holiday, maybe off the cards for some, but instead, maybe do something that will only maybe take like 30 minutes, but every day. So do something for your own mental fitness, like choose an activity you love doing. It could be going for a run, hitting the surf, taking the dog for a walk, whatever it is, you’ve just gotta schedule it in. And tell someone how you’re feeling, our mates at Gotcha4Life are so big on this message.

Andy
Yeah, they definitely are. And our next tip is to offset the impact of the tradies shortage is to hone in on your company culture. You know, make it appealing for tradies to want to work for you and stay long term. You know, your culture is all about the way people within your business generally behave in the thoughts and attitudes that your team displays in everyday situations in a less formal way. It’s all about the vibe in your business, you know, does your team feel supported and valued, which leads to collaboration and new ideas? Or do they fear making mistakes because perhaps you yell and scream? And this only leads to high employee turnover and a bad reputation.

Ange
So it’s not rocket science, right? If a tradie’s deciding between two roles, company culture is a huge part of it. It’s about crafting things like your vision statement. So at Dr. Drip, you might remember, Andy, our vision statement was, happy families, happy homes.

Andy
Yeah, true.

Ange
What do you believe in? You know, what do you wanna hang your hat on? How do you want your team to feel about your business, and how would you like them to describe it to others? This is a topic. Pretty much unto itself, but ultimately your culture has the power to attract great tradies.

Andy
Yeah, I’d say this is becoming more important than it’s ever been. And you know what Ange? The lucky last tip for today is don’t be complacent. I’ve talked to so many business owners and they have been complacent over the last six months, but guess what? This boom time will eventually ease up. So I wanna ask everyone out there are your processes set up to ensure you have a steady flow of ongoing work? You know, even I was talking to a tradie the other day in the maintenance style worked and all the systems like inspection reports on every job. He got so complacent he stopped doing them, and all of a sudden that flowed into his quote flow system and his quote flow system wasn’t filling up, and then all of a sudden his flow of his work slowed down and he’s in a bit of a dip and without the quote flow system to drive repeat customers time and time again. Guess what? You don’t have that additional work. You know, I heard a real great quote the other day that fits in well, here it goes. I always say complacency is the kiss of death and I can tell you a bucket of tradies out there have been extremely complacent over the last year.

Ange
Yeah, ouch. That’s so true. Right? So in wrapping up, Andy, we’ve covered some ground on the tradies shortage and put it into some context. So that said, what do you think the way of the future is?

Andy
My thoughts are that in the next couple of years, work is gonna start slowing down and it’ll take some pressure off Some of you out there, you know, everyone’s been running around like chickens with their head cut off. Crazy busy with heaps of work, but eventually we’ll get through the backlog and the workload won’t be so overwhelming. You know, we should be used to this boom and bust cycle in the trade industry, cuz we’ve been seeing it for years. But this one’s really knocked us sideways, which I hope triggers some changes in bringing in new tradies into the game.

Ange
Yeah, that’d be amazing. The discretionary stuff will slow down, I tend to agree, especially as interest rates rise, which they have been because people have, I guess, less money to spend on things like renovations or homes or even maybe that second bathroom in their house, right? Emergency work, like burst hot water systems or electrical issues within a home will always be there cuz they have to happen, whether or not there’s other bills to pay cuz it’s dangerous.

Andy
Yeah, right. I mean, I’ve had conversations with some of our members who are aware that this current pipeline of work is not gonna last forever, and they’re planning for change in the coming months. I’ve said to everyone, what’s happening in 2021 and 2022 is gonna be completely different in 2023 and 2024. But when I’d get down to the crux of things with them. There still will be plenty of work available and they’ll still be making profit. They’re just not slaving away anymore, which has been their normal.

Ange
Yeah, understandable. It’d be weird to suddenly be slowing down after a couple of years of chaos. So I guess off the back of that, Andy, what’s your advice?

Andy
Well, I won’t, don’t wanna be that bloke that is the conspiracy theorist, but while you’re still busy, I seriously urge you all start future proofing your business right now.

Ange
Yeah, actually we talked about this in a previous episode. It was called Spread Risk in Your Trade Business and Survive Anything because future proofing your business is all about minimizing and spreading your risk. The episode dropped on September 5th, I think 2022. And you know what? I really urge you to go back and listen to it if you haven’t already.

Andy
Just do it.

Ange
So before we go, tell us what’s on your mind at the moment on The Tradie Show discussion group. If you haven’t joined us there, it’s a private Facebook group just for us, the trade business owners. So what are some of the challenges you’re facing or maybe share some wins or even a funny story that happened to you on site this week. There’s a link in the show notes, or simply search for The Tradie Show on Facebook and ask to join. We’d love to have you there. Thanks for listening and catch you next week.

Andy
Subscribe to The Tradie Show, wherever you get your favorite podcast. Rate and write us a review or for more information about Lifestyle Tradie, head to lifestyletradie.com.au.