The Labor Shortage Isn't Your Biggest Hiring Problem

Welcome back to the show. I'm your host, Phil Risher, and on today's episode, we're discussing how to solve the skilled labor shortage and build a recruiting system that fuels growth for home service businesses. And my guest today is Aaron Winn. He is going to be talking to us about how the heck do we find good people to work at our companies. And I know this is a big issue. So Aaron, thanks so much for joining us today.

It's my absolute pleasure. I'm super excited to be here.

Yeah. So Aaron helps people find in the home service space, skilled labor is a specialty. Can you talk us through how you even figured this out and got to this point, Aaron?

Yeah. So just to give you a little bit of background, I am— at least since before I got married, I was the least mechanical individual on the planet. My dad did not teach me how to fix anything. Thanks to being married and YouTube, I've learned a lot. Yes. But before that, about a decade ago, I had a client that had tried everything and they had tried in-house recruiters, they had tried contingency groups, they had tried everything. And pretty much as kind of a Hail Mary, they said, hey, would you be willing to come in and look at this? And I said, I'd be happy to, but there are two things that I have to do before I can. One, I'm going to sit in your bullpen because I got to understand all the terminology for a week. And then I want to sit in the truck and go with the guys out in the field because I want to understand who that consumer is. See, we look at recruiting like it's a marketing function. Yeah. And so if we're going to penetrate this market, we have to know what they listen to, what they want to hear, what are the things that interest them to be able to join an organization. Yeah. After that, we created an avatar, and in this case, his name was Bruno. And Bruno helped the company grow from 35 members to today they're at about 185. And I thought that was great, happy to help the client, we're good. But their marketing company said we couldn't sell any more marketing to them because they didn't have the people to fill the orders.

Yes.

Since you did this for them, would you be willing to come and do this for our other clients? And so within about a 2-month period, we've picked up about 14 different home services trade clients. And ever since then, this has become our calling card. I have devoted my career to understanding skilled trades and manufacturing and the commercial sectors within skilled trades. And so that's why I'm really excited to talk with you today.

Yeah, so awesome. I love that. And, um, can you talk through a little bit about what's going on right now in the skilled trade profession? Um, like, where is the shift? Is it really like a shortage, or is it just that like people don't want to work and these guys don't want to get into the trades? Or like, what is it right now that you're seeing?

No, I appreciate it. So our organization, every year we do something that's called Workforce Crisis, um, and we try to give a projection about what the future year is going to look like, what you can expect. Uh, we've been very fortunate this year, we're starting to have conversations with labor economists. One of them was Ron Hetrick, who happened to be a labor economist that wrote The Rising Storm, if anybody's familiar with that. And one of the things that Ron had shared with us and that we have shared with our clients is that this is no longer a fix in the sense of that we just have to wait and then it's going to come back. We actually have a structural change in our country. 4 or 5 years ago when they wrote that paper originally, they recognized that there was going to be 500,000 jobs that were going to be left vacant because there's not enough people to actually fill it. Because of some decisions that we were making as a country, that number now by the end of the decade is closer to 2 million. There will be 2 million jobs that will be left vacant without anybody being able to fill them. And so those are choices that we're making, and we have our different reasons for it, and that's fine. But what's compounding it is that this year— in fact, I'm sorry, last year was the last graduating class that was bigger than the one before it. For the rest of our lifetimes, Phil, every high school graduating class will actually be smaller. Wow. And so, we're going to see a decrease in the next 6 years of about 13.5% of the population under the age of 65. Wow. And for those over the age of 65, we're going to see an increase of about 30%.

Oh.

And so, there's really no one to backfill. That's why this is now a structural change and not necessarily one that's cyclical that we've done in the past.

Got it. So basically what you're saying is that there is actually no fix to more bodies are coming and more people. It— the— and actually the, the pond might get even more smaller. And so as home service business owners, we need to have a much better system than just throwing something on Indeed or Craigslist to try to find employees because there's not warm bodies that are going to fog mirrors anymore and you need really good people. So Makes complete sense. Let's say, you know, someone has 10 technicians and they're trying to grow their business. They want to find more technicians. What would you say to them? Like maybe like, hey, you got to do this, this, this, and this. Do you have a system for that or how do you all work with them to help them?

No, that's a great question. And so there's always more than one way to try to attack a problem. And so much of it is based on that individual. But if I'm giving just kind of a general overview, We try to take a multi-pronged approach in the sense of, one, what's your story? You know, a lot of these folks that we're talking to, they don't have PPE dollars. Yeah. And so they can't outspend them. So really what they have to do is out-storytell them. And so telling the story about why your organization is a great place to work. Every owner I talk to, I tell them there are 3 main reasons why people leave. The first, you know, money that's on the table, that's always going to be there. And I can give you some information about that later. The second is they either can't— it's a quality of life problem and they can't get to Susie's recital or Timmy's ballgame. And the third, and I cannot stress this enough because the best recruiting tool is retention, it's their managers. And they just feel like, I've had enough of this guy or gal and I don't want to work here anymore. And so they look for other opportunities. What you should be doing as an owner is trying to answer what is the pain point of the person that I want to bring in, and then talk to them about why our management team is so strong to work for and what we do for our team, why our quality of life is right there at the top, and why you would want to work here. We understand you have a family and we want to support that. And then yes, we will be right there with you at the market when it comes to pay. In fact, at this point, pay is almost table stakes. If you're not being competitive with your pay, it's just going to become that much harder for you to be able to find the resources that you want.

Yes. Two things I want to hit on. One, right in the beginning, you said this is pretty much a marketing function, is attracting the right person. And how do you stand out? You tell your unique story and your vision and all of those things. And I would even go as far to say that with private equity, they kind of— it's hard for them to tell that story because they're not local to the community. And it's an advantage for a lot of these smaller guys to be able to articulate that. We had a guy, we had a client, they went from $3 million to $8 million and then sold to private equity and out of business in 2 years because it lost the soul of the business. And there's like a husband and wife team, like, like super sweet people. So I think that there's a big advantage for smaller guys even to compete, you know, with that. Now, I wanna, you mentioned about competitive pay and staying competitive. If someone is like, how do I know what's competitive? How do I know how I, how like do I stack up? Like, do I, like, how do you figure that out? And how do you know that you are competitive?

Yep. Makes sense. And I wanna answer the competitive pay and I realized I left something out that you'd asked about the marketing piece. Yeah. You tell your stories, make sure that you're doing this on your career page. Make sure that you are updating your Indeed brand pages. Look for the easy things to be able to tell your story. And then in terms of pay, this is the same place where you're doing that. Pay includes both your benefits. Pay includes making sure that you're comparing. I mean, one of the best, easiest ways for employers to do this is look at job postings. What are your competitors offering? You know, what is it that they're sharing that you should be going, okay, I need to at least keep up with that and also share with them what are the little things that you do that make you different. Are different. I had one client where he took his team out for a hunting trip once a year. That's a real benefit.

Yes.

That's part of pay. And then in terms of actually understanding dollar for dollar, besides the job postings that you can see out there, and sometimes those can be a little skewed, you partner with a group like us who can give you salary information that is local to your market. They can share with you the differences of what's in the upper percentile versus what's being considered at the lower percentile. And often with an organization like ours, we have worked in your market previously, so we can give you real-life information about this is what we're seeing in the marketplace.

Yeah, makes complete sense. Um, I think even if you just go to like ChatGPT and say, what are the most recent jobs and what's the pay, like, you'll at least get a start from just like guessing. I'm not saying that's going to be the source of truth, but at least it's a start.

Yep. It gives you a start.

Yeah. You mentioned that retention is the number one, you know, recruitment or like make sure that you got stuff. What are some like, you know, 3 or 4 best practices that you would recommend to a home service business HVAC guy? Like make sure you got your retention in place, do these couple things.

Sure. One of the things I always try to help people know, and it really does begin with your management. What kind of investment do you have with your management in terms of keeping your people? You know, do you actually spend the time talking about the development of your teammates? So that's first. If that's not happening on a regular basis, then you're leaving yourself exposed to the opportunity of somebody else pillaging them because a much more efficient or a company that is really digging into their people, they're having those conversations. Sorry, Phil, looks like you're—

I was going to say, so like something very simple would be like have a book of the month club or something where like they can read different books, some professional development, send them to some like trainings or just get video trainings that they can do. If English is not their first language, get some English tutor in there or something. That's just like the— it's not straight professional development, but it's like showing them that you care and you want them to be better in whatever aspects.

Absolutely. But I, I even think with your management team, are you training your managers to be people leaders? Yeah. You know, that's the number one reason why people leave. And so do you spend the time talking to your team and developing them so that they want to develop the people that you're hiring? Yeah, because that is going to be your number one retention tool. So all those readings and things you talked about, I totally believe that. But I think you have to start first with your managers. Do they believe that? Do they see that their job is more than just trying to get the latest in the P&L, but it's how do I develop my team? How do I grow them? Because people will stay for leaders like that, and they know if they're just a number, well, they could go be a number somewhere else.

Yeah.

So that's the first one. The second in terms of the retention tool is that you want to be a place that's fun to come to. I mean, we are moving into a world where how fun this environment is, is part of the attractiveness. As we get younger with the groups that are coming into the workforce, this is a standard. It's not necessarily something that is optional. If you have a mindset, you know, and I was born in the '70s, lived through the '80s, you come there, you give a check, that's good enough. Those days are done. And so now it's really about, is this the kind of environment that is inviting to me? Is it also inviting to my family? And so that's where we talk about the quality of life piece. You know, it's not just, can you get home or you're sending them home, but do I have a great quality of life when I'm coming into this office or do I dread it?

Yeah. And then—

I'm sorry, go ahead.

I was gonna say some like, some cool ways that I've seen that, maybe you have some thoughts on these. Like one is like, Okay, if you get an— every upsell that you get on a job, you get a ticket in a raffle. And then at the end of the month, we raffle off a new TV, a half day, you know, something like that. Like, those are some fun, easy things to do with your team.

Yeah, absolutely. In fact, I saw one company, they actually created a booth and they had all the tickets.

Yeah.

And the person, they would blow the tickets up in the air and be swirling around and try to grab it. Yeah, yeah, no, it can be a fun, fun, fun place if you just learn to be a little creative.

Yeah. And I think a lot of times people think, okay, well, do I have to take them all out to this hunting trip and like pay for all this stuff? And like, yes, that sounds fun and cool, but there's also like less expensive things to do that's also fun that don't have to take a bunch of money. Like even the first 15 minutes when they come in, like play a fun game or something with them. It's like, that's fun.

Absolutely. And here's why this is so important, because notice I never said pay. I never said, you know, you got to just keep cranking it up. Because the weird thing is, is that over the last 5 years, we have actually seen an increase in pay of approximately 27%. No, sorry, 23%. In the last 5 years, we have seen an increase in wages in the skilled trades space, skilled trades space. Of about 23%. Here's the spot. Here's the part that's going to make your jaw drop. We've actually seen a turnover rate of 37%.

Wow.

So 1 out of every 3 of your teammates are leaving, even if you are increasing the dollars.

Wow.

We are currently in a process of renting people. That's what's happening. You have free agents and you're bringing them in. What the, what the smart owners understand is that we have to create more than just a paycheck. It's got to be a community.

Yeah, there's one of our clients is close to $10 million and he's like, it's so hard because the old, the older guys, they've been there, you know, 10, 15 years and they're like committed. And then the new people is like 2 to 3 years and then they're in and out and it's like, it's just like so hard. And it's like what you're saying, like renting these, renting, but you can get over that hurdle. But usually people give you like a 1 to 2 year test and then they're like, okay, I'm either out or I'm like, I'm cool with this. And there's growth opportunity, it seems like.

Absolutely. Absolutely. And, and here's the other thing too, I think owners are going to have to get more comfortable with is that— and I know this as a business owner, I know that I want to hire somebody who could the first day lock and loaded, be ready to go. But the reality is, if we all agree that there's this much of a gap in terms of the number of resources, we're going to have to start training people. We're going to have to invest in the time to actually spend with them because for small businesses in particular, If you know you can't outspend somebody, then you got to train and develop, train and develop, train and coach. In fact, one of the most interesting facts that I learned is that in the skilled trade space, 70% of all of the positions in skilled trades are done by 20 jobs. And the number one job in that group is maintenance and repair. Yeah. And so that's the biggest of that segment.. And so that means that's the most stress that you're going to see in the marketplace. Yeah. And so taking the time to train and develop and constantly be training and developing them is yet another retention tool.

Yeah. Very cool. And then there was a third retention tool that you were going to say after the fun environment. You remember what it was?

Let's see. Sorry.

Good pay, fun environment.

Good. And it was the managers making sure that you're training your management. To actually be great people leaders.

Yeah.

Awesome.

Another thing I want to hear your thoughts on. Is it better to find someone who works somewhere or is it better to find someone who's, you know, on the street?

Hmm. So this kind of goes a little bit back to what we were talking about in terms of trying to develop somebody. Understand, I honestly think it's a matter of both. Okay, you're going to look at both options. In fact, you should never limit yourself to one. For the option about taking somebody off the street, it's the training, it's the development, it's the coaching. Yes, you get them to do it the way that you want to, and you get it to do it at a cost-effective way. Because the reality is you're going to have to overpay for the ones who have the licenses or have been doing this for multiple decades. And so with those individuals who are currently coming in from other places, Yes, I think that you can do that, but you almost do it more selectively while you fill out the rest of your team with people that you're getting off the street that you're training that have the aptitude to do this. I kind of— one of my favorite things to do is play fantasy football. And if you play fantasy football, you realize when you're drafting, you might get one really great running back, you might get one really great wide receiver, and then you're kind of filling it in with you know, some Jimmies and Joes.

Yeah, sleepers, but they might actually fall asleep or they might actually, you know, rise to the occasion.

That's exactly right. And so I think you have to almost look at that way when you're managing your talent. You're going to pay for a couple of those number one wide receivers, which are the folks that have been doing it with one of your competitors for a decade. Those are great, but you couldn't fill your roster with those. It would be impossible. So you have to almost see it as a mix of the two. And be comfortable with that. Yeah.

Yeah. Very, very cool. I'm curious to get your thoughts on this. For a guy, you know, let's say our audience, like $1 million to $10 million business owners, that you mentioned the training piece several times. And I think a lot of times there's no training piece. It's just like, hey, this guy comes in, stick him with our senior guy, let him run for 2 to 3 weeks. And then like, you know, every Tuesday we'll have a technician meeting and like hopefully he gets coached up, but like, He'll be all right after a couple of weeks. Thoughts on that. And then also like what, uh, I know that it's not a good retention strategy, but like, uh, yeah. Any thoughts on like how you coach things, what you've seen, best practices, how these guys should actually do this? Yeah.

So I think, um, going back to the consumer in this case, being the new hire, what is it going to feel like for them? You know, if they have not been in the skilled trades before and they're getting a baptism by fire, essentially is what's happening in that circumstance. For some, it may click, but it's going to be few. And what you end up finding out is that you're just having to keep having a heap of people to hope to get enough to fill up. When in reality, if you are thinking about your trainer who's going out there, are they also people-centric? Do they also see the need to try to coach and develop? Because if they're not of that mindset, and I've had some partners or some clients where literally the person they had coaching couldn't stand new people. He couldn't stand them, but he was their most technical, best person on the team.

Yeah. So this is what happened at my home service business. We had a guy who was there for like 25 years. We had 28 technicians. Guy's there so long and he's like, this guy's great. He's going to be our trainer. And so we would stick the new guys with him and like we stuck probably 3 people with them and they all gone after 3 weeks because he said they were no good. And then what we realized was that he thought that they were coming in to take over his routes. And he was basically like trying to get rid of these people and just like, they're never gonna live up to my standards. And it's like kind of like what you're saying, like he did not want us to be, he did not want to train these people even though we knew he could. But he was like, no, no, no, no, they're not good. They're no, they're not gonna make it. You know?

Yep.

Oh my God.

That's exactly right. So the ones, the partners that we've worked with that do this well is that they realize they have to put together a program that's written out.. And they have checkmarks about where their progress should be along the way. And they also pull the trainees out and have interviews with them. How is your training going? How's your trainer been? How are you guys getting along? You know, often we take the side of the existing employee, which I understand. I mean, those are the people that we know the best, but like in your situation, if you get 2 or 3 interviews and you're getting the same feedback that this guy is so rough, I can't stand to work with this guy. If you hear that over and over again, you may have the wrong trainer. And you can only do that if you have a thought-out training program and you take the time to get to talk to the new hires. Yeah.

So before home service, I used to work at Enterprise Rent-A-Car. Oh yeah. And I went through their management trainee program, and it's specifically a 12-month program. And what they did for us was they built a management trainee roadmap. So every month we kind of had like, it was on us to ask the questions and run point, but every month we kind of had these roadmap pillar, you know, things that we needed milestones. And then we had to ask questions and then we would meet with our manager every month and like, where you at on your roadmaps? And then at 12 months you had this grill, they called it, where you actually had to go through a, like a very grueling process in order to get promoted, be able to get promoted. And so it's kind of like what you're talking about. You could go to ChatGPT Business Owner and, and tell it like, hey, over these next 12 months, each month I want them to learn this thing and it can be self-guided by them. And then every month I'm just going to check with them to see how they're doing on it. That's a good starting point.

Absolutely. And honestly, as small business owners, if you are not trying to work your way with AI somehow to help you write some of this stuff up, you're really hurting yourself. It gives you a competitive— I won't say advantage, but it gives you a competitive leg up. —yeah— an ability to compete with larger companies that have more resources. It's a very— it's a great tool. You got to work with it, but it will definitely get you 90% there. Yeah.

Speaking of that, anything's coming with the trades and AI, you know, the trades are the only thing that AI is not going to affect and da da da, like any thoughts on that? I have thoughts on that, but I want to hear yours first before I share mine.

Well, there's a couple of things that I've heard some mixed stories, but The one that seems to be the through line for most of them. So when I talked, as I mentioned, to Ron Hetrick or his writing partner, Josh Wright, one of the things that they conveyed was, is that particularly in the home services space, a lot of people are concerned, you know, will they take over our jobs? They're not concerned with the idea that some type of artificial intelligence is going to take the job because at the end of the day, you still got to turn the wrench. You know, you still have to be able to use the drill. And there's not an Android that's going to come in. And he said the reason for that is that there's not enough money because we're independent players and we're not collectively buying the ability to have some kind of Android as opposed to a large company like GE who can spend billions of dollars. And that's where the developers are going to spend their time. So I think if there's anybody concerned that some Android is going to come in next week I think you can rest those. But in terms of what we see on the horizon for talent acquisition, I think that it is going to be a complement. One, you can use AI to help you find the resumes of people that exist and not necessarily that they're actually looking for jobs, but it will help you source. But it always has to be blended with an actual human being. And the reason I say that is that there has to be somebody who's making the case. Again, it's going back to marketing. Who's making the case and understanding why somebody would want to leave their current home where their spouse is very happy and they see a consistent paycheck. What would prompt them to leave and join you and making that case for that? And so when people come to me, they say, aren't you worried about the software companies taking you out of business? It's like, I'm not, because at the end of the day, you have to make a case of why somebody would want to join your company. There is, you know, you find the pain point. Is it about money? Is it about the management or is it about quality of life? Those are the things. And even then, these guys have options. There's no such thing as a, a great technician that's unemployed that just says, I wish I could find a job, because the moment they say that, there's going to be 4 people jumping on them. Yes. So really what it is is that you have to dig to find people at the moment where they've reached that flashpoint. My boss is driving me crazy or I can't get home or I should definitely be making more money than this. That's where recruiters like us are able to help make the case. Well, this is why you want to come join Phil's team. Yeah, definitely.

So my AI for the trades, so just hear me out on this. One of my really, really good friends, he owns an onsite fleet maintenance company. So he has technicians that go onsite and then fix home service businesses' vehicles. That's great. And so he created a knowledge base for his business that has how to repair certain vehicles. So like, you know, GMCs, Ford F-150s, and then it has a knowledge base and they have glasses, the Meta glasses.

Oh, get out of here.

And so the Meta glasses can see the truck and then go back to the repository knowledge base. That is so cool. And say, okay, this is an F-150 XL. Here is the filter that it's going to need, and it tells it the exact thing to go get off the truck. And then it will even help diagnose the problem as they're talking through it with the glasses.

Well, and as you say that, I mean, I could see home services companies considering that as well, because when it comes— as we mentioned, maintenance is the number one job. Exactly, exactly. And if you're going to need to be able to bring in a lot of, um, people who may not have as much experience, this is definitely a level setting. That's a fabulous idea.

And, and If I didn't already have a business or a couple ideas going through my head, imagine Lennox, Carrier, they built these brains on their systems and they licensed it to Meta and then they got glasses for all of their people that were these technicians and now you can get them up and running way faster and they can work back and forth with a brain from these manufacturers.

Yep. No, it's a, it's a brilliant idea. This is, this is a million dollar idea, guys.

Come on.

Well, and again, it's about the investment. It's about taking the time, and it's hard as owners, you know. Uh, one of this— one of the statements that I learned when I started my company is that sometimes you have to slow down in order to speed up. Yeah. And that's one of those things where, all right, we're going to slow down. I'm going to learn about this AI. I'm going to learn how to use it to my advantage so that I can speed up and drive my business. Yeah, for sure.

Um, cool. I want to hear, like, what do y'all do? So, like, someone comes to you and they need to hire 10 technicians. Like, how do you find 10 technicians?

Yep. So, what we try to do is, well, one, our team is a group of skilled trades recruiters. We have been doing this. This is our focus. This is our specialty. A lot of times when you engage with other organizations, they're taking somebody who's only hired accountants. "Oh, sure, sure. I can find your technician." There is a different type of mentality when you're recruiting a technician, and it is one where it's about consistency. It's about being very frank and honest. It's about making sure that you can answer their questions as an organization. So, one of the first things that we do is for our clients, the customer— excuse me, the candidates never even know that Hunter Recruitment Advisors exist. We actually take on the persona of a recruiter for that company. And we do that because we have deep dive class or some deep dive meetings with them to understand their organization, their culture, their benefits. Really try to be a part of them. And then we also engage with their hiring managers so that we're learning about their team as if we are their corporate recruiter. And while we're doing that on the operations side, we're building out their marketing. And so the things that I shared with you earlier when it comes to are we putting out the right messaging, the right branding, we also will employ different types of tactics. Sometimes we've done radio, sometimes we've done billboards. We also use geofencing. To be able to target for competitors. So it's really knowing the strategy that's going to work best for the market that we're in. Yeah. And so when we do those two things at the same time, we will be able to accelerate how fast we can find those types of candidates. And so that's really the secret sauce, is the combination of both talent acquisition marketing as well as skilled trades recruiting and the experience of those skilled trades recruiters.

Yeah, I love it. One thing that people don't know is like if you run Meta ads, for example, you can drop a pin on your competitors and just run ads at that location for anyone who's gone to to that location. Yep. And it's like, wow, okay, so I can just show ads to people that have gone to that business over and over and over again.

Yes. No, absolutely, absolutely.

Yeah, very cool. Um, okay, so let's say someone's listening to this, where should they go to learn more information about your company?

Sure, so, uh, you can go to hunterrecruitment.net and you can find everything else out about us. Um, we are happy to talk to people, and it— and you don't have to become our customer if you just want to learn about the industry. You can also pick up our white papers that are there. You know, one of the things that we try to do is be a thought leader. We want to help skilled trades employers be able to understand what is it that they're working against. Sometimes it can feel like, I don't quite understand, this environment is different. We have done the heavy lifting. We can give you the reason why things are happening the way that they're happening in these environments so that you can make adjustments and make good business decisions. Yeah, I love it.

You and I could talk all day about this stuff. And even I've interviewed a lot of people that, you know, do this type of stuff, but not as in-depth as you and as the stats, the data, the process. It's like, this is really good. So if you're listening to this, even just reaching out, you know, get the white papers and get the information and the knowledge. It's at least a good starting point. So Aaron, thank you so much for coming on and I appreciate you sharing all this with us.

Pleasure's been all mine. Thanks for having me. You're welcome.