Mark: Today on Power Tips unscripted, we talk to Mischa Fischer, chief economist for home Advisor and Angie’s List, an aging skilled workforce is retiring and there’s a shortage of younger people taking their place. What is a remodeler to do? Well, Mischa is here to discuss what businesses can do to bridge the skills gap and how to change deep seated perceptions around joining the home services industry.

Victoria: Hi I’m, Victoria Downing. And welcome to Power Tips Unscripted, where we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. And I’m here with my co-host, Mark Harare. Hi, how are you? How you doing, Mark?

Mark: I’m doing good. How are you?

Victoria: I’m really good doing well. And especially because of the upcoming episode that we’re going to be doing in just a moment.

Mark: A hot topic, to be sure. my.

Victoria: God. It’s everywhere, isn’t it? Everybody’s talking about it. We could we could do so much better. We could make so much more money. We could be so much more profitable, if only we could produce the work in the pipeline.

Mark: Yeah, we got to turn business away because we just were too far out, you know?

Victoria: So we get a lot of chit chat about this issue, you know, anecdotally from other small business owners. But today we have a treat because we have somebody is looking at this in a much more global way, much at a much different level than most of us are exposed to. So it’s pretty cool.

Mark: It’s going to be great. Can’t wait to hear about it.

Victoria: All right. Well, let’s jump in. Mischa Fischer is the chief economist at ANGI Home Services, representing both the home advisor and Angie’s List brands. Prior to this role, Mischa was the chief economist for the state of Illinois, where he served as the economic policy advisor to the governor. He is also a former legislative director for the United States Congress in Washington, D.C., and is currently an instructor in Applied Quantitative Analysis at Northwestern University.

Victoria: We’re excited to have Mischa provide his expertise in this hot topic, which impacts you and all of our listeners. So welcome, Misha.

Mischa: Thank you. Good to be here.

Victoria: I got to tell you, I was reading your bio here. I’m not even sure what applied quantitative analysis is.

Mischa: But it’s such a big question. It’s basically how do you map statistics to real world problems?

Victoria: So I like that explanation.

Mischa: Yeah. Sometimes, you know, academics have a reputation for being a little bit aloof, a little bit detached from the real world. And so this is how do we take some of these things and this a rigorous way of thinking for which there is a real benefit. And how do you take a real problem that we have and how do you map the two?

Mischa: So that’s what that class is all about.

Victoria: That’s very fascinating. So so this particular topic they were talking about, this skilled labor shortage is something that, again, our members, our listeners, we’re talking about it all the time. How you again, you look at it a different level. What is what do you see and how did we get here?

Mischa: That’s a that’s a really, really important question. So what we see is a three fold problem. The first is just the basic demographics of it. If you look at the average age in the trades right now, we’re going to see a wave of retirements over the next ten, 15, 20 years. And if you look at the pipeline, you’ve got the millennial generation, which is the largest working generation there is, and they are not coming into the trades at the rate that they need to to replace all of that.

Mischa: So that’s the first problem. The second problem is that it’s already there’s already a shortage right on the Home Advisor network. We’ve called the pros that we have, and we’ve seen that about 63% say they could not find a skilled worker to fill that open position. And about 70% say that they could grow their business if they could fill that spot.

Mischa: And 69% of them say the problem’s getting worse. So this is already a big problem. And it’s the forecast is not in the right direction. The forecast is that it’s actually going to get worse. And this bears out, actually, if you look at what the official numbers are in terms of how the demand on the broader national marketplace for the labor and talent is changing.

Mischa: So if you look at the need for carpenters over the next 8 to 10 years is expected to grow about 50%. And they’re already earning a good wage. And so you can expect those wages to grow up. Same thing for roofers. Both already earn a little bit above the national median wage right now. So the standard wage in the U.S., if you you know, there’s a we’ve got 100 and 5060 million people working.

Mischa: And if you look at the national wage, the average it’s about 1860 an hour with the overall growth in jobs expected to be about 7% or so. And so the two that I just mentioned, carpenters and roofers, you’re looking at already a growth of 8% for carpenters. So that’s already more than 10% higher growth than is expected across the national average.

Mischa: And the wage right now is already high enough to attract people. And then it gets more extreme as you grow go up the sort of the technical ladder in terms of skilled trades. So that’s carpenters and roofers. If you’re looking at plumbers, electricians, already the wages are about 40% higher than the national average. So this ought to be a big strong signal to pull people into these labor markets.

Mischa: And the growth is expected to be more than double what the national is. So the growth in plumbers is expected to be about six percentage points versus 7% nationally over the next 8 to 10 years. So we’ve got this growing demand and we’re already expected to see growth in the people entering these things. And it’s still not enough.

Mischa: Wow. Quite a genetic problem.

Victoria: Yeah. So what do you what do you do and what do people do about it? What how do you how do you manage with that?

Mischa: So I think that that’s a really complex answer and solution. The first thing is what we’re doing right now, which is just talking about if we raise awareness, then we can potentially solve at least a little bit of the problem. And I think that that’s somewhat counterintuitive for most people in the technical trades, because you’re used to not having talking solve problems, you’re used to having to do things to solve problems, right.

Mischa: In this case, on these broader societal challenges, just talking can be part of the solution. So by talking about it, we can get policymakers and educators and families, parents and kids all interested in this thing just by raising the awareness, just by making them aware that, hey, this is a really good career path and B, there’s problems that we have and we need to start addressing the problems.

Victoria: Wow. Okay. Well, that sounds pretty simple, so I’m glad we’re helping in that respect right off the get. But so if you are a business owner, what are some of the things you can do to attract those coveted skilled labor people to your company there?

Mischa: Well, there’s there’s good news and bad news for you. The good news is there’s a bunch of things you can do that aren’t just competing on salary. The bad news is you’re going to also have to compete on salary. It’s a red hot labor market and you’re going to have to provide a competitive wage. But there’s there’s there’s I’d say you can really boil it down to five things that you should really be thinking about doing.

Mischa: And the first is the most obvious. Consider how you’re posting your jobs. What we see overwhelmingly is that pros rely on word of mouth. So again, so we again, when we polled the Home Advisor network, we ran into 74% say that they relied on word of mouth. Only 39% said that they relied on Internet postings. Real things like going to a high school job fair, only 3%.

Mischa: And it relied on that as a tool. And that’s probably the best of any of those tools. And you’re only ending up with three in 100 people actually using it. When you’re making people aware that this is even an option, that’s that’s probably number one. Number two is think about the generation that you’re dealing with. So millennials and Gen Z, which is sort of the next one up.

Mischa: The Gen Z, the older Gen Z are in their very early twenties. Right now. The youngest millennials are in their early twenties, the oldest are in their mid-to-late thirties. And you know, that’s still there. You can still consider a new career in your mid-to-late thirties. Sure, certainly. And so for these generations, consider what it is that they like.

Mischa: They really like a sense of autonomy, but also a sense of feedback. They like to feel valued. They want to make sure that they have options for creativity, a sense of growth, the ability to take pride in their work, leadership opportunities. So these are all things that don’t cost you anything, right? You’re going to have to compete on salary, but you can also just compete by providing a really rewarding workplace for people and a sense of really having a career.

Mischa: And so that’s, I think, the number two thing that you can do. The number three thing you can do is taking all of those things that you’re applying to your business and making sure that you’re building a team and fostering a culture where everyone has that same sense of mutual respect and can work together. And that’s also something really, really important.

Mischa: The you know, there’s a lot of evidence that people don’t leave that that jobs that people are willing to do a lot of work, even work that they don’t necessarily enjoy at any given minute if they like the team that they’re working with. Right. So a team is free to you. It’s going to be some work, but it doesn’t necessarily cost you anything off your bottom.

Victoria:

Mischa: The fourth is recognizing the fourth and fifth. They’re both kind of related, and that’s recognizing generational differences. So I. I grew up on a farm on the West Coast, and my my father worked for the power company as a as an electrical worker. And so it’s been interesting to ask. He just retired last year. He’s on the older end of the baby boomers.

Mischa: And I asked him about, well, what are some of the generational differences that you see across generations? And so four and five kind of come from him. So I’ll give him credit where credit’s due. Great sense of advice here.

Victoria: Thanks, Dad.

Mischa: Recognize that? Exactly. Thanks, Dad. So the thing you have to recognize about millennials is that one of the real benefits about them is that they want to have they really want to do good work, but they want to follow kind of a formal learning environment. So you really kind of have to provide a clear pathway to get there.

Mischa: And I don’t know if it’s just because we all grew up playing video games or what the reason was for or why this is something anybody else really like. But that’s something that he’s noticed with the younger cohort of electrical line workers that have come up is that they have a more rigorous sense of learning than the cohort that he learned was, you know, in his mind the cohort that he learned when they were kind of middle of the road from the cohort he learned from when he learned line work, it was guys who were born in the 19 tens or 1920s, and it was just a thing.

Mischa: You went out, figure it out. And then for his cohort, they were kind of in the middle. And then for my generation, as they’ve learned to align work, they’ve liked to follow a really rigorous path. They want to do things by the book. They want to really have that sense of learning. So lean into that, recognize that there’s some real benefits to that and build your learning pathway around it.

Mischa: And then the fifth thing is the exact opposite. If you happen to be a younger person who has your own business. So for some of the younger listeners, make sure you’re not just hiring people in your own age, school work. Make sure you’re also looking at recruiting in older talent that’s more experienced because we don’t really encounter a lot of problems that are new.

Mischa: It can sometimes feel that way, but we don’t really encounter a lot of brand new problems. And so by pulling in, somebody has more experience. Chances are they’ve already seen not only the problem, but also a suite of solutions that have been applied to it. And they’ll probably have a more innate sense of what you can do to fix it, what works and what doesn’t.

Mischa: So those are my top five piece of advice.

Victoria: yeah. So those are really good. Now, one of the things that we’ve heard and I want to jump I want to go back to the recruiting part for just a second and circle back. Yeah. You talked about going to a high school, job fairs and so on. I remember attending a conference not that long ago where they were telling anecdotal stories about the high schools, not encouraging or in some cases not even allowing companies to come in and talk about the trades as up as even a possibility because the parents and the PTA is were so, so invested in getting their kids to college.

Mischa: Have you a broader issue that we really need to figure out? I don’t know that that’s going to be true everywhere. It could certainly be true in some places. But I think that the student debt crisis, as we’re calling it, and there’s a certain degree of truth to that, that this is a way to avoid that and to earn a great career.

Mischa: And I mean, I know I personally know some plumbers who are multi-millionaires.

Victoria: Yeah.

Mischa: That’s true. In other trades businesses, too. I think it’s probably you know, plumbing is the most direct now group that I’m aware of, But I think that that’s true across the board. Also grew up with a handyman business, too, which is just like anything else. If you have an entrepreneurial spirit and a sense of service and an attention to detail, you can grow a really successful business.

Mischa: And that’s what we want our kids to be do it. We want them to be entrepreneurial, provide a sense of value, to feel satisfied in their work, and where possible, avoid a bunch of debt that’s going to burden you down.

Victoria: Right.

Mischa: In some cases, kids are graduating at 22 or 23 and they’re going to carry that debt until they retire. Yeah. You know, that’s that’s a little risky. And I know, you know, this is one of my favorite things. I know people who are software engineers and lawyers and accountants and medical professionals and across the board, I know somebody in each one of those fields who does things like carpentry and machining and woodworking and those sorts of things on their spare time.

Mischa: I don’t know any carpenters who do accounting on their spare. You really feel a lot of satisfaction in some of these, you know, some of the trades. And so part of it is just making sure we educate parents on that narrative.

Victoria: So, okay, so then I’m a come back to that one again also. But you talked about giving them a clear pathway to learning. Now, a lot of of our listeners and a lot of the people you deal with currently are small business owners. They may not have that path that thoroughly spelled out. It’s not like that. There’s a lot of time to sit down and develop detailed systems around some of this.

Victoria: So a lot of people are doing a little bit more flying by the seat of their pants when they’re bringing in new people. Got any suggestions for how they would attack this?

Mischa: Yeah, I think take a weekend where you know, you were otherwise going to do maybe something that’s a little bit more fun. But take a take a Sunday afternoon if you have that off and talk to if you’ve got kids, talk to your kids. If you doesn’t have any, as long as they’re older than about age three, they can probably give you some insight into the learning process.

Mischa: As you know, other young people try that or, you know, if you don’t know anything, just sit down and think about it. But really just take the time to sketch out. It doesn’t have to you don’t have to overthink it. It doesn’t have to be complicated, but just sketch out on a single piece of paper in your notepad, a more formalized structure to how you would get people up to speed on what’s important to you.

Mischa: So you could do that by first breaking out the different aspects of your business or the technical piece. And then the more customer service based your your brand identity, how you want to make sure customers feel sort of. So break out those two pieces and then within each one, break out the various components of what are, you know, if you’re in a licensed trade and you’re pulling in people who have already gone to trade school and have passed their certifications or whatever it is, then you already know they’ve gotten some basics.

Mischa: But then think back on when you did it and think back on all of the things that you didn’t learn in trade school or you didn’t learn and your all the things that you had to learn, the hard way, basically, and map all those out, just write them out and then arrange them into a logical order and do the same thing for the customer service piece.

Mischa: So when has miscommunication with a client resulted in a non positive experience for you or your client? So think about what went wrong in a case. Think about what normally goes right since most customer interactions usually go correctly. Yes. And so think about what goes right or wrong. And those things just break out those pieces and then put them together in a way that makes sense in terms of, well, I should learn this and then this and then this and then this.

Mischa: And so I don’t think you have to overthink it more than that. And then when you bring in a new person, make sure that they can sort of visualize how you’re going to teach them, implement them, and what the milestones are for for you. So that they can feel a sense of pride and accomplishment.

Victoria: Okay. All right. Great. So, again, this is a national problem. There’s a lot of talk about it locally. You know, within our own little groups. But it’s what are the government and industry leaders what are they doing? What can they do to help build awareness and help solve this problem that’s going to just get worse and worse?

Mischa: So the first one is like I kind of said, we’re talking about it. And the second thing is closely related to that is make sure you incentivize it so we do we have a scholarship program through Home Advisor that we put out there, and we did an event with some young people a couple of months ago in D.C. where we tried to attract some policy makers to it.

Mischa: And I think this is something that everybody can do. You can go to your local city councilperson, your school board members, your congressman, if you want any one of these areas. You know, we live in an open society so you can petition your government for things that you’d like to see changed and feel free to coordinate with other tradespeople, you know, So if you want to go into a high school trade fair and you’re running into some opposition, that or, you know, high school jobs, very running into opposition, then recruit some of the other tradespeople, you know, and try and schedule some time with the PTA and go in and talk to them about it

Mischa: and really spell out all the benefits that that you can provide in terms of an alternative pathway. So that is one thing. I think separately, you know, I spent some time working for both federal and state governments and nothing changes quickly there. I think that there is a growing realization because people are talking about this problem, that something has to switch a little bit.

Mischa: And the you know, we have to be smarter about how we incentivize high schools and universities. Right now. I think we need to really recognize that you don’t have to. A, no, you don’t have to go to college to be successful or a university. You know, you don’t have to do those things to be successful and be if you are doing those things, you should recognize that you’re running the risk of racking up a lot of debt and not necessarily having a career that you find rewarding on the back end.

Mischa: So what you can do and you know, this is something that I think is not talked about enough. If people want to get educated later on formally, you know, you can learn lots of different ways. But if you want a formal university education later on, you don’t have to be in a big rush to do that. And what you can do is go into the trades.

Mischa: If you’re not sure what you want to do, learn a useful technical skill. Learn how to show up on time.

Victoria: Right?

Mischa: Provide people value to people. And then, you know, once you’re earning an income and finding a way to provide value to the economy, then you can consider taking night classes or taking a year off because you’ve got this trade skill to fall back on. And then you can see if you really like it. Unfortunately, the way that we tend to treat university now is kind of a four year resort and it should be treated with the seriousness of any major purchase because the cost of university isn’t just the tuition, which is of course rising higher.

Mischa: And it’s not just the interest on your student loan debt, but there’s also the opportunity cost, which is the cost of that money you’re not earning while you’re doing that. So if you’re looking at an average trading salary of 40 to $70000 a year or something like that, obviously people make more or less, more or less, depending on where they work and how much they work.

Mischa: But let’s say $50,000 is kind of an average since the math is easy. If you go to a four year school that is costing you $200,000 in foregone earnings, in addition to what it’s costing. And so we really need to educate parents about those choices. And so there’s nothing wrong with sending your kid into a trades program or having kids be interested in trades programs.

Mischa: And then, you know, if they want to do a university education later on, they’re free to do so. That’s not going anywhere. But at least this way they have a solid economic foundation right now.

Victoria: Go ahead, Mark.

Mark: No, it seems to me like the first step in this in this problem is, is to try to do something about the stigma attached to going into this profession, because it’s like that’s the biggest thing. You know, the parents don’t want their kids to do it. They wanted to go to college and all that. It’s it. What do you think about that?

Mischa: Yeah, I think stigma is a problem. I think, you know, there’s still the old Saturday morning cartoons from 20 years ago of, you know, the plumber and the butt crack and all that sort of thing. But, you know, a just as an economist, you know, we tend to focus a lot of money. So maybe it’s a myopic view, but you can remove a lot of stigma, stigma by pointing out how lucrative it is.

Mischa: Right. So, you know, I think that’s one piece. The second piece is I think culturally we have to recognize that we should value honesty and work and integrity. And there’s a lot more ways to earn an honest living as a plumber than, you know, potentially as a as a corporate big law lawyer. Right. I mean, which would you rather do?

Mischa: Would you rather build something that makes somebody’s life better or would you rather litigate? That’s right. So and that’s you know, I have friends who are pet lawyers, so I don’t want to see like, totally. But, you know, the people I know who are in the trades are, on average, happier than the people I know who are doing other forms of work.

Victoria: So you’re exposed to a lot of small business owners. Do you have a sense for coming back to what we can do today? Do you have a sense for what some of the more successful tactics are? And you mentioned the high school job fairs and that’s awesome. And spread the word word of mouth. But there’s got to be some other things that you have seen business owners doing to attract great workers.

Mischa: Yeah, I mean, I think to attract great workers, you have to do all of these things well and you have to you know, part of the challenge is keeping great workers in red hot labor markets that we have right now with the lowest unemployment rates in 50 years. Then the challenge is not just tracking them, but also keeping them, I think, to keep great workers.

Mischa: So attracting workers is kind of the things we talk about. You have to provide a sense of career and a sense of autonomy, but also feedback to provide a competitive salary. I think to keep great workers, you have to make sure that you are first and foremost listening to what their needs are because they do have alternative options in either other trades, places or in other sectors of the economy.

Mischa: And, you know, I think in addition to that, you really need to make sure that people feel a constant sense of growth. So I think people leave jobs when they start feeling like it gets stale or if there’s a sense of instability. So constantly be thinking about new ways for people to learn. So even your experienced people, you know, you could think about bringing in book artists of your trades.

Mischa: There’s always new things that are going on in building materials, so you can think about, well, do I bring in people from all the various building things and do a weekend seminar where people come in, learn about what’s going on in that it communication speed on it, Are there competitions? So, you know, I mentioned my father was a lineman for the power company where we grew up and they have competitions for linemen to see who can scale the pole.

Mischa: Right. And firefighters do this too. So, you know, think about that. Are there are there other ways that you can build and grow your community that make people feel a constant sense of like,

Victoria: Okay, great.

Mark: Well, Misha, I want to continue the constant sense of learning and learn a little bit more about you. Are you ready for the lightning round?

Mischa: I’m ready for as well as I’ll ever be. And now here’s a reminders advantage. Lightning round. It’s a trap.

Mark: Okay, let’s put 60 seconds on the clock. Here we go. What’s your favorite business book and why the.

Mischa: I’ll give you two answers. The first one’s a little esoteric, but I’m going to say it anyway. And that’s the origins of political order by Francis Fukuyama. It gets a business book because it gets at how people interact, and that is in the end what this is about. My real answer is the book Super Forecasting. It’s an economics book, but it’s really about how you think about the future and how you measure success.

Mischa: Now.

Mark: If you weren’t chief economist for Home Advisor and Angie’s List, what do you think you’d be doing?

Mischa: I think I’d probably be a mechanical engineer. I really like it. It’s a lot of the same math as economics, and it’s about building practical things. It’s not a lot of theoretical mechanical engineering, so you do a lot of experience.

Mark: What are you not very good at? Dancing your room, your desk or your car? Which would you clean?

Mischa: First desk, then car. That room I spent the most time at my desk, the second most of my time by car. The least amount of time in my room.

Mark: How many pancakes do you eat in a year?

Mischa: Five or seven in that? Not a lot of pancakes. Usually Once a year on my birthday. And there you go.

Mark: What do you do first? Wake up or open your eyes. Wake up. Name a movie you’ve seen more than ten times.

Mischa: Forrest Gump.

Victoria: All right. Well, thank you, Michelle. This is fascinating. Thank you so much for being here and sharing your expertise with us. You know, it’s just great to have that that higher level perspective now, before you leave us, though, I want you to share your five words of wisdom with our listening audience and tell us why they resonate with you.

Mischa: Read books widely and often. Those were my five words.

Victoria: Good.

Mischa: I think you should read both fiction and nonfiction. You should. I think that, you know, we do. Something’s wrong with university education. I think one of the things we do really right is we foster a sense of reading. And sometimes the reading material could be a little questionable. But I think it’s important to read as much as you possibly can to a wider variety of sources as you can.

Mischa: If you read a lot of fiction, you can learn a lot of lessons about how to go about your life and how to avoid making the wrong decisions, those sorts of things. And then you should read a lot of nonfiction because there’s a lot of technical knowledge you can gain from that, whether it’s about your industry or just an industry or history, whatever those things know.

Mischa: So that’s my number one thing. Read books lively enough.

Victoria: That’s wonderful. And I am definitely with you in that camp. So thank you very much for taking the time out of your very busy day to be here with us and share your expertise. Are there any resources that you would like to share with our listening audience that we should put in show notes, any resources that would might help them or or anything?

Mischa: Yeah, we’ve got a pro center that is I think has a lot of AFRICOM advisors. Brandon We’ve got a pro center that allows people to go in and learn various things about the industry. And then we’re also in the process of launching a very noncommercial research portal that’s not tied to the business in any way. It’s just about understanding industry and analysis.

Mischa: It’s not quite live yet, but over the next month or two we’ll have that live and that’ll be at home. Advisor dot coms last research. And that’s going to be noncommercial, not tied to our bottom line. Just understanding the market and dynamics and labor force trends and housing trends and all these sorts of things. So wonderful up and running in the next 4 to 8 weeks.

Victoria: That’s wonderful news. Thank you so much. So this has been great. And again, we appreciate it and we hope to see you again very soon.

Mischa: Great to be with you both and look forward to chat the next time.

Victoria: All right. Thanks, Mischa. Well, that was pretty interesting. You know, the concept of one of the best things we can do is just talk about this issue. Yeah. You know, really, I think that a lot of remodeling company owners and staff sit around and complain about it to each other, but, you know, really write me or you instead of getting out there and saying, Hey, Peter, we want to come talk to you about the possibilities here.

Victoria: Hey, let’s do a trades job fair. Hey, let’s team up with our other people. Let’s get this show on the road.

Mark: Yeah, it does come down to that. I mean, it’s just educating and talking about it. You got to get everybody on board that this is not a bad thing to do it. You should be proud of your kids for wanting to get into this instead of questioning their decision to do it. And that’s, I think, in my personal opinion, is a big part of that problem.

Victoria: Yeah, yeah, I agree. You know, but also take an even more step writing to the government. Maybe there are programs that could should be developed to help goose people’s interests in these in these industries, in these roles, in these professions, you know, And the high school job fair, too. I mean, she’s appeared only 3% of their people do that.

Victoria: That is crazy.

Mark: Geez, opiates. I like that. So it she’s geez, opiates. Fantastic. Yes. Good stuff.

Victoria: Yeah. There you.

Mark: Go. You need to you need to clean up that language for this show. She’s a opiates.

Victoria: Really?

Mark: Well, that was a good one. And hey, Forest Gump was his more than ten times movie. That was interesting. Yeah.

Victoria: I’ll say. I was trying to think which mine would be. I think it’s The Matrix.

Mark: yeah, I want.

Victoria: Yeah. All right. Well, shall we wrap it up? Thank you all for being here with us. We appreciate you listening in week in and week out, please spread the word. And if you’ve got any great podcast ideas, we’d love to hear them.

Mark: Absolutely. I’m Mark Harari

Victoria: And I’m Victoria Downing.

Mark: We’ll see you next week.