1. The Boomer Exodus: Understanding the Impact

The impact of Baby Boomers retiring from the workforce cannot be understated. With a significant portion of skilled tradespeople aging into retirement, businesses across the trades industries—construction, plumbing, electrical, and more—will experience a substantial talent gap. According to the SWP IntorPro industry report, about 20-30% of tradespeople will retire in the next five years, leaving behind a void that needs to be filled quickly to avoid disruptions to operations. For small to mid-sized contractors, this mass retirement can lead to a loss of institutional knowledge and a depletion of experienced workers who have spent decades honing their craft. As these skilled individuals retire, the remaining workforce is tasked with managing not only daily operations but also guiding the next generation of workers.

2. The Shifting Workforce: The Role of Millennials and Gen Z

Millennials and Gen Z are now stepping into the workforce in greater numbers, but their paths are often shaped by different expectations and priorities compared to Baby Boomers. Unlike previous generations, Millennials and Gen Z place a high premium on work-life balance, personal development, and technological integration in the workplace. These differences can pose challenges, but also present opportunities for innovation and efficiency in the trades.

Millennials (born 1981-1996) are already in their 30s and 40s, many of them holding leadership positions or managing their own contracting businesses. They are likely to take on roles as owners or managers in the coming years, bringing with them fresh perspectives on operations, technology, and employee engagement. However, they may still lack the hands-on experience and knowledge of seasoned tradespeople who have been in the field for decades.

Gen Z (born 1997-2012) , meanwhile, is just entering the workforce in significant numbers. They are digital natives who expect technology to play a role in every aspect of their work. From digital blueprints to advanced machinery, Gen Z workers are likely to bring an appetite for tech-driven solutions, but may require more structured mentorship and on-the-job training to truly master the hands-on skills needed in the trades.

For contractors, embracing these younger generations means understanding their values, leveraging their strengths, and creating training programs that speak to their learning styles.

3. Challenges Contractors Face as Baby Boomers Exit

While the generational shift offers opportunities for fresh perspectives and technological advancements, it also brings several challenges for contractors, especially those in small to mid-sized businesses:

A. Skills Gap: Baby Boomers possess an immense wealth of skills and knowledge built over decades of experience. As they retire, contractors will face a skills gap that can be difficult to fill. New workers, particularly those from the Millennial and Gen Z generations, may lack the hands-on experience needed to replace these seasoned workers.

B. Loss of Leadership and Mentorship: With Baby Boomers stepping down from leadership roles, there is a looming leadership void. Many contractors rely on the guidance and mentorship of these seasoned professionals to ensure the success and continuity of the business. Without proper succession planning, younger generations may struggle to take on leadership responsibilities.

C. Business Ownership Transition: In many cases, Baby Boomers who own contracting businesses are retiring and looking to pass the torch to the next generation. Millennials and Gen Z business owners may have the entrepreneurial drive but may need additional support and training in areas such as management, business operations, and client relations to successfully transition into ownership roles.

4. Strategies to Bridge the Gap and Prepare the Next Generation

Despite these challenges, there are several strategies small and mid-sized contractors can employ to ensure a smooth transition and optimize the performance of Millennials and Gen Z workers.

A. Develop a Robust Mentorship Program: One of the most effective ways to bridge the skills gap is through mentorship. Baby Boomers who are approaching retirement can pass down their knowledge to younger workers by serving as mentors. This ensures that valuable institutional knowledge is not lost and helps younger workers build the hands-on experience they need to thrive. For contractors, this could mean creating formal mentorship programs that pair retiring employees with Millennials and Gen Z workers. These programs could include job shadowing, skill-building workshops, and opportunities for new hires to ask questions and learn the intricacies of the trade.

B. Invest in Apprenticeships and Training: Training programs and apprenticeships play a pivotal role in developing the next generation of skilled tradespeople. Contractors should invest in structured apprenticeship programs that combine on-the-job training with classroom education. These programs can help new workers build the technical skills they need while gaining practical experience. Apprenticeships are a great way to attract and retain Millennial and Gen Z workers who are eager to learn and grow but may need more structured guidance. Contractors should work closely with trade schools, community colleges, and unions to establish training pathways that align with industry needs.

C. Embrace Technology and Innovation: Millennials and Gen Z bring an appetite for technology and innovation. Contractors can leverage this by integrating digital tools, software, and equipment that improve productivity, efficiency, and safety on the job site. This could include adopting project management software, digital blueprints, and cloud-based collaboration tools. For contractors transitioning to new ownership, incorporating technology into operations can improve both the day-to-day management of the business and the overall customer experience. Encouraging new owners to embrace technology will allow them to stay competitive in a rapidly evolving industry.

D. Foster a Positive Company Culture: Millennials and Gen Z value work-life balance, flexible schedules, and opportunities for personal growth. Contractors can attract and retain younger workers by fostering a positive company culture that supports their values. This includes offering opportunities for professional development, providing a safe and inclusive work environment, and ensuring that employees feel valued and respected. As Baby Boomers exit the workforce, it’s important for contractors to redefine what a “successful” career in the trades looks like. By offering employees a sense of purpose, career progression, and opportunities for advancement, contractors can retain the best talent and prepare them for leadership roles.

E. Plan for Succession in Business Ownership: For contractors who are nearing retirement and looking to pass the business on to younger generations, succession planning is essential. This includes identifying potential business successors within the family or workforce and providing them with the necessary training and resources to manage the business effectively. Young business owners will need guidance in areas such as financial management, employee relations, and customer acquisition. Contractors can work with business consultants or financial advisors to create a comprehensive succession plan that ensures a smooth transition and preserves the company’s legacy.

Building a Strong Future for the Trades Industry

The exit of Baby Boomers from the workforce is a monumental shift, but it also presents an opportunity for new talent to rise, innovate, and shape the future of the trades industry. Small and mid-sized contractors can successfully navigate this transition by investing in training, mentorship, and the development of new business strategies. By embracing Millennials and Gen Z workers, supporting their development, and creating an environment that fosters growth and innovation, contractors can bridge the gap and ensure a prosperous future for the trades industry.