How Field Services Software Can Capitalize on the Silver Tsunami
- Baby boomers are retiring en masse and passing their businesses into younger, more tech-savvy hands
- A lack of new workers is forcing these businesses to lean more heavily on technology
- For FMS SaaS providers, this shift creates important new opportunities
Baby boomers, the largest generational group ever born in the United States, are getting older, and the ranks of senior citizens are growing by the day. Sometimes called the "silver tsunami," this demographic shift is set to have an enormous impact on American business. Although boomers make up about 22% of the population, they own 40% of the small businesses in the country.
As boomers begin to retire en masse, their businesses are passing into younger, more tech-savvy hands. Simultaneously, a lack of new workers is forcing these businesses to lean more heavily on technology than ever before.
For SaaS providers, particularly those in the field services sector, this one-two demographic punch creates important new opportunities.
How SaaS Companies Support Field Services
Over 20 %, or around 460,000, of boomer-owned businesses provide field services. Field services is a broad term that covers jobs that require dispatching employees or contractors to specific locations as opposed to conducting work on the company premises. Examples include plumbing, home improvement and property maintenance, utilities, and healthcare home visits. Virtually all field services operations involved scheduling meetings and presentations, dispatching specialists, tracking progress on specific jobs, and providing quotes and invoices to customers.
The SaaS industry has stepped in with field services management (FSM) software. Many of these tools are tailored to very specific industries and can make every step of the field services process easier and more efficient. Despite this, however, small businesses are typically reluctant to adopt new technology. This is due to a combination of factors, including the sense that what’s worked so far is "good enough," a feeling of overwhelm when forced to choose between a number of different MWM options, and the general reluctance of older owners to learn and incorporate new technology.
How Changing Demographics Are Affecting Field Services
Every day, about 10,000 baby boomers reach retirement age, and a disproportionate number of them own their own businesses. While not all of them will opt to retire the moment they turn 65, we are sure to see a large number of field services businesses passing into the hands of younger owners, either through sale or inheritance.
Meanwhile, the birth rate in America has been declining steadily since the 1970s even as the number of available trade job options has increased. During the same time period, the number of Americans with four-year college degrees, who can be assumed to prefer white-collar jobs, has climbed from 10.7% to 35.7%. The result is that fewer younger people are entering field service industries, with job postings for specialized trade service positions far outpacing the number of skilled workers.
For SaaS FSM providers, the intersection of these two ongoing trends creates a powerful opportunity for them to expand their markets.
Opportunities for Field Service Management SaaS Companies
The most obvious opportunity for software providers lies in the transfer of businesses as boomers step back and begin to retire. Whereas the older generation of business owners was reluctant to rely too completely on technology, a younger generation is likely to be more open to adopting and using new FSM platforms. By developing full-suite solutions and marketing to this new generation, software companies should be able to widen their customer base as more of these companies pass to younger owners.
Opportunities also lie in the fact that it is getting more difficult for field services businesses to recruit new workers. This will force these businesses to do more with less while making the most of the employees they have. Demand for SaaS products that reduce labor needs while increasing the efficiency of existing employees is likely to grow.
Software solutions can do more than just reduce the need for workers, though. At least some older workers will want to continue working, and short-staffed companies will want to make the most of their experience. However, these older workers may have less energy and mobility than in their younger days. By making it easier for people to learn and use technology, SaaS products can help companies utilize the expertise of their senior workers while easing the physical rigors of the job.
Long-term Trends Mean Long-term FSM SaaS Opportunities
The "silvering" trend will continue into the foreseeable future. The last of the baby boomers won’t turn 65 until 2030, and many will no doubt wait longer to actually retire. The birthrate is projected to continue declining, and the percentage of people over the age of 65 is expected to rise from 16% to 22% by 2040.
This is good news for SaaS products that focus on the field services industry. Not only does it mean more potential customers, but as the markets grow, we are likely to see more capital flowing into the industry, especially in the VC stages.