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Rebooting the Trades: How Gen Z is Shaping the Future of Field Services Software

  • Why a growing number of “Gen Zers” are showing a renewed interest in the trades.
  • How this demographic shift represents opportunities for new audiences and M&A for field services software companies.

For years, the skilled trades have grappled with a shortage of workers. Now, a new generation is revitalizing the blue-collar workforce, with important implications for field services software (FSM) providers.

Jobs in the skilled trades have long been looked down on as the province of manual laborers destined to earn less than their white-collar counterparts. As the number of college-educated Americans has risen steadily over the past 50 years, interest in the skilled trades has dwindled. And with the baby boomer generation aging out of the workforce and into retirement, the result is a potential shortage of up to 2.1 million workers by 2030, according to The Manufacturing Institute and Deloitte’s report:* Creating Pathways for Tomorrow’s Workforce Today: Beyond Reskilling in Manufacturing*.

That shortage, however, is driving up wages in the trades even as skyrocketing college tuition prices are driving down the value of a traditional four-year degree. Now, a growing number of "Gen Zers"—people born between the mid-1990s and the early 2010s—are showing a renewed interest in the trades. Judging by the increase in trade school enrollment, more and more are seeking jobs in construction, plumbing, HVAC, welding, and other blue-collar fields.

For field services software companies, this demographic shift represents an opportunity to reach a new and receptive audience as well as a strong tailwind that grows the addressable market and bodes well for investment and M&A.

The Shift Toward the Trades

Home services company Jobber’s Blue Collar Report notes that young people are looking for job stability, high earning potential, and the opportunity for entrepreneurship—all of which can be found in the trades.

The allure of these jobs lies not only in their affordability—most bypass the need for a costly four-year bachelor’s degree—but also in their earning potential. A McKinsey & Company article, Tradespeople wanted: The need for critical trade skills in the US, found that average wages across the skilled trades have risen 20% since 2020 and job openings have surged even as white-collar hiring is stagnating, according to Bloomberg’s article: US White-Collar Job Growth Stalls, Even in Pandemic Boomtowns.

Technology, too, is playing a role. Many white-collar jobs face potential threats from artificial intelligence, and there is a perception that skilled trades are largely insulated from AI disruption, thanks to their hands-on nature. At the same time, modern technological advancements are reshaping blue-collar roles, making them cleaner and less physically demanding—and are likely paving the way for tech-savvy workers to embrace them.

Gen Z’s Digital Natives

Generation Z is the first generation that doesn’t remember a world without the internet. Having grown up immersed in digital technology, from smartphones to social media, these young people are comfortable integrating tech into all aspects of their lives. They not only know how to use technology but take it for granted that their work environments will leverage it to enhance efficiency and engagement.

As Generation Z enters the blue-collar workforce, it brings with it assumptions, preferences, and expectations about technology that older generations lack. This shift could create opportunities for field service software providers.

Good News for Field Service Software Providers

The entry of Generation Z into blue-collar trades expands the potential market for field service software providers. FSM companies may anticipate more opportunities over the next few years to widen their customer base by appealing to a generation that is already familiar with the advantages of technology.

Unlike the boomer generation of blue-collar workers, which was slow to adopt new technology, younger workers take it for granted and expect that the tools they use at work will reflect the seamless, intuitive experiences they are accustomed to in their personal lives. This includes mobile-first platforms for on-the-go access, cloud-based applications that facilitate real-time data sharing, and interfaces designed for quick learning and easy use.

Generation Z’s comfort with technology is likely to drive a higher demand for sophisticated digital tools in the workplace. This demand will presumably be supported by younger business owners, who are more likely than their boomer predecessors to adopt field services software and other technologies for their teams. Since individual skilled trade job openings represent user license opportunities, the volume of new jobs that are becoming available indicates growth prospects.

It’s also worth noting that Gen Zers are still in the early stages of their careers, with many still in vocational programs or apprenticeships. By meeting their expectations now, field service software companies could position themselves for opportunities to secure a competitive advantage along with the potential to nurture brand loyalty and cultivate long-lasting customer relationships.

Buyers and investors are thesis-driven when it comes to investment. As the number of jobs in the skilled trades grows and more young people join their ranks, we believe that venture capital, growth equity, and M&A will take an increasing interest in field services.

Founders in this area should pay close attention to the company-specific metrics that buyers and investors are most likely to look at. The following five KPIs are usually weighted most heavily when it comes to field services software transactions:

  • Retention
  • Recurring revenue growth rate
  • Gross margin
  • Market size
  • Sales efficiency

With a combination of strong metrics and strong tailwinds, we believe that field services software providers will have a growing number of options available to them. Learn more about the demographic changes that are impacting the field services landscape.

This material and the opinions contained herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.

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Modified on Jun 03, 2024