GCR

Michael Braun, Ph.D.

Causes and Consequences of Skilled Labor Shortages

Unfilled positions in skilled trades have reached crisis levels in the U.S. labor market. Skilled trades include industrial (e.g., welders, machinists, mechanics, tool and dye makers, and programmers), construction (e.g., electricians, plumbers, gasfitters, carpenters, bricklayers, technicians, and insulators), and service occupations (nurses, aides, orderlies, therapists, and service technicians). Already a significant problem pre-pandemic, Covid-19 amplified shortages in skilled labor, resulting in over 60% of organizations struggling to fill relevant open positions. The statistics are mind-boggling. Over the past two years, the construction sector alone anticipates needing to hire 61,000 workers a month to keep up with commercial and residential demand. With an unemployment rate of 4.0%, the challenge of preparing and attracting skilled tradespeople seems insurmountable.

Before addressing the role of the metaverse in supporting trade vocations, it is useful to revisit some of the predominant causes of the shortage in this segment of the labor market. For one, as Baby Boomers retire at record rates, companies are competing to fill the resultant vacancies. Compounding this issue is the inadequacy of effective vocational awareness and training programs. Two-year colleges and trade schools, traditionally responsible for training skilled workers, have seen their budgets decimated due to a lack of sufficient federal and state funding. In contrast, both public and private four-year colleges have prioritized non-vocational curricula, reinforcing the long-standing American narrative that college is the only path to professional success. Many who might thrive in the trades never give any consideration to careers in those industries. Put simply, demand for skilled trade workers far outpaces supply.

Another more subtle yet important driver of workforce shortages is the unfolding fourth industrial revolution. Fueled by several nascent technologies such as smart sensors, machine learning, and robotics, Industry 4.0 is expected to accelerate job displacement, with the Brookings Institute forecasting vocational occupations to be the most vulnerable. While many economists hold that the net effect of jobs created versus destroyed during industrial disruptions balance one another, this time around, the sheer scale and speed of technological transformation may hamper the necessary upskilling and retraining for tomorrow’s workforce. Lastly, and specific to the Covid-19 pandemic, close to 4 million workers left the workforce each month during 2021. While this so-called ‘Great Resignation’ was thought to be largely attributable to the Paycheck Protection Program and other government-backed initiatives, the reality is much more complex. Recurring infections among essential trade workers (e.g., meat packing, nursing, construction), lack of access to affordable childcare, and the need to care for family members, have critically inhibited workers, and especially women, from re-entering the labor market.

What emerges is a complex and multi-layered problem lacking any quick fixes. Enter the metaverse.

Skilled Trades and Web3

The rapid evolution of metaverses, herein using Janine Yorio’s definition of “alternate digital realities where people socialize, work, play, and transact,” offers a dazzling array of opportunities for attracting, preparing, on-boarding, and upskilling tradespeople. Web 2.0 solutions promising “an interactive, immersive and social environment that acts like a video game” (Yorio, 2022) already exist. Providers such as Pixo, VRSim, and TransfrVR deliver both virtual (using Oculus Quest) and augmented reality-based training opportunities for prospective and incumbent workers in worker safety, machine operation, welding, manufacturing, and assembly. In addition to hard skills training, these providers also offer situational training in traditional “soft” or “power” skills, including customer service, communications, and conflict resolution.  While these efforts represent steps in the right direction, they remain both limited and limiting due to their permissioned systems.

Permissionless 3D virtual platforms such as Decentraland and Somnium Space can greatly enhance interest, engagement, and efficacy across skilled trades, from career exploration to training and career progression. A few areas of opportunity include:

Career Awareness: Most of the energy put into solving the skilled trades conundrum is focused on identifying, recruiting, and preparing candidates who can enter the workforce ‘career-ready.’ Yet a significant barrier, especially among today’s younger generation, exists in the lack of ‘career awareness’ – that is, educating potential candidates about what a specific vocation actually entails. Employers, industry associations, and their educational partners can personalize specific learning environments using digital twinning to provide prospects with greatly enhanced virtual apprenticeships. With the combination of video game elements and virtual simulations speaking directly to digitally-native generations, these interactive and immersive virtual apprenticeship environments can deliver a realistic, fun, and safe approximation of ‘a day in the work-life.’

Adaptive Learning: Education and training, in large part, remain in a standardized one-size-fits-all delivery format. Yet neurodiversity among individuals increasingly requires tailoring education and training to unique learning needs. NFTs (non-fungible tokens) hold the potential to develop and deliver adaptive learning journeys.  As Schroeder (2021) explains, “in the case of self-paced classes, a series of assessments can be embedded that are automatically graded and NFTs are issued based on the demonstrated competencies.” As public displays of verifiable credentials, NFTs can reach beyond just representing open-access proof of an individual’s acquired skills, capabilities, and knowledge, but also provide a customized path for additional training and upskilling.

In this way, earned NFTs can grant unique permissions to a trainee to access both virtual and real-world job sites, specialized tools or equipment, or specific areas on the production floor. Additionally, employers can issue POAPs — digital certificates of attendance using the Proof of Attendance Protocol — to trainees engaging in workshops and on-the-job training, thus providing another tool for skills management and tracking. The on-chain transparency, visibility, and authenticity of NFTs enable visibility into existing and emerging talent pools while concurrently lowering the risk and related cost of a misfit between candidate and employer. And for skilled trade workers, NFTs can facilitate not only job-ready skills, continuous training, and the interplay of learning, but also remunerate them to eventually become trainers and contributors to shared industry knowledge themselves.

Learn-to-Earn: While Web3-based Learn to Earn (L2E) platforms like Rabbithole and Proof of Learn are currently focused on encouraging and driving blockchain-based skills, training for trade skills would also be a good candidate for this gamified learning approach. Employers seeking job-ready candidates can pool resources to develop metaverse parcels into common learning centers and hands-on job sites, using token rewards to incentivize prospects in pursuing baseline training. Once candidates achieve basic job-ready skills, each employer can issue additional tokens to encourage and augment company-specific training. As these ecosystems of training and continuous learning evolve, industries and their member employers can consider creating learning DAOs (Decentralized Anonymous Organizations) to identify industry best practices and standardize and streamline training.

The metaverse holds tremendous potential to address trade labor and skill shortages. In the short term, it can help deliver career exploration and awareness to individuals unfamiliar with skilled labor opportunities. In addition, offering training solutions in highly interactive, immersive, and gamified environments can give workers realistic yet safe access to continuous applied training, upskilling and cross-skilling. Lastly, if done correctly, trade skills training in the metaverse will help grow remote worker engagement for operating robotics across industries, eventually redefining the very meaning of a tradesperson.

This article was written in partnership with Realm Academy.

References:

Graham, M. 2021. “Why the metaverse matters,” Boardroom, December 7.

Latham, S. and Braun, M. “It’s now or never,” Inside Higher Ed, June 1.

Maurer, R. 2022. “Record 4.5 million workers quit in November,” SHRM: Talent Acquisition, January 4.

Muro, M., Maxim, R. and Whiton, J. 2019. “Automation and artificial intelligence: How machines are affecting people and place,” Brookings Institute, January 24.

Schroeder, R. 2021. “Tech trends in higher ed: Metaverse, NFT and DAO,” Insider Higher Ed, December 1.

Salandro, V. 2021. “HBI: Skilled Labor Shortage at ‘Crisis Level,’ Builder, November 4.

Whitford, E. “State funding hit lands on 2-year colleges,” Inside Higher Ed, March 23.