The scarcity of skilled labor has become an urgent topic for equipment rental companies. Learn strategies to effectively manage the challenge and ensure business growth.
The equipment rental market is a dynamic industry influenced by many of the same forces and trends that are challenging adjacent sectors. One of the universal struggles affecting businesses today is a lack of skilled workers.
Combined with equipment scarcity, this issue has required some creative solutions from leading organizations. One of these includes leveraging capital these businesses would have allocated for new machines to purchase entire companies.
“Many organizations are buying other rental companies because those organizations have the fleet they need,” said Josh Nickell, Vice President of the Equipment Segment at the American Rental Association (ARA). “We had more ARA members acquired by other members last year than the previous five years combined.”
In many industries, it is assumed that acquisitions inevitably lead to layoffs or other reductions in force. However, Nickell reports that due to the scarcity of skilled labor in the current market, organizations are maintaining current staffing levels and adding more personnel when possible.
“Sometimes when mergers and acquisitions happen, you lose large swaths of the team, but rental companies need everyone to be able to keep running the business as it’s growing,” he said. “With the shortage of skilled labor, keeping the staff is critical to a successful acquisition.”
Maintaining Industry Growth
Accounting for the acquisition activity, the sheer number of rental equipment companies continues to grow.
“We are still at record levels of membership.” said Nickell. “The industry is still growing despite that acquisition cycle we’ve seen.”
That growth is driving the continued demand for skilled workers, the pool of which is not expanding to keep up with current needs.
“Nobody really grows up thinking they’re going to get into the equipment rental industry,” said Nickell. “They just fall into it somehow. They’ve got a relative, or they grew up on a farm working on equipment. So, once you get that person, then it’s critical to upskill them and keep them in the industry.”
One of the ways in which organizations can retain and upskill employees is through industry certifications.
“We launched our first certifications at ARA for entry-level equipment rental employees in the last year,” Nickell said. “We have one for service technicians and one for sales and marketing. They are true certifications. It takes about 40 hours of coursework to complete the certifications. It’s broken up into small pieces so anybody could go through it, and at the end they have a true rental education.”
Strategies to Manage the a Skilled Labor Scarcity
Nickell recommends a multi-phase approach to recruiting that includes not only long-term and creative strategies but also a checklist of local resources. These include:
- Military recruitment office or local military base
- High schools
- Community colleges
- Vocational or trade schools
- Workforce re-entry programs
- Employment portals like ARARentalWorks.com
- Word of mouth, friends and family recommendations
- Entry-level certifications
- Upskilling and mentorship
While the scarcity of skilled labor is a growing challenge for equipment rental businesses, organizations are adopting innovative strategies to maintain their growth. As the industry continues to expand, the demand for skilled workers outpaces the available talent pool. To address this, industry certifications and a multi-phase recruitment approach, recommended by experts like Nickell, are being employed.
To learn more about these strategies and how your rental business can navigate the skilled labor scarcity, rapid technology adoption, and equipment shortages, download the full Rental Report from Texada Software today.
September 2, 2024
5 minutes read
