Australia Is 83,000 Tradies Short. AI Adds Capacity.

Transcript

Welcome to today's Deep Dive. If you're running a trades or professional services business here in Australia, you know, like a plumbing crew or an accounting firm, the standard growth playbook is probably feeling completely broken right now. Yeah, it really is. I mean, traditionally, if you want more revenue, you just go out and hire more people, right? Simple math. Right, exactly. Just get more work, hire more people. But we're looking at this recent Kodowee Labs report today. And it basically proves that trying to hire your way to growth right now is, well, it's essentially bidding for ghosts. Bidding for ghosts is a great way to put it, honestly, because the numbers, they just back that up completely. I mean, we are structurally short 83,000 skilled tradespeople across the country right now. Wait, 83,000. That is a massive gap. It's huge. And what's wild is that the recent housing slowdown, it didn't even put a dent in it. Like the Housing Industry Association's Trades Availability Index, it is currently sitting at minus minus 0.59 for the June 2026 quarter. Okay, wait, minus 0.59. What is the actual scale there? So we have some context. Right. So anything below zero indicates a critical shortage. So at nearly minus 0.6, we're practically scraping the bottom of the barrel. Wow. Yeah. And because of that scarcity, trade prices jumped 5.1% in just the first half of the year alone. So I mean, if I'm an electrician or a builder, and my growth plan is to, you know, just chuck another ad up on the job boards, is that just a total waste of time? Because signing an apprentice today means waiting four whole years for them to finish trade school. Basically, yeah. If you rely solely on hiring to grow right now, you just run headfirst into this brutal margin squeeze. Because everyone is jacking up their prices. Exactly. The subbies you actually managed to find, they are charging you at least 5% more than they were back in January. So you end up trapped. Yeah, that makes sense. You quote the job too high to cover that new cost, and you lose it to a competitor. But if you quote it too low, you're essentially just working to pay the bank. So if a business physically cannot add more headcount, they're capped, right? Like, unless, I don't know, maybe they're currently wasting the hours they do already have. Well, that is exactly the pivot. You know, everyone thinks they have a labor problem, but they don't. They actually have a time allocation problem. Oh, interesting. How so? So the data shows trades businesses miss about a third of their inbound calls. And most of those callers, they never ring back. A third. That's just money walking right out the door. Oh, absolutely. And then you add in windshield time, you know, driving inefficiently between poorly sequenced jobs. Oh, yeah. Getting stuck in traffic across town in the ute. Right. Businesses are just bleeding billable hours all day long. So when you realize how much capacity is eaten up by logistics and missed calls, you start to see that the labor shortage is really just an admin problem in disguise. Which makes total sense when you think about how many owners are doing their quoting and invoicing at 11 p.m. at the kitchen table rather than actually being on the tools or managing sites during the day. Right. Exactly. So to fix that without hiring really expensive office staff, businesses are turning to a digital capacity lever. Like software and AI. Yeah, but you don't buy software to replace your tradespeople. You use it to clear that admin lod jam. Hold on, though. If a customer calls needing, say, emergency plumbing and they get some robotic AI voice answering the phone, aren't they just going to hang up and call the next guy on Google? How does that actually catch the revenue? See, that would have been true three years ago. But modern conversational AI, it does not sound like one of those old automated menus anymore. Oh, really? Yeah. You set up an AI phone agent and it interacts completely naturally 24-7. It can ask triage questions and literally book the appointment right into your calendar. So an after hours emergency call actually becomes a locked in job instead of just a voicemail that you check the next morning. Exactly. You wake up and the job is already booked. That's wild. But what about that windshield time you mentioned? How does software fix traffic? Well, it doesn't fix the traffic itself, but it fixes your sequencing. So you connect the software to your calendar and its routing algorithm dynamically maps out the geographic locations of the day's jobs. Ah, so it clusters them together. Exactly. It clusters the appointments by area, ensuring your crew isn't crossing the bridge three times a day. Wait, let's do the Aussie math on that for a second. A fully loaded rate for a technician, you know, covering wages, super fuel insurance that runs about $65 to $95 an hour. Right. It is not cheap to keep a crew on the road. No, it's not. So if that routing software recovers just an extra half job per tech per day across a four person crew, I mean, that's nearly $1,000 to $1,500 a week in found money. Yep. And unlike waiting four years for an apprentice to get licensed, that is capacity you can switch on this month. Yeah, because the work is already won, where it's literally already ringing your phone. You're just currently failing to catch it. Exactly. The businesses that are actually surviving this structural shortage, they are the ones who have stopped treating admin as unpaid overtime. Right. They're handing the back office over to software, freeing up their crew to do the physical skilled work that, you know, only human hands can do. It really is the most reliable way to scale when the labor pool is dry. Which leaves us with this to think about. If you aren't automating your back office right now, are you actively funding your competitor's growth? Because every time a call goes to voicemail, you're letting a perfectly good job walk out your door and straight into their labs. Instead of bidding against ghosts, it might be time to make sure you're actually answering the calls from the living. That was a Field Note brought to you by CoterieLabs. We help Australian businesses work out where AI actually pays and where it doesn't. The full write-up with every source and link is in the show notes. And if you're wondering where AI fits in your own business, there's a free two-minute scan at CoterieLabs.com.au. New Field Note every weekday.