2020 Profile of the Electrical Contractor
Date Posted: July 28, 2020
Posted In: COVID-19 Updates, Workforce,
From Electrical Contractor: Our Profile of the Electrical Contractor happens every two years. In 2020, it overlaps with the presidential election, the U.S. Census and the coronavirus pandemic. Of course, we didn’t expect that last one. Our survey asks you to take a look back at your previous year’s business. As such, our 2020 report provides a unique snapshot of the year before COVID-19 hit. For many ECs, 2019 was a good year, expanding on growth seen in our 2018 report. Many firms grew in size and revenue, and a number also expanded into more lines of work. A majority of ECs expressed strong confidence in continued economic strength over the next few years.
Those positive attitudes were based on real data points gathered from more than 1,600 readers who responded online and by mail to this year’s survey. Twice as many firms added employees as lost them in 2019. There are signs that the steady aging in the industry could be leveling off. Also, firms continue to move beyond traditional electric power/distribution into new areas, including higher percentages of ECs expanding into installations such as lighting controls, building automation and the growing electric vehicle charging industry.
Upbeat predictions could seem overly optimistic in at least the near term, given the impact massive stay-at-home orders have had on economists’ outlooks, but ELECTRICAL CONTRACTOR sees reason for hope in your responses. Notably, ECs’ confidence in the growth of the economy over the next few years persisted during the course of our survey process, even as economic conditions began shifting dramatically. Those completing the questionnaire from the second half of March into early April were every bit as positive about future business as those who responded before any coronavirus-related lockdowns began.
Aging slowdown
Perhaps the most interesting data point when it comes to EC demographics is how little things have changed. This is the first EC profile in at least a decade in which the average age remained virtually flat from the previous edition—in this case, 57.9, versus 58.2 in 2018, a statistically insignificant difference. Additionally, Figure 1, Comparison of Age Composition Over Time, illustrates the age brackets of 55-64 (37%) and 65-plus (31%) also remain essentially flat, compared to 2018 results. In fact, the combined 35–54 age ranges were the only ones to show growth, up to 29% from 26% in 2018, a statistically significant increase. This is the first time in many years that we’ve seen growth in an age group younger than 65.
Also, as has been the case in the recent past, those working in smaller companies are older than those working in larger operations, though there has been some leveling off. Average ages didn’t rise in firms with 1–4 employees (59.9) and declined among those with 1-9 employees (59.3). It did rise, though, in companies with 10-plus employees, to 55.2 from 53.8.
As in 2016 and 2018, 3% of the electrical contractors who participated in this survey are female. Women are more prevalent in larger firms (5% in firms with 10-plus employees versus 3% among firms with 1–9).
In 2018, we asked about years of experience in electrical contracting for the first time. This year’s responses mirrored those of two years ago, remaining statistically unchanged, at 32.4 years, on average (versus 32.6 years, previously). We found 5% of you have been in the industry more than 50 years—not surprisingly, 92% with that much experience are older than 65.
What has changed, however, is our respondents’ level of responsibility. Company owners and managers make up 69% of the total respondents this year, down from 77% in 2018. And a higher percentage now say their title is master electrician (14%), project manager (6%) or other (6%). In another shift from 2018, the national percentage of owners/top managers doesn’t vary by region; in the previous two surveys, Western ECs were more likely to be owners/top managers.
This year for the first time, we asked companies with three or more employees about the breakdown of the workforce between what they considered on-site electrical workers compared to those considered primarily business/office workers. The answer was a consistent 80% on-site and 20% office.
Firm size trending larger
While the majority of EC firms continue to be smaller companies, that percentage has declined significantly since 2018, as seen in Figure 2, Company Size Trended 2020 Profile vs. 2018 Profile. While 56% worked in firms of 1–4 employees two years ago, that figure has dropped to 53% in this year’s survey. Similarly, 43% were in companies with annual revenues under $250,000 in 2018, compared to 40% in 2020. However, the proportion of the largest firms has grown over the last two years, with 12% reporting organizations with 100-plus employees, versus 8% in 2018. And 11% reported annual company revenues of $10 million or more, versus 8% two years ago. A similar pattern was seen between our 2014 and 2016 reports, but 2018’s figures remained stable.
