Large general contractors (GCs) are facing a severe labor shortage, making it harder to complete high-stakes projects like data centers and semiconductor plants. Here's the situation:
Federal initiatives like the CHIPS Act have driven a 20% rise in manufacturing construction spending (as of May 2024), but staffing gaps are delaying projects and increasing costs. 80% of firms report delays, and 54% blame worker shortages.
To address this, GCs are turning to strategies like partnering with specialized recruiters, investing in upskilling programs, and leveraging technology for faster hiring. Long-term solutions include collaborating with trade schools, supporting immigration reforms, and offering better training pipelines. Fixing this problem is critical to keeping billion-dollar projects on track.
Construction Labor Shortage Statistics 2024: Key Challenges Facing General Contractors
The construction sector is grappling with a severe labor shortage. By 2025, a staggering 92% of construction firms reported difficulties in filling open positions. In February 2024 alone, there were 456,000 unfilled construction jobs - the highest number recorded in two decades. Employers are seeking candidates with the right certifications and significant hands-on experience, yet over half (57%) of firms say applicants lack the necessary skills or licenses for the roles.
The shortage is particularly pronounced in trades critical to mission-critical projects. For example, demand for metal fabrication has surged by 40% since 2019, while the need for management skills - both people management and business management - has increased by 77% and 41%, respectively. These roles require years of training and practical expertise. Ken Simonson, Chief Economist at AGC, sums it up:
"Construction projects of all types are being delayed because there aren't enough qualified workers available for firms to hire."
For large-scale contractors handling billion-dollar projects under tight deadlines, every unfilled position introduces significant risks, including delays and financial penalties. The situation is further compounded by an aging workforce, which adds another layer of complexity to the staffing crisis.
The construction industry is facing a demographic challenge. Between 2003 and 2023, the share of workers aged 55 and older nearly doubled, jumping from 11.5% to 22%. This shift means a substantial portion of the workforce is nearing retirement, taking decades of expertise with them. In 2020 alone, 3.2 million baby boomers retired - a million more than in any year before 2016.
At the same time, fewer young people are entering the trades. Federal workforce development programs continue to prioritize four-year college paths over trade education. Meanwhile, industries like tech, transportation, and warehousing are luring technical and engineering talent with promises of better flexibility and working conditions. Although construction wages rose by 7.9% between 2019 and 2021 to remain competitive, higher pay isn’t enough to bridge the gap.
The Deloitte Research Center for Energy & Industrials highlights the urgency of this issue:
"The industry faces a skills gap and loss of essential trade skills each time an employee retires without onboarding younger talent."
Adding to the problem, net migration to the U.S. dropped dramatically, from 1.06 million in 2016 to just 244,000 in 2021, cutting off a vital source of engineering and contracting talent. For major contractors, this shrinking talent pool makes staffing even harder, especially as projects grow more complex. While traditional skills are fading, the demand for workers skilled in both traditional trades and emerging digital technologies is only increasing.
Mission-critical projects demand a unique blend of skills, combining traditional trades with modern digital expertise. Skills like cloud computing (up 15%), software development (up 13%), and data modeling (up 11%) are becoming increasingly important. In fact, 91% of industry professionals agree that digital fluency is now essential for success.
These challenges are heightened by the evolving technical requirements of high-stakes projects. Facilities like data centers and advanced manufacturing plants need specialists who can handle complex MEP systems, perform real-time commissioning, estimate costs with precision, and manage intricate project schedules. Between 2023 and 2028, nearly 44% of skill requirements in infrastructure are expected to change, further widening the skills gap.
Garo Hovnanian, a Partner at McKinsey, emphasizes the difficulty of sourcing talent:
"The industry is finding it more difficult to attract the international workforce that has been an important source of talent for engineering, design, and contracting activities."
The competition for specialized labor is only intensifying. Manufacturing construction spending rose by 20% year-over-year as of May 2024, creating a fierce battle for talent. Large contractors now face a dual challenge: competing not just with other construction firms but also with tech companies that offer better working conditions and career growth opportunities for the same technical skill sets.
Labor shortages are creating significant financial challenges for contractors. Recent data shows that 88% of construction firms have raised base pay rates to attract and retain workers, often matching or surpassing previous years' increases to stay competitive. But higher wages alone don’t solve the problem. To address the skills gap, 42% of firms have also boosted their investment in training programs. This adds even more strain to already tight project budgets.
Retention is another major hurdle. Many companies report that new hires either fail to show up or quit shortly after starting. This forces firms into repeated recruitment cycles, disrupting workflows and cutting into profit margins. Combined, these rising costs and high turnover rates are making it harder to keep projects on track.
Unfilled positions also lead to project delays, which come with their own financial consequences. In the past year, 80% of construction firms experienced at least one project delay. Of these, 45% directly attributed the delays to labor shortages. Delays don’t just inflate costs - they also stretch an already fragile talent pool even thinner.
The problem is especially acute for specialized roles on mission-critical projects. These positions are consistently the hardest to fill, and when subcontractors can’t staff these roles, it creates a domino effect. Even if the general contractor has enough workers, the entire project can grind to a halt. The impact is so severe that 16% of firms have had to cancel or postpone projects entirely due to the combined pressures of labor shortages and broader economic challenges.
Traditional recruiting methods often fall short when it comes to meeting the demands of time-sensitive, mission-critical projects. That’s where specialized recruiters, like iRecruit.co, come in. They deliver qualified candidates quickly, operating on a success-based pricing model - charging 25% of the first year’s salary for a single hire or 20% for multiple roles. Plus, they offer a 90-day replacement guarantee, which helps offset the productivity losses that can reach up to 40% annually during labor shortages.
These recruiters streamline the interview and onboarding process, allowing general contractors to secure the talent they need without delay. This is especially crucial when labor shortages can stretch project timelines by as much as 25%. While external recruitment addresses immediate staffing gaps, building long-term talent pipelines within your organization ensures lasting workforce stability.
In 2023, the focus on workforce development expanded beyond technical expertise to include digital and leadership skills. Training programs now target both hard and soft skills, with demand for people management skills rising by 77% and business management skills by 41% since 2019. To accelerate learning, many companies are incorporating augmented reality (AR) and virtual reality (VR) into their training programs. These tools provide immersive experiences that help employees quickly master complex technical tasks.
For example, an Asian engineering and construction firm created a tailored training academy featuring seven modules that blended classroom learning with hands-on fieldwork, certifying more than 45 project managers. Similarly, a European EPC company overseeing a multibillion-dollar project trained over 24 employees through 500 hours of virtual instruction focused on value-engineering and integrated planning.
"Capabilities had to be developed in line with the company's strategy: after all, it's our people who deliver the strategy." – CEO of a global engineering and construction company
Internal training programs, when paired with efficient recruitment technologies, create a powerful combination for addressing both immediate and long-term workforce needs.
Digital tools are transforming the hiring process, making it faster and more efficient. Streamlined onboarding systems ensure that top candidates don’t slip away while companies finalize interview schedules. The secret lies in speeding up application reviews and simplifying interview workflows.
Skills-based hiring platforms are also changing the game. These platforms identify candidates who have developed their abilities through hands-on experience rather than formal education, opening doors to a talent pool of 106 million workers who lack a four-year degree. Companies that focus on skills over job titles are 98% more likely to retain high-performing employees.
Once hired, digital onboarding tools enhance the new hire experience by delivering consistent, comprehensive training. With nearly 60% of workforce development budgets going toward safety education and training, these platforms ensure that safety protocols are reinforced from day one. Beyond onboarding, these tools integrate seamlessly into broader workforce planning strategies, helping companies stay ahead of their staffing needs.
Quick fixes can only go so far in addressing labor shortages. To create a sustainable workforce, general contractors need to collaborate with educational institutions, nonprofits, and government agencies. This broader approach helps build a steady talent pipeline for future projects.
The U.S. Bipartisan Infrastructure Law is expected to generate 3.2 million new jobs across the nonresidential construction sector over the next decade. To prepare, firms should align their training and development programs with the types of projects they plan to undertake, such as net-zero construction or digitally advanced initiatives.
Immigration policies also play a significant role in labor availability. Monitoring these policies and advocating for workforce reforms - like expanded apprenticeship programs and increased funding for trade schools - can strengthen the industry’s talent pool. Additionally, diversifying recruitment efforts to include underrepresented groups, such as women (who currently make up just 30% of the workforce), veterans, and second-chance citizens, can significantly expand the hiring pool.
Adopting off-site and modular construction methods can further ease on-site labor demands. By treating workforce development as a strategic priority - one that requires proactive planning and executive oversight - companies can transition from short-term fixes to long-term solutions. Policy support and forward-thinking strategies are essential to closing the talent gap and ensuring the industry’s growth.
For large general contractors working under tight deadlines, the recruitment process can make or break a project. Traditional hiring methods - relying on manual paperwork, spreadsheets, and generic job boards - often lead to a flood of unqualified resumes. This scattershot approach is particularly ineffective in high-stakes environments like data centers or advanced manufacturing facilities, where precision is key. These challenges highlight the need for more efficient, technology-driven recruitment strategies.
Specialized recruitment services take a different route. By leveraging AI-assisted screening and industry-specific databases, these services evaluate candidates based on their potential performance and alignment with workplace dynamics - not just keywords on a resume. This data-driven method can slash hiring timelines by up to 40%, a critical advantage in an industry where over 80% of construction executives report difficulty filling open positions.
The contrast becomes even sharper when it comes to candidate reliability. Traditional hiring in construction is plagued by high early turnover - 50% of new hires either fail to show up or quit shortly after starting. In contrast, specialized recruiters use rigorous multi-step evaluations, including skills tests and reference checks, to ensure better long-term retention. Notably, 50% of placements through specialized services often receive assignment extensions.
Here’s a quick breakdown of how traditional recruitment stacks up against specialized recruitment approaches:
| Feature | Traditional Recruitment | Specialized Recruitment (iRecruit.co) |
|---|---|---|
| Cost Structure | High internal overhead and hidden costs from project delays | Success-based pricing (25% for a single hire, 20% for multiple roles); costs offset by 40% faster hiring |
| Candidate Quality | Generalist pool; 62% of firms report candidates lack necessary qualifications | Skills-verified talent with a focus on performance and adaptability in critical environments |
| Guarantees | Limited protection; 50% of new hires quit shortly after starting | 90-day replacement guarantee; higher retention with 50% of placements extended |
| Speed | Slow; relies on manual tracking via Excel and disconnected emails | Up to 40% faster through AI-assisted screening and pre-vetted talent networks |
| Technology | Manual paperwork and basic spreadsheets that reduce productivity | Integrated ATS, AI screening, and real-time collaboration tools |
"Companies do not hire resumes, they hire people who can perform, adapt, and thrive in a specific environment." – Systemart
For large-scale contractors, timely recruitment is not just a convenience - it’s a necessity. Labor shortages can extend project timelines by 20% to 25% and cut productivity by 40% annually. Choosing the right recruitment strategy is crucial to keeping projects on schedule and within budget.
Large general contractors are grappling with an ongoing staffing crisis. Widespread labor shortages are disrupting mission-critical projects like data centers, advanced manufacturing facilities, and infrastructure developments, leading to delays and drops in productivity. These challenges call for both immediate action and long-term strategies.
AI-powered, skills-based hiring offers a way to speed up recruitment while boosting employee retention. At the same time, upskilling initiatives help workers adapt to the growing demand for digital competencies. But solving this issue requires more than quick fixes. Long-term workforce planning is key. Partnering with trade schools, creating mentorship programs to pass on knowledge from retiring workers, and opening recruitment to underrepresented groups can establish a steady flow of skilled talent. A great example of this is Rhys Ivy Construction in Kansas City, which launched a three-to-five-week paid training program in 2024. This program combines technical certifications with financial literacy and career readiness, setting a strong foundation for new workers.
"The government's lack of investment in construction workforce programs is having a real, measurable impact on the country's ability to build infrastructure and other construction projects. These impacts include higher costs, longer construction schedules and a significant number of delayed or canceled projects."
– Jeff Shoaf, CEO, Associated General Contractors of America
For large contractors working under tight deadlines and budgets, treating labor as a strategic asset - not just an operational necessity - can be the deciding factor between a project’s success or failure. By adopting targeted recruitment strategies, investing in skill development, and focusing on long-term workforce solutions, contractors can ensure the success of their most critical projects.
Addressing the construction labor shortage calls for thoughtful, long-term efforts to create a skilled and sustainable workforce. A critical step is expanding workforce development programs, such as apprenticeships and hands-on vocational training. These programs not only help attract fresh talent but also bridge the growing skills gap as seasoned professionals retire and fewer young people pursue careers in the trades.
Equally important is enhancing recruitment and retention efforts. This means cultivating a supportive and welcoming industry culture, offering competitive pay and benefits, and leveraging technology to simplify workforce management. Collaborations with schools, trade organizations, and local communities can also play a pivotal role in showcasing construction as a viable and rewarding career path - particularly for younger individuals and those from underrepresented backgrounds. By embracing these approaches, the industry can build a workforce capable of tackling future challenges head-on.
Digital skills play a crucial role in the success of high-stakes construction projects. They help boost efficiency, improve safety, and streamline project management. Workers who are skilled in technologies like Building Information Modeling (BIM), project management tools, and automation software can simplify workflows, enhance team collaboration, and ensure precise planning - factors that are especially important for complex builds like data centers or large-scale infrastructure projects.
Beyond operational benefits, digital proficiency makes the construction industry more appealing to younger, tech-savvy workers. This is vital for addressing workforce shortages driven by an aging labor force and waning interest in traditional trades. These skills also contribute to better risk management, compliance with regulations, and adherence to strict safety protocols - key elements in keeping projects on schedule and within budget. In a rapidly changing industry, developing a workforce equipped with digital expertise is essential for tackling staffing challenges and ensuring project success.
The construction industry is grappling with a major challenge: an aging workforce. With nearly 20% of construction workers now aged 55 or older, a significant portion of the industry's seasoned professionals are nearing retirement. This shift threatens to take with it years of expertise and critical institutional knowledge, leaving a gap that's hard to fill.
Adding to the difficulty is the ongoing shortage of skilled labor, especially in roles that demand specialized knowledge. While construction employment has seen some growth in recent years, many companies are finding it tough to attract younger workers to replace those retiring. Tackling this issue is crucial - not just for maintaining the quality of projects, but also for meeting deadlines and ensuring the smooth completion of essential work.
