The construction industry is facing a severe labor shortage, especially for large, complex projects like data centers, energy facilities, and advanced manufacturing plants. Here’s what you need to know:
Without addressing these challenges, delays and cost overruns will continue to impact critical construction projects.
Construction Industry Staffing Crisis: Key Statistics and Workforce Challenges 2024
The construction industry is grappling with a workforce crisis that’s hitting large-scale projects like data centers, energy facilities, and advanced manufacturing particularly hard. A mix of aging workers, regional labor shortages, and fierce competition with other industries has created a perfect storm, affecting every phase of these massive undertakings.
The construction sector is facing a demographic shift that’s hard to ignore. The percentage of construction workers aged 55 and older has nearly doubled in the past two decades, rising from 11.5% in 2003 to 22% in 2023. This aging workforce is a ticking clock, especially for specialized roles like electricians - 30% of union electricians are nearing retirement, and with apprenticeships taking four to five years to complete, replacing their expertise is no small task.
And the pipeline? It’s alarmingly thin. For every new skilled tradesperson entering the field, there are 20 open positions waiting to be filled. Compounding the issue, vocational training struggles to attract younger talent, with 74% of individuals aged 18 to 20 steering clear of these career paths. This leaves critical knowledge gaps on construction sites.
"The problem is so acute that 83 percent of construction workers themselves list inexperienced workers as the largest safety concern."
- Ezra Greenberg, Erik Schaefer, and Brooke Weddle, McKinsey & Company
Adding to the urgency, the U.S. nonresidential construction workforce needs to grow by 300,000 to 600,000 workers annually just to keep up with infrastructure demands.
Construction projects are increasingly shifting away from traditional urban centers to smaller markets like Phoenix, Austin, and Raleigh/Durham. While these areas offer more land, they often lack the skilled labor needed for large-scale projects. Some projects, like the Stargate data center in Abilene, Texas, are even more remote, requiring extensive relocation efforts that drive up costs.
"Because of the shortage of subcontractor labor in places like Texas, companies that need the labor force and have more capital funding than healthcare companies are soliciting subcontractors directly from healthcare job sites."
- Daina Pitzenberger, Senior Vice President, JLL
In some cases, companies are taking extraordinary measures to attract and retain workers. For example, the University of Vermont Health System built 180 housing units and a child-care center to support its employees in a region with limited infrastructure. For construction firms, this translates to added expenses like relocation packages, sign-on bonuses, and even temporary housing.
Federal policies like the Bipartisan Infrastructure Law, the Inflation Reduction Act, and the CHIPS and Science Act have unleashed a wave of competing demand for skilled labor. Industries such as infrastructure, energy, and high-tech manufacturing are now vying for the same limited pool of specialized tradespeople.
The renewable energy sector alone is expected to grow rapidly, with solar electric generation employment projected to soar by 275.9% and wind by 115.1% by 2033. These booming industries are pulling talent away from traditional construction roles.
While construction wages rose by 7.9% between 2019 and 2021, they couldn’t keep pace with the 12.6% increase in transportation and warehousing during the same period. Other industries also offer perks like workplace flexibility and autonomy - qualities highly valued by younger workers, particularly Millennials and Gen Z.
"Construction and manufacturing, specifically, may experience strong competition for entry-level skilled-trades talent."
- Ezra Greenberg, Erik Schaefer, and Brooke Weddle, McKinsey
The global renewable energy sector will need an extra 1.1 million blue-collar workers by 2030 to build wind and solar plants. At the same time, the data center boom is intensifying; by 2030, these facilities could consume 9% to 12% of total U.S. electricity generation. Add in the growth of semiconductor manufacturing, and it’s clear that construction firms are competing not just with each other, but with entire industries for skilled talent. These pressures highlight the urgent need for workforce strategies, which are explored in the next section.
When it comes to staffing large-scale construction projects, the workforce shortage is only part of the story. Specific hiring challenges add another layer of complexity, making it difficult to meet the demands of these high-stakes endeavors.
The need to rapidly hire specialized workers often creates a tough balancing act between speed and quality. This can lead to safety risks or hiring individuals who aren’t fully qualified. For example, in August 2024 alone, there were 370,000 job openings - almost double the number of hires made that month. The problem is especially pronounced in specialized trades. A staggering 91% of employers report struggling to find candidates for critical roles like project managers, superintendents, and electricians. Positions requiring advanced skills, such as pipefitters, welders, surveyors, and estimators, are even harder to fill than entry-level jobs. Traditional hiring methods often fall short when faced with the rapid, large-scale recruitment needs of these projects.
"The problem is most acute for occupations requiring specialized training or prior construction experience."
- Ken Simonson, Chief Economist, Associated General Contractors of America
Even when job postings attract applicants, many candidates lack the skills or certifications required for complex construction work. A survey revealed that 57% of respondents found applicants were underqualified or lacked necessary licenses. This forces hiring managers to spend valuable time sorting through unqualified candidates, delaying the process further. Adding to the challenge, 92% of U.S. construction firms report difficulties finding pre-screened, qualified workers. Job boards typically draw active job seekers, but the most skilled tradespeople - those with the expertise for these roles - are often passive candidates. This mismatch makes it even harder to hire quickly and effectively. Beyond finding qualified workers, retaining them over the long haul is another significant hurdle.
Retention becomes a major issue for multi-year construction projects. With a 4.5% separations rate as of February 2024, firms are frequently forced to rehire, which disrupts project timelines and increases costs. Workers today are looking for more than job stability - they value flexibility, autonomy, and supportive management. Compounding this issue, other industries like transportation and warehousing have seen faster wage growth - 12.6% between 2019 and 2021, compared to construction's 7.9%. These sectors often offer better work-life balance, making it harder for construction firms to compete for talent. On top of that, with 44% of current skill requirements expected to change within the next five years, companies need to invest in ongoing training to keep workers engaged and prepared for evolving demands. Without addressing these retention challenges, the recruitment struggles only intensify, creating a cycle that’s difficult to break.
Tackling staffing challenges in construction demands a mix of targeted training and thoughtful recruitment strategies. By combining workforce development programs with proactive hiring plans, firms can build a steady talent pipeline and keep projects on track.
Apprenticeships and trade-specific training programs are effective tools for addressing skill gaps. In 2023, contractors poured over $800 million into trade and specialty programs. These efforts are showing results. For instance, the Arizona chapter of the Associated General Contractors (AGC) ran an Industry Readiness Program in 2021, offering 10 weeks of on-the-job training. Out of 121 participants, 19 apprentices advanced to journeyman status that same year. Similarly, the Idaho Highway Construction Workforce Partnership launched a Heavy Equipment Operator Training program in 2022, boasting a 92% graduation rate, with 80% of graduates securing jobs in the construction industry.
Upskilling current workers is another way to bridge internal skill gaps. With 91% of construction leaders highlighting the growing need for digital skills, cross-training programs in areas like data modeling and cloud computing help employees grow while addressing workforce shortages. Some companies are even leveraging AR and VR to accelerate safe and efficient upskilling.
"Exposing the current workers to skilled trades through training and formal apprenticeship programs may be useful in filling open skilled jobs." - Michelle Meisels, Principal, Deloitte Consulting LLP
Skills-based hiring is also gaining traction. Instead of focusing on formal credentials, this approach emphasizes practical competencies. According to McKinsey & Company:
"A skills-based perspective is key to tapping into the talents of the 106 million workers who have built capabilities through experience but whose talents are often unrecognized because they don't have a four-year college degree"
This method not only broadens the talent pool but also boosts retention rates by 25%. Combining training investments with proactive hiring strategies helps firms avoid costly project delays.
To complement workforce development, early hiring planning ensures adequate staffing when projects ramp up. Waiting until a project starts to recruit can lead to significant delays. Labor shortages have been linked to project timeline extensions of 20% to 25%, making proactive hiring a critical step. For more insights, check out this guide on construction project delivery.
Lean construction practices can also streamline planning. Digital tools help project managers optimize labor allocation by analyzing critical paths and providing early performance insights. This allows teams to address small issues before they escalate into major setbacks.
Simplifying onboarding is another way to secure talent quickly. A lengthy hiring process can drive candidates to competitors offering faster decisions. Streamlining interviews and onboarding reduces this risk, ensuring firms can lock in skilled workers in a competitive job market.
Specialized recruitment firms bring deep industry knowledge and networks of pre-screened candidates, addressing a key challenge - 92% of U.S. construction firms report difficulties in finding qualified workers. These firms can cut time-to-hire by up to 60% using AI-driven sourcing and predictive analytics.
iRecruit.co is a standout example, focusing on talent acquisition for critical sectors like data centers, infrastructure, energy, and advanced manufacturing. Their streamlined process includes pre-qualified candidate screening and expertise in technical recruitment. Flexible pricing options, including success-based fees (payable only upon a successful hire), allow firms to scale efforts without hefty upfront costs. They also offer a 90-day search credit for replacements, reducing the risk of bad hires.
Recruitment firms are especially effective in promoting skills-based hiring. By assessing candidates through practical evaluations - like BIM analysis or mock bids - they ensure new hires are ready to contribute immediately, even for the most complex projects.
The construction industry faces a daunting challenge: by 2031, over 40% of its workforce is expected to retire. Quick fixes won’t solve this. Instead, the focus must shift to building a steady, long-term pipeline of skilled workers. This means creating partnerships between education, government, and private companies to develop talent before projects even begin.
Collaborative training initiatives are proving to be a reliable way to create a sustainable workforce. For example, in February 2025, New York City allocated $2.1 million to nine organizations to expand apprenticeship programs. This move highlights how public-private partnerships can scale workforce development efforts. If you're interested in more information on workforce trends, check out this jobs and workforce guide.
"Apprenticeships provide the city's diverse talent with industry-valued experience, while earning a good wage, learning in-demand skills, and giving employers access to the high-quality talent they need to thrive." - Abby Jo Sigal, Executive Director, NYC Talent
These partnerships go beyond just training - they address real-life challenges like transportation and childcare, which can otherwise hinder program completion. The "Identify, Train, Place" model is particularly effective, creating a seamless process that transitions trainees directly into jobs. With about 86.8% of infrastructure workers needing some form of on-the-job training, these programs are vital for preparing workers and ensuring the industry has the talent it needs for the future.
Fixing workforce shortages isn’t just about teaching skills - it’s also about changing how people see construction as a career. Today’s younger workers, especially Gen Z, want clear career paths, flexibility, and open communication. While infrastructure jobs already offer 30% higher wages for lower-income workers compared to the national average, companies need to highlight opportunities for growth and work-life balance to stay competitive with industries like tech and healthcare.
Career progression is key. Companies that prioritize internal mobility - by promoting from within and encouraging employees to learn new skills - are 98% more likely to retain top talent. This means showing workers how they can move from entry-level roles to leadership positions, like project management or executive roles. Offering benefits such as safety training, flexible schedules, and tuition assistance also makes construction careers more appealing to those who might otherwise look elsewhere.
Solving workforce challenges also means tapping into underrepresented groups who have historically been excluded from construction. Currently, women make up just 30% of the construction workforce, with even fewer in skilled trades. The industry is also predominantly White (88%) and male (89%). This leaves a huge opportunity to engage overlooked talent pools, including women, veterans, immigrants, neurodivergent individuals, and formerly incarcerated workers.
One way to expand the talent pool is through skills-based hiring. By focusing on what candidates can do - rather than requiring formal degrees - companies can access the 106 million U.S. workers who have developed skills through experience but lack a four-year college degree. Organizations like Homeboy Industries have shown how formerly incarcerated individuals can thrive in construction when given proper training and support.
However, inclusion isn’t just about hiring - it’s about creating a workplace where everyone feels they belong. Employees who are satisfied with their company’s diversity and inclusion efforts are far more likely to stay for over five years. And with 44% of current infrastructure skill requirements expected to shift by 2028, having diverse teams is crucial. Different perspectives help companies adapt to evolving technical needs and tackle complex projects more effectively.
Large-scale projects require precise staffing to avoid delays and escalating costs. With 80% of construction firms reporting project delays due to worker shortages and labor costs sometimes doubling compared to prepandemic levels, addressing these challenges demands early workforce planning, strategic partnerships, and access to specialized talent when needed. Success hinges on thoughtful preparation and agile recruitment strategies that align with project demands.
Take early planning, for instance. In January 2024, a global oil and gas company used analytics-based modeling to estimate workforce needs for a $10 billion program. This approach allowed them to demobilize 25% of their team during final delivery stages, reallocating those professionals to other projects. This example highlights how analytics can optimize workforce planning - ensuring the right number of skilled workers at each phase while avoiding costly overstaffing or productivity losses due to shortages.
But even with the best planning, unfilled positions remain a critical issue. With 94% of firms reporting openings for hourly craft workers, speed is essential. Specialized recruitment services, like those from iRecruit.co, can quickly deliver qualified candidates - often within 24–48 hours for urgent roles. For complex projects in areas like data center construction, energy infrastructure, or advanced manufacturing, having a recruitment partner who understands niche requirements - such as safety-certified welders or bilingual supervisors - can be the difference between meeting deadlines and falling behind.
Looking ahead, the industry faces a looming talent crisis, with nearly 40% of the workforce set to retire by 2031. To navigate this challenge, companies must invest in workforce development, diversify their talent pools, and leverage specialized recruitment solutions. Without these measures, firms risk ongoing delays, budget overruns, and missed opportunities in an increasingly competitive landscape.
Construction companies face a growing challenge as many seasoned workers approach retirement. To ensure the industry thrives, businesses need to focus on attracting younger talent and bridging the skills gap. This starts with creating recruitment campaigns that showcase the industry’s potential and modernize its image. Highlighting benefits like competitive pay, clear career growth opportunities, and a strong company culture can make the field more appealing to the next generation.
Another critical step is investing in training and upskilling programs. These initiatives not only prepare new hires to meet industry demands but also help address existing skill shortages. Partnering with schools and vocational programs can create a steady pipeline of future talent, ensuring workforce stability over time.
Embracing technology is another way to appeal to younger professionals. Tools that streamline operations and improve jobsite efficiency not only enhance productivity but also make construction careers more attractive to tech-savvy workers. By focusing on these strategies, construction companies can secure a skilled workforce ready to tackle the demands of large-scale projects.
Partnering with recruitment firms that specialize in construction staffing offers clear advantages for large-scale projects. These firms excel at swiftly identifying and placing skilled workers, which is especially valuable given the ongoing labor shortages in the industry. Thanks to their vast networks and targeted recruitment methods, they can fill even the most specialized roles in areas like data centers, energy, and advanced manufacturing.
Beyond just hiring, these firms also assist with workforce planning and retention strategies. This ensures that projects stay on schedule and meet the required skill levels. By connecting companies with a larger pool of qualified candidates, they help minimize delays, enhance workforce reliability, and keep projects on track - both in terms of timelines and budgets. For today’s construction challenges, such partnerships offer a smart way to meet staffing demands effectively.
Workforce development programs play a key role in addressing skill shortages in the construction industry. These programs focus on offering tailored training and education to enhance workers' qualifications and capabilities. Often, they involve collaborations with educational institutions to attract fresh talent and raise awareness about the opportunities in construction careers. At the same time, many companies run in-house training initiatives to help current employees develop new skills.
By creating focused training pathways for crucial roles in sectors like energy, data centers, and advanced manufacturing, these programs help maintain a steady flow of skilled professionals. They also boost employee retention by offering clear career advancement opportunities and improving workplace conditions. Prioritizing workforce development is critical for meeting the demands of large-scale projects, ensuring safety standards, and tackling the persistent labor shortages in the construction sector.
