The construction industry is facing a severe workforce shortage. As of February 2024, there were 456,000 unfilled U.S. construction jobs, and by 2026, an additional 499,000 workers will be needed to meet demand. This shortage is delaying projects, increasing costs, and reducing productivity.
Key challenges include:
To address these issues, companies must:
Without a proactive approach, labor shortages will continue to disrupt projects and strain budgets.
Construction Workforce Crisis 2024: Key Statistics and Challenges
Creating a detailed workforce plan is essential for keeping projects on track and within budget. The goal is to align specific roles with specific project phases, ensuring that professionals like electricians, MEP specialists, and project managers are available exactly when their expertise is needed. Without this precision, overlapping crews can lead to inefficiencies and reduced productivity.
Effective planning begins with understanding the unique aspects of your project: contracting model, complexity, and execution strategy. For instance, a $1 billion project under an EPC lump sum turnkey contract might only require 70 team members, while the same project using an owner-integrated approach could demand as many as 250 people. In January 2024, a global mining company managing a $15 billion portfolio used analytics to predict workforce needs. Their analysis revealed they needed three times their current owner team size, prompting a complete overhaul of their hiring and onboarding strategies.
"A world-class project owner team consists of the right number of people with the right expertise and experience deployed in every project function at every point during the project."
– Shu'aib Mahomed, Małgorzata Olszańska, and Maksim Varshavskiy, McKinsey & Company
Mapping out role-based staffing needs is a critical step before recruitment. This process involves identifying every role required throughout the project's lifecycle. Large commercial and infrastructure projects often demand a wide range of expertise, including project managers, estimators, schedulers, MEP specialists, electricians, metal fabricators, and professionals with digital skills. Since 2019, demand for metal fabrication skills has surged by over 40% due to the growth of infrastructure projects. Meanwhile, 91% of industry respondents agree that digital skills are now essential for success in the field.
Staffing requirements should be broken down by project phase and trade sequence. For example, if your MEP rough-in phase takes longer than planned, it can delay other trades and create costly bottlenecks. By scheduling each trade based on actual workflow rather than idealized timelines, you can avoid having crews show up before their tasks are ready. This approach ensures smooth transitions between phases and minimizes delays. For more on managing complex schedules, check out our construction project delivery guide.
Data-driven forecasting eliminates guesswork and brings precision to workforce planning. By leveraging historical production rates, cost-code labor data, and field logs from similar projects, you can calculate labor multipliers - the number of man-days required per dollar spent. A global oil and gas company applied this method to a $10 billion program, discovering they could demobilize 25% of their workforce during the final stages and reassign those professionals to other projects.
Workforce plans should adapt continuously to real-world conditions. Update forecasts weekly and integrate them with tools like Procore, Oracle Primavera, or Autodesk Build to provide stakeholders with real-time data. When project timelines shift, ensure your labor forecasts adjust automatically across all departments. Focus contingency buffers on the most labor-intensive phases of your schedule’s critical path instead of spreading them thinly across the entire project. This data-driven approach supports targeted recruitment and ensures key roles are filled exactly when needed.
The construction industry is grappling with staffing challenges in advanced manufacturing and infrastructure projects, making it incredibly difficult to find professionals for critical roles - like commissioning experts, schedulers, and systems engineers - who can dive into complex projects with minimal onboarding. These roles are essential, but sourcing the right talent is no small feat.
Traditional hiring methods often fall short when it comes to finding niche expertise. General job boards may cast a wide net, but they rarely reach the highly skilled passive candidates - those who aren’t actively job hunting but might be intrigued by the right opportunity. Instead, specialized construction platforms are your best bet. These platforms connect you directly with professionals who understand the demands of large-scale infrastructure projects.
Timing is everything in recruiting. Top-tier candidates often receive multiple offers, so responding to applications quickly - within hours, not days - can make all the difference. Combining this speed with pre-screening tools that assess both technical skills and cultural compatibility ensures your hiring team spends time only on qualified candidates.
To avoid scrambling for talent, building long-term pipelines is key. Partnering with trade schools, vocational programs, and universities creates a steady stream of emerging professionals ready to step into technical roles. In 2023 alone, contractors invested over $800 million in trade and specialty training programs. These partnerships not only fill immediate staffing gaps but also position your company as a top choice for career-focused professionals. For more insights, check out our jobs and workforce guide.
Combining proactive sourcing strategies with recruitment platforms can create an efficient, streamlined hiring process tailored to your needs.
Recruitment platforms designed for construction, like iRecruit.co, take much of the hassle out of hiring for large-scale projects. iRecruit.co specializes in roles like project managers, schedulers, MEP specialists, and commissioning experts, ensuring you’re connected with recruiters who truly understand the technical demands and cultural nuances of mission-critical positions. Plus, their success-based pricing model means you only pay when you make a successful hire - no upfront costs, no financial risk.
The platform simplifies the hiring process with pre-qualification tools. Every candidate undergoes thorough technical evaluations, experience checks, and cultural fit assessments before they even reach your desk. This saves hiring managers time and ensures that only the best candidates make it into your pipeline.
iRecruit.co also handles administrative complexities, such as relocation logistics, visa processing for international hires, and multi-state compliance requirements. This is especially valuable for infrastructure projects that require hiring across different geographic locations. By taking care of these details, project leaders can focus on execution instead of paperwork.
With plans ranging from no monthly fees for single roles to scalable packages for multiple hires, iRecruit.co offers flexible solutions tailored to your specific project needs - without locking you into rigid contracts.
Managing large-scale projects calls for staffing strategies that can adapt to changing demands, reduce risks, and keep costs in check.
A striking 86% of executives agree that managing external contributors is crucial, but only 33% feel adequately prepared to do so. This disconnect often becomes a stumbling block for projects that require agility and precision in workforce planning.
Using project-based contracts allows teams to expand or shrink in sync with different project phases, ensuring resources are used efficiently. For example, in January 2024, a global oil and gas company successfully managed a $10 billion program by adopting an analytics-driven staffing model. This approach enabled the company to cut its team by 25% during the final delivery phase, freeing up professionals for other tasks and boosting overall efficiency.
"Subcontractors and temporary labor solutions can provide flexibility to scale up quickly without long-term commitments." – Caitlin Delk, 619 Recruiting
Analytics-based planning takes the guesswork out of staffing by using benchmark productivity metrics to create precise mobilization schedules. For instance, a $1 billion project under an EPC lump sum turnkey contract might need just 70 people during execution compared to 250 for an owner-integrated setup. This kind of planning ensures that teams are right-sized for each phase.
While project-based hires reshape the core team, on-demand talent fills critical skill gaps as they emerge, offering a seamless way to address immediate needs.
On-demand talent pools and subcontractor networks are invaluable for accessing specialized skills without committing to full-time hires. Maintaining a "Virtual Talent Bench" - a pre-screened pool of freelancers and external workers - enables companies to quickly respond to evolving project requirements. For more tips on building such networks, check out our jobs and workforce guide.
The construction industry, by nature, operates in a project-based, decentralized, and fluid manner. Employees often rotate between companies or sectors, and subcontracting is more common than internal hiring. This makes coordinating external teams a critical skill. With 94% of construction firms struggling to find workers and a record 456,000 unfilled positions as of February 2024 - the highest in 20 years - traditional hiring methods alone fall short.
To address these challenges, companies need to shift from traditional workforce management to a more orchestrated approach. This involves aligning a mix of contractors, gig workers, and professional service firms with strategic goals. It also requires auditing subcontractors and staffing agencies for quality, safety, and compliance, as well as adopting a skills-based approach rather than focusing solely on roles. Research shows that companies using a skills-based model are 98% more likely to retain top talent.
"The industry is project based, decentralized, and fluid by nature. Employees rotate not only within companies but also across the sector, and resources are often subcontracted." – Cristina Alonso et al., McKinsey & Company
Planning ahead during the pre-construction phase can help spot potential talent gaps early. By evaluating whether upskilling current employees, subcontracting, or hiring contingent workers is the best solution, companies can proactively address capacity issues and keep their projects on track.
Hiring skilled workers is only the beginning; keeping them requires a commitment to their growth and a clear path forward. With over 40% of the U.S. construction workforce expected to retire by 2031, companies face an urgent need to hold onto the talent they've worked so hard to attract, especially as many firms struggle to fill project manager roles. The solution lies in shifting from short-term, reactive training to a systematic approach that integrates skill-building into everyday operations and provides clear career progression. This approach sets the stage for programs that focus on upskilling and cross-training.
Technical expertise alone doesn’t cut it anymore. While hard skills remain essential, soft skills like negotiation, conflict resolution, and stakeholder management are now just as critical for project leaders who deal with increasingly complex environments. With frequent collaboration across diverse teams, these interpersonal abilities can make or break a project.
On top of that, digital skills are becoming a must. Training in areas like analytics, Building Information Modeling (BIM), and automation not only equips teams for the future but also improves current project efficiency. Cross-skilling and job rotation programs offer employees new challenges and growth opportunities within the company, reducing their urge to seek opportunities elsewhere. For more workforce strategies, check out our jobs and workforce guide.
There’s proof these programs work. For instance, Idaho’s Heavy Equipment Operator Training program, launched by the Idaho Highway Construction Workforce Partnership, boasted a 92% graduation rate in 2022, with 80% of graduates landing jobs immediately. Similarly, Arizona’s AGC Industry Readiness Program trained 121 participants in 2021, with 19 apprentices advancing to journeyman status. These initiatives mix classroom learning with hands-on fieldwork, ensuring new skills are directly applied.
"The academy was key to supporting the transformation - and genuinely embedding the changes in the company." – Participant, Asian Engineering and Construction Company
Safety training remains a top priority, accounting for nearly 60% of workforce development budgets. Companies that adopt a skills-based talent management approach are 98% more likely to retain their top performers, proving that investing in training directly impacts employee loyalty.
Training alone isn’t enough; performance incentives play a crucial role in keeping employees motivated. Linking rewards to specific milestones - like design completions, construction phases, or successful commissioning - keeps specialized workers committed during critical project stages. Profit-sharing plans and performance bonuses also drive productivity by giving employees a tangible stake in the project’s success.
Safety-related incentives show employees that their well-being matters. Rewards tied to maintaining clean safety records or following strict protocols demonstrate the company’s commitment to its workforce beyond just output. Immediate recognition, rather than waiting for annual reviews, reinforces this sense of value and keeps employees engaged.
Digital tools like augmented reality (AR), virtual reality (VR), and cloud-based dashboards are transforming performance tracking and training. These tools allow for safe, virtual practice sessions and real-time progress monitoring, cutting down the time it takes for workers to become fully productive. For example, digital twins let employees simulate complex systems in a virtual environment before stepping on-site, reducing onboarding time from months to weeks. Additionally, cloud dashboards help teams see how their work impacts key metrics like quality, budget, and schedules, which often trigger performance rewards.
"Recognition is in response to something earned or deserved. Appreciation is something we all need to hear regularly." – CLA
Combining structured training programs with transparent incentives creates an environment where employees feel valued and see a future with the company. With 91% of employers predicting challenges in finding qualified construction talent by 2025, retaining your current workforce is no longer optional - it’s essential for project success. These strategies ensure your best workers stay engaged and prepared to tackle the complexities of modern construction projects.
The construction industry is grappling with a massive workforce challenge. As of February 2024, there are 456,000 unfilled construction jobs in the U.S., with an estimated 499,000 additional workers needed by 2026 to meet demand. To navigate this labor crunch, successful companies are moving away from reactive hiring practices and adopting data-driven workforce strategies. This involves forecasting workforce needs - skills, timing, and numbers - across every phase of their projects.
Labor shortages are already causing significant disruptions, with 61% of construction firms citing them as a direct cause of project delays. Adding to the urgency, over 40% of the current workforce is expected to retire by 2031. Addressing this issue requires more than traditional recruitment methods. Companies need to diversify their talent pools, actively seeking out women, veterans, and other underrepresented groups. Collaboration with industry partners, educational institutions, and government programs is also key. For more strategies, check out our jobs and workforce guide.
Retention is just as critical as recruitment. Firms that adopt skills-based talent management approaches are 98% more likely to retain their top performers. This goes beyond offering competitive salaries - it means investing in upskilling programs, performance incentives, and fostering a workplace culture that prioritizes safety, flexibility, and transparency. In fact, in 2023, the industry allocated nearly 60% of its workforce development budget to safety training, highlighting its commitment to employee welfare.
Finally, technology is playing an increasingly important role in workforce management. Digital tools are becoming indispensable for handling the complexities of modern megaprojects and adapting to shifting skill requirements. With 44% of current job roles expected to evolve within the next five years, these technologies are crucial for staying ahead.
To figure out staffing needs, start with strategic workforce planning. This means analyzing the project's scope, pinpointing the skills required, setting timelines, and identifying potential risks. Break the project into phases, and determine the expertise needed for each stage, along with when those resources should be brought on board.
Using tools like the Critical Path Method can help you match staffing levels to key project milestones. Also, keep in mind external factors like talent shortages and market availability. This approach helps you predict workforce needs more accurately, avoid delays, and make the best use of your resources.
To predict labor demand for large commercial and infrastructure projects, focus on essential data points like market availability, trade sequencing, and historical project data (such as workforce utilization and timelines). Pay attention to broader market trends, including the availability of skilled labor and pressures on wages.
For more precise forecasting, integrate real-time labor analytics into your process. Additionally, factor in project-specific elements like the scope of work, current phase, and potential risks - such as attrition or wage competition. This approach helps create flexible forecasts that minimize scheduling risks.
To keep highly sought-after specialists committed through the end of a project, it takes more than just offering a competitive salary. A well-rounded retention approach can make all the difference. Here’s how:
Additionally, communicate openly about upcoming roles and provide meaningful incentives, such as mentorship opportunities. These steps can help specialists feel more connected, engaged, and ready to contribute to your next big project.
