We offer you and your projects’ partners a win-win solution based on a solid, long-lasting, fruitful relationship
You outsource the mundane & concentrate on what you do best
This article is part of a blog series on the labor shortage in the construction industry. To overcome the labor shortage, the industry will have to automate its processes and use various technologies to boost efficiency, strengthen employee retention, attract the younger generation, and make recruitment attractive by offering competitive wages and benefits.
According to the Future of Construction report, the global construction market is expected to grow by US $4.5 trillion by 2030 to reach US $15.2 trillion.
Just four countries — China, India, the US, and Indonesia — will account for almost 60% of this growth.
The two growth segments in the construction industry are the residential construction markets and the accelerated infrastructure investment supported by large stimulus programs aimed at boosting economies.
According to the Bureau of Labor Statistics in the USA, construction job openings reached 459,000 in November 2023. In September 2024, they were approximately 442,000, a bit lower than last year. Despite this, contractors continue to experience a skilled labor shortage.
Excess household savings across the developed world represent 10% of GDP in North America and will boost growth across the residential construction market.
Increased demand for construction will accelerate infrastructure investment stimulated by government programs to develop their economies.
Global segments, major infrastructure, and manufacturing projects are flowing, fueling the growth in those segments, and creating more challenges to the skilled workers' crisis. So, in 2025, labor shortages will still be a major concern for the industry.
To overcome the labor shortage, construction introduces more technology. PBC today claims that the adoption rate in the use of digital technologies has increased. The industry is behind the times and worries that it will not be up to the challenge when digital knowledge is needed.
Very few people In the sector believe the construction industry has finally found its “digital footage”, so digitization could be more developed in some areas of construction than others.
In 2025, the world may bounce back from the economic slowdown of the last few years. If this happens, it will allow the construction industry to continue its transformation through technological innovations. If the economy does not pick up, investment in digitalization is still needed to close the labor gap.
An aging workforce and a high turnover rate of new workers constitute critical issues. Labor shortages impact project risks in planning, budgeting, and logistics.
Not having enough labor in the industry negatively affects the construction projects in home building, commercial construction, and infrastructure updates as they can be delayed or discarded.
Safety is a critical challenge for the labor crisis in construction because a lack of skilled workers, added to the dangers of the industry, can lead to increased accidents and injuries, potentially straining resources and further exacerbating the labor shortage.
Three factors add to the difficulty of finding additional labor on top of the normal hiring demand to respond to the growth challenge:
Since the pandemic, people increasingly worked from home, which has increased demand for larger housing. On top of this, population growth means that the demand for affordable housing is constantly increasing. As mentioned, the hiring rate of the industry is stagnant or declining, which makes the issue worse as time goes on.
The worldwide population growth requires more hospitals, schools, and malls, leading to more investment in large projects with budgets over one hundred million or more, which again exacerbates the labor crisis.
The US allocated $1 trillion for infrastructure in 2021. This money can boost clean energy that produces little pollution or greenhouse gases. It comes from renewable sources, like solar and wind, or energy efficiency measures.
Following two bad seasons of hurricanes, clean energy remains a high priority in the construction industry.
The labor shortage across the three categories means an ongoing battle to find skilled workers.
The US construction industry increased jobs by more than 270,000 year-over-year between 2023 and 2024. It is exceedingly difficult to find skilled workers to fill vacant positions.
For example, the US National Science Foundation mentioned a lack of skilled labor is the main reason for the delays in Regional Class Research Vessel, in Louisiana, and the Antarctic Infrastructure Modernization for Science's (AIMS) Vehicle Equipment and Operations Center.
Delays affect scheduling and cause budget overruns as more hours are needed to finish projects. Tired workers make mistakes and do not perform safety and quality checks, increasing the risk of accidents and delays.
According to the Bureau of Labor Statistics, US construction represents the third-highest projected employment growth rate of any industry.
With contractors struggling to find labor, such significant growth could mean even bigger delays on projects across sectors and drive up construction prices.
Construction companies should acquire larger projects to cope with the crisis. If they do not, they will continue to deliver delays in smaller projects like infrastructure updates.
Companies need larger projects to cope with labor shortages because they can leverage all their resources to maintain profitability.
Prioritizing larger projects can avoid smaller, critical infrastructure projects being delayed or abandoned due to lack of workforce.
With a limited labor pool, construction companies should prefer projects with comfortable budgets to maintain profitability, and staff, and manage resources better than small projects as they require specialized teams for specific tasks simultaneously, in different locations.
Small projects are not always financially viable as labor costs continue to rise due to shortages.
Addressing the construction labor shortage requires a strategic holistic approach to attract and retain skilled workers, providing training and coaching, and inserting technology i workflows to improve efficiency.
The main cause of the labor shortage is to find the right skills to compensate for an aging workforce ready to retire. This is exacerbated by the fact that young people do not embrace construction careers.
Education and training gaps due to the lack of apprentices and universities' inadequate courses are not helping to develop new skills either.
Economic and demand fluctuations deter young people who prefer stable jobs with predictable schedules.
The industry's biggest needs are for carpenters, framing crews, and bricklayers; fewer painters, roofers, and flooring installers are needed.
Experts say that high-interest rates negatively impact the demand for housing, specifically for affordable ones because higher borrowing costs can increase the cost of homeownership. Unfortunately, the price increase requires more affordable houses to be built. This increases the job demand and creates a labor crisis.
Schools, contractors, and government agencies should collaborate to improve project efficiency and close the labor gap.
The following solutions may ease project management and attract the right people:
Schools need to improve the science and math skills levels, if they want to meet the science, technology, engineering, and math (STEM) jobs requirements.
Offering more career paths through apprenticeships and doing a better job advertising them to parents and schools to close the labor gap in the construction industry will boost the labor supply.
Following government recommendations will help get more people on board. Companies may offer benefits like flexible schedules, paid time off, and vacation leave to attract the younger generation.
Other incentives like providing health coverage and a safer working environment by following the best practices on job sites would also be welcomed by all workers in the sector.
Construction companies that utilize modern technologies should be rewarded. Staff need to feel comfortable facing challenges.
Augmented reality, digital twins, and mapping software address issues proactively by enabling real-time monitoring, predictive maintenance, enhanced training, and optimized resource allocation. This leads to faster problem identification and resolution, avoiding delays and preventing accidents, to ensure that hazardous situations do not happen.
Implementing the right technologies to visualize and schedule project teams' tasks offers flexibility, access to specialized skills, and reduced costs compared to hiring full-time employees, allowing for agile staffing and streamlined recruitment.
Modular and prefabrication techniques reduce project construction times by moving upfront work from job sites to factories. Manufacturing jobs are more attractive. They are in safe environments and are not impacted by weather conditions, providing stability and great employment conditions.
Onsite labor conditions are also more attractive for employees using modular and prefabrication techniques in association with autonomous and semi-autonomous robots performing repetitive and mundane tasks that humans do not like doing.
Technologies in construction are not, as attractive as in other industries. Construction technology adoption lags other industry sectors. This is due to factors like resistance to change, high initial investment costs, a skills gap, and the complex nature of construction projects, which can make companies hesitant to invest in new technologies.
For the growing construction industry, using technology is crucial, as it builds skills, and offers progression from entry-level jobs to leadership or ownership roles.
In this article, you learned the definition of labor shortage in the construction industry.
We also explored the gap between the demand for construction workers and the available workforce, which is massive, causing the following issues:
This shortage is due to an aging workforce, a lack of interest in construction careers among younger generations, and inadequate training programs.
Demonstrating to all potential employees, outside the construction sector, opportunities and emphasizing the use of technology may grab the attention of people having an interest in long-term careers utilizing the skills they have developed in the digital world.
Driving Vision's Business Understanding diagnostic evaluates your BIM capabilities, if your culture is compatible with the BIM philosophy, and the investment required to make you, BIM Level 3 ready.
The Business understanding appraisal report will evaluate your BIM capabilities, if your culture is compatible with the BIM philosophy, and the investment required to make you BIM Level 3 ready.
Implementing BIM can be daunting, but Driving Vision is here to help you at the pace you are comfortable with. Get started by getting in touch now
We act as your BIM coordinator
We Support your BIM IT
We Train & Coach you
We Innovate in Technology
We offer you and your projects’ partners a win-win solution based on a solid, long-lasting, fruitful relationship
You outsource the mundane & concentrate on what you do best
