The construction industry faces a critical challenge – a skilled labor shortage that threatens to delay projects, increase costs, and hinder growth. According to an analysis of data from the U.S. Census Bureau, the industry is short about 500,000 workers – specifically individuals with skilled trades experience.

This shortage of half a million workers affects every level of the construction workforce – from builders and contractors to construction managers. With an aging labor supply and fewer young people pursuing a career in our field, construction firms must adopt strategies to close the gap.

Let’s explore the causes of the skilled labor shortage in construction, why companies must invest in talent recruitment, and the latest solutions to ensure the industry continues to thrive.

The Growing Challenge of Labor Shortages in Construction

Several factors contribute to the current shortage of skilled workers in the construction trades. Let’s review the top causes of the shortage.

1. Retirements in the Workforce

The construction industry is facing a wave of retirements as experienced workers who make up a significant portion of the workforce are aging out of their roles. These veterans often possess decades of experience and technical expertise, which are difficult to replace quickly. 

Unfortunately, the pace of younger workers entering the trades is not keeping up with the rate of retirements, resulting in a growing skills gap. This impacts the labor supply and reduces the mentorship opportunities available for new workers to learn directly from industry veterans.

2. Limited Interest Among Young People

For decades, society has placed greater emphasis on academic-based career paths, such as those requiring higher levels of college education, while undervaluing vocational training and skilled trades.

This shift in focus has led to a decline in high school programs dedicated to teaching trade skills, further reducing exposure to construction careers. As a result, fewer young people see trades like construction as viable or attractive career options.

Misconceptions about lower wages, lack of stability, and physically demanding work often deter potential talent, even though many trade jobs offer competitive salaries and job security.

For example, individuals who gain real-world experience in the field and obtain a Construction Management degree from an accredited college or university will stand out immensely and experience multiple career paths to a rewarding career.

3. Industry Demand Outpacing Talent Availability

Rapid urbanization, infrastructure investments, and private construction projects have surged in recent years, especially in growing U.S. regions. This boom has led to a surge in demand for skilled construction labor, with new job openings created to meet increasing project needs.

However, the supply of qualified workers has lagged behind, leaving companies scrambling to fill positions. The shortage is particularly evident in specialized roles – such as electricians, plumbers, and heavy equipment operators – where advanced training and certifications are required.

This mismatch between demand and supply often leads to project delays, higher labor costs, and increased pressure on existing workers to be more productive and get more done in less time to meet project requirements.

The Impact on Construction Firms

The skilled labor shortage is creating significant challenges for construction firms and builders, impacting their operations and growth in critical ways. Consider the top reasons why construction leaders need to take a vested interest in closing the skilled trades gap.

Project Delays

With a shrinking pool of skilled workers, keeping projects on schedule is becoming more challenging. Deadlines are frequently extended because there simply aren’t enough qualified hands to complete the work on time.

This reality goes beyond disrupting timelines to affecting client satisfaction. It could potentially damage a firm’s reputation in the long term, with owners reluctant to work with firms on future projects.

Higher Labor Costs

The growing demand for skilled labor has led to a sharp increase in wages and benefits as companies compete for the limited talent available. For construction firms, this means higher project costs, tighter profit margins, and the need to reallocate budgets to cover labor expenses. These cost increases can make it challenging to remain competitive in tight markets.

Limited Growth

Without enough skilled workers, construction firms are constrained in their capacity to take on new projects. This bottleneck could limit revenue growth and make it harder for businesses to scale.

Additionally, firms may need to turn down new opportunities or delay future projects because of a lack of available talent, which can harm their market position.

Ultimately, the skilled labor shortage is not just a workforce issue but a broader challenge that affects timelines, budgets, and long-term growth potential. Addressing this shortage is critical for the sustainability of the construction industry.

Strategies for Construction Companies to Close the Gap

How can builders and contractors tackle the skilled labor shortage and build a strong and sustainable construction workforce? Here are the latest strategies to consider for your company.

1. Invest in Apprenticeship Programs

Apprenticeship programs are one of the best ways to train young people and bring them into the construction trades. Programs like these combine hands-on learning with classroom education, equipping new workers with the skills they need to succeed.

2. Partner with Local Schools 

Construction companies can collaborate with high schools that offer CTE (Career and Technical Education) programs, trade schools, and other local entities to establish and expand these programs.

Take the next step by sponsoring or hosting events where students can explore specialized construction trades. For example, get involved through open houses, career fairs, scholarships, or internships to help develop a pipeline of new talent.

3. Actively Promote the Benefits of a Career in Construction

The construction industry offers competitive pay, job stability, and opportunities for advancement. However, these benefits aren’t always highlighted to young workers considering career paths.

Investing in targeted marketing campaigns aimed at high school students, parents, and educators can help shift perceptions of construction employment and inspire new interest in the field.

4. Offer Competitive Training and Incentives

To attract and retain skilled workers, construction firms need to provide competitive benefits:

• On-the-job training and certifications for employees.
• Signing and retention bonuses for skilled workers.
• Wellness programs and career development opportunities to improve job satisfaction.
• A standard benefits package offered through your company’s HR department.

5. Adopt Technology to Boost Efficiency

While hiring additional workers is essential, construction companies can also bridge the gap by using cutting-edge technology to attract younger workers who enjoy using tech and have baseline proficiency in the latest gadgets.

Exciting tools like robotics, drones, and wearable technology can help attract workers who want to make a difference in projects. Utilizing tech-savvy workers can help improve productivity and reduce the need for large labor teams.

A Collective Effort to Close the Skilled Labor Shortage in Construction

Keep in mind the skilled labor shortage in construction isn’t a problem that construction firms can solve alone. Closing this gap requires a community-wide effort. That’s why AIC is proud to have built a community of constructors who are collaborating on these challenges right now.

AIC members are working to build partnerships and networks to address skilled labor challenges. Now is a great time to become an AIC member to participate in the conversation and learn from others about what’s working for their projects.

Although the challenge is great, the construction industry has always been built on resilience, innovation, and adaptability. Becoming part of the AIC community can help you meet the demand and strengthen your company’s ability to compete.

Join the movement to build a stronger workforce by joining AIC today. Together, we can help close the talent gap and ensure the construction industry is ready to meet the latest challenges.