Navigating the Construction Skilled Labor Shortage

The construction industry plays an indispensable role in supporting infrastructure, fueling economic growth, and driving progress and development. In fact, it’s vital to the well-being and prosperity of communities across the country. Under those circumstances, construction businesses are pressured to bring projects to life in an increasingly difficult landscape.

This post explores industry insights, the top challenges weighing heavily on contractors’ minds and what action businesses can take to attract and retain top talent.

The state of the skilled labor shortage in Construction

One of the most pressing challenges in the construction industry today is the gap between the demand for skilled workers and the available workforce. While the numbers vary by source, the deficit ranges anywhere between 500,000 to 1,000,000 laborers.

At the same time, projects are gaining in complexity. Without enough skilled labor, construction businesses face a number of issues, including delays, increased costs, and quality concerns.


Watch episode one of Sage’s Conversations in Construction: Addressing the Skilled Labor Crisis to learn more about how businesses are tackling the labor shortage while recruiting and retaining top talent.


Most contractors are having difficulty filling open positions

In the 2024 Construction Hiring and Business Outlook released by Sage and the Associated General Contractors of America, 77% of respondents report they are having a hard time filling some or all salaried or hourly craft positions.

Moreover, the majority (55%) expect that hiring will continue to be hard or will become harder in the year ahead. While thirty-one percent expect no change, only 13% say it will become easier or remain easy to hire.

Despite the fact that the worker shortage has been a long-standing issue in the industry, it has been compounded in recent years by factors such as the pandemic. Also contributing to the issue is an aging workforce retiring without an adequate influx of younger talent to take their place.

Furthermore, while the shortage impacts various roles within the construction sector —from architects and engineers to tradespeople like carpenters and electricians — the biggest impact has been on skilled workers in the field.

To address this challenge, businesses need to focus on attracting and retaining top talent. However, this is often easier said than done amid fierce competition for the available talent pool. Still, there are ways businesses can set themselves apart.

Recruiting and retaining top talent

Today’s top employees have their pick of places to work. To stand out, construction businesses need to create an environment that attracts skilled workers and makes them want to stay.

While competitive pay and top-tier benefits are a great place to start, a top workplace is about more than money.

In response to these challenges businesses can do more to help recruit top talent, including:

Cultivating a winning company culture

As they seek out the best fit, company culture is more important than ever to workers

Employees want a people-first, positive work environment; that is, a place that sets teams up to succeed and shows appreciation and respect.

Firstly, company leaders can set the tone for the company culture by demonstrating integrity, transparency, and a commitment to employee well-being.

Secondly, it’s important to foster open communication, so employees feel comfortable sharing ideas, concerns, and feedback.

Finally, leadership should also be open about company goals, challenges, and decisions to help build trust and alignment within the organization.

Promoting career development

Since people are a construction business’ biggest asset, it is critical to invest in them.

This investment includes offering opportunities for training and skills development and professional certifications.

In response, employees perform their jobs more effectively. Continuous learning can also help upskill them and prepare them for other roles.

Also, it is important to provide advancement opportunities within the organization and help set a career path also. Employees feel more invested when they have a clear path that enables them to grow and achieve their goals.

Valuing mental health and well-being

As companies struggle with filling skilled positions, many workers have taken on increased workloads.

Therefore, it’s important to ensure all employees have the tools and technology they need to complete their roles effectively and efficiently. Making this investment goes a long way toward easing this burden and improving employee satisfaction.

Coupled with other people-first actions, this fosters collaboration across the organization and reduce stress levels, which can positively impact overall employee mental health and well-being.

Other ways for business’ to promote a healthy work-life balance:

  • flexible work arrangements
  • generous vacation time
  • resources to support employees’ mental and physical health

By fostering a supportive and compassionate workplace, businesses can not only attract top talent but also nurture a resilient and thriving workforce.

Learning from industry peers

As much as it takes time and commitment to change company culture, taking steps now can put businesses on a path to creating a top work environment.

Final thoughts

Construction businesses can lessen the impact of the current labor shortage by creating an environment where employees feel valued, motivated, and empowered to succeed.

This, in turn, drives higher levels of employee engagement, productivity, and retention, ultimately contributing to the company’s overall success and competitive advantage.

Watch Sage’s Conversations in Construction: Selecting the Right Technology

By implementing Sage Intacct, you’re not just adopting a financial management solution; you’re investing in the future success of your construction projects. Contact us to schedule a demo and see Sage Intacct in action.