In 2024 alone, 94% of construction firms reported having trouble filling positions, particularly among the craft workforce, according to a report by AGC and Arcoro. While retiring Baby Boomers and young people’s lack of interest in trades certainly have impacted the shortage, new research shows the shortfall has been exacerbated by demographic trends.
According to a Korn Ferry report, by 2030, more than 85 million jobs could go unfilled because there simply won’t be enough people to take them. Population numbers across the globe are decreasing, for example Japan and many European nations have had low birth rates for decades. This decline will manifest this year as the current class of high school seniors is the last before a long decline begins in the number of 18-year-olds — the traditional age of students when they enter college or the workforce.
Fewer 18-year-olds means heightened competition for young adults—whether it’s for college, trade school, apprenticeships or an entry-level job. And here’s the tough reality: you can’t simply “make more” young people.
What’s Causing the Global Talent Shortage?
Declining birth rates and an aging population are likely to blame for a lack of workers. According to MSN, people started to have fewer children in 2007 around the time of the recession, and the birth rate hasn’t recovered since, except for a slight increase during the COVID-19 pandemic. And there will likely be another drop in the number of 18-year-olds beginning in 2033. By 2039, this estimate shows, there will likely be 650,000, or 15%, fewer of them per year than there are now.
What’s more, the number of men over 20 in the workforce have declined, due to retiring Baby Boomers and men being derailed by challenges like substance abuse or incarceration. The proportion of men 20 and older in the workforce has declined from more than 76% at the start of the Great Recession to around 70% today, according to the Bureau of Labor Statistics. That means a huge portion of construction’s traditional skilled workforce is slowly disappearing.
The fact is, the labor shortage will continually get worse, leaving construction companies potentially struggling to find new workers. The industry must adopt new ways of hiring and skilling workers because the old ways simply won’t work anymore.
What Can Construction HR Teams Do?
Continue to Embrace Innovative Recruitment Strategies
The construction industry is evolving rapidly and recruitment strategies must keep pace with these changes. Traditional methods, such as job boards and word-of-mouth referrals, are no longer sufficient to attract top-tier talent.
Companies should leverage digital tools like AI-driven applicant tracking systems, social media platforms and industry-specific online communities to engage a broader and more diverse talent pool. Virtual reality (VR) can also enhance the recruitment process by offering candidates an immersive view of potential job sites or projects. These approaches not only streamline hiring but also position your company as a forward-thinking, attractive employer.
Build Stronger Pipelines with Trade Schools and Apprenticeships
Partnering with trade schools and apprenticeship programs is a powerful way to ensure a steady influx of skilled workers into the construction industry. These partnerships can provide companies with access to a pool of eager, hands-on learners who are already equipped with foundational skills.
Sponsoring apprenticeships or offering scholarships and mentorship programs can help your company build goodwill while creating a direct pipeline to future employees. Engaging with students early—through job fairs, facility tours or guest lectures—can also inspire them to consider long-term careers in construction, bridging the gap between education and employment.
Focus on Retaining and Upskilling the Construction Workforce
Retention is as critical as recruitment when addressing workforce challenges. Providing ongoing training and development opportunities is key to keeping your team engaged and prepared for evolving industry demands.
Implementing robust upskilling programs—such as certifications in green construction, safety management or advanced equipment operation—not only enhances employee satisfaction but also boosts productivity and project quality. Moreover, fostering a culture of inclusivity and recognition ensures employees feel valued, reducing turnover and maintaining a strong, experienced workforce. Investing in retention strategies today will pay dividends in sustaining a competitive edge tomorrow.
Leveraging HR Software for Recruitment, Retention and Upskilling
To navigate these challenges, construction companies are increasingly turning to advanced HR software solutions to enhance their recruitment and retention processes. Tools like Arcoro’s Hire Solution offer comprehensive features that streamline hiring and onboarding, ensuring that companies can efficiently attract and integrate new talent.
Arcoro’s Hire Solution provides:
- Applicant Tracking System: Facilitates seamless management of job postings and candidate applications, enabling efficient tracking and communication throughout the hiring process.
- Onboarding Tools: Automates the onboarding process, ensuring new hires are integrated smoothly and are productive from day one.
- Compliance Management: Assists in maintaining compliance with labor laws and regulations, reducing legal risks associated with the hiring process.
Arcoro’s Learning Management System (LMS) can help to reduce the talent gap in the construction industry by providing a centralized, scalable and efficient way to upskill employees.
Arcoro’s LMS offers customizable training programs, enabling construction companies to deliver role-specific content that aligns with industry standards and compliance requirements. Employees can access training anytime, anywhere, ensuring flexibility in learning without disrupting ongoing projects.
Additionally, the system tracks progress and certifications, helping employers identify skill gaps and address them proactively. By investing in Arcoro’s LMS, construction companies can cultivate a more skilled workforce, enhance productivity and stay competitive in an industry where retaining top talent is critical for success.
By adopting such HR technologies, construction companies can address the demographic trends that impact the worker shortage to enhance their recruitment strategies, improve candidate experiences and maintain a competitive edge in a tightening labor market.
Contact us today to learn more.
