In September 2024, there were 7.4 million job openings, according to the US Bureau of Labor Statistics (BLS). Construction specifically had 288,000 openings.
The current worker shortage is not only a recruiting challenge, but it has also impacted construction companies’ ability to do their jobs. According to the Associated General Contractors’ (AGC) 2024 Industry Workforce Analysis, sponsored by Arcoro, 54% of contractors reported experiencing project delays because of workforce shortages. Combating workforce shortages looks to remain a huge challenge going forward in 2025.
Why is finding, hiring and recruiting workers such a challenge?
Finding enough workers to fill positions isn’t just an issue for a handful of contractors. A lack of workers is affecting recruitment efforts industry-wide with 94% of construction firms reporting they’re having trouble filling at least some of those positions, particularly among the craft workforce, according to AGC and Arcoro’s report.
There are likely several reasons companies are having a tough time filling positions, including fewer young people choosing trades, competition from other industries, workers demanding competitive wages and a lack of skills.
Fewer young people are choosing trades.
Decades ago, pursuing a trade was a popular option for young graduates but that option gave way to pursuing a four-year degree, leaving a gap in the construction workforce that has lasted for years. According to the BLS, 61.4% of 2023 high school graduates ages 16 to 24 were enrolled in colleges or universities. The focus on pursuing higher education over a trade has steadily increased over the past 40 years. According to the National Center for Education Statistics, in 1969 there were 8 million students enrolled in postsecondary institutions and in 2019, 19.6 million were enrolled. AGC attributes this labor workforce shortage to the nation’s failure to invest in construction workforce education and training programs.
To combat this challenge, AGC and Arcoro’s report showed 57% of firms report they have added online strategies to try to recruit younger workers and 51% have engaged with career-building programs like high schools or training facilities. As a result, more new graduates have begun to enter the construction workforce, but there’s intense competition for these employees with 85% of companies reporting they are actively recruiting these candidates.
Competition from other industries.
Construction isn’t the only industry that is experiencing worker shortages. According to the US Chamber of Commerce, labor shortages are impacting several industries that show a number of unfilled job openings:
- Durable goods manufacturing – 13% unfilled
- Financial activities – 40% unfilled
- Leisure and hospitality – 25% unfilled
- Professional and business services – 50% unfilled
With several industries facing worker shortages, construction companies will have to work even harder to recruit workers. Promoting your company culture and benefits shows candidates that construction is a growing, viable industry that offers both short- and longer-term advantages.
Workers demanding competitive wages.
Not only are workers in short supply but when a suitable candidate is found, presenting a competitive offer may be the hiring edge needed. Construction companies across the board have had to raise worker wages specifically for this reason. According to AGC and Arcoro’s report, 91% of firms say they increased base pay rates for hourly construction positions over the past year. While pay raises may strain already tight budgets, they’re necessary to recruit the best talent.
Lack of skilled workers.
Not only is it a challenge to entice enough candidates to work in construction, but many don’t have the necessary skills. AGC and Arcoro’s report found 62% of respondents reported that available candidates were not qualified to work in the industry because they lack the required skills or certificates. A lack of skilled workers puts training and development on the company’s shoulders. Forty-two percent of firms taking part in AGC and Arcoro’s survey reported they have initiated or increased spending on training and professional development programs to address workforce shortages. And one-in-four firms report they have increased their use of learning programs with strong online and/or video components.
HR Tech Can Ease 2025 Workforce Challenge
With continued workforce challenges, the construction industry increasingly needs to leverage technology that will help enhance the HR function. This includes automating manual processes and also enhancing functions like recruiting and learning. Hiring, managing and growing a construction workforce can be easier with the right tools.
- Arcoro offers several software solutions built specifically for the construction and field services industries. These solutions include:
- Core HR which collects and maintains all your employee data to help streamline HR management processes.
- A cloud based ATS that helps boost recruitment efforts by easily targeting more candidates. It also automates recruitment tasks that normally would take up an enormous amount of your staff’s time.
- A cloud based LMS enables organizations to capture, create, manage and share knowledge to improve workforce productivity, accelerate critical business processes, support compliance and power organization performance.
- Benefits Management software simplifies critical workflows, improves reporting and increases employee engagement during open enrollment and throughout the year.
What’s more, Arcoro offers game-changing advanced analytics that give contractors valuable insights into their data so they can make informed decisions with greater accuracy and speed. Arcoro offers advanced analytics options to help companies leverage workforce data to make the informed business necessary to remain agile and adaptive.
Don’t let 2025’s workforce challenges slow down your company’s growth. Learn about how HR tech can offer solutions by reading the guide, 2025’s Construction Workforce Challenges.
