2024’s Top Construction Workforce Challenges

The construction industry’s future is bright.

Talent Management

A new report shows the US construction industry is expected to steadily grow over the next four quarters and continue for the next three years, reaching 1,749,898.1 million by 2027.

The growth can be attributed to the US government’s investment in domestic manufacturing via the CHIPS and Science Act as well as the trillion-dollar investment in infrastructure – e.g., roads, bridges, railways and internet – from the Infrastructure Investment and Jobs Act. But it isn’t just government projects, residential and commercial projects are growing as well.

According to the Associated General Contractors of America (AGC) construction spending increased in October 2023 for manufacturing, power and education projects as well as single-family homebuilding. In fact, private residential construction rose by 1.2%, as single-family construction climbed for the sixth-straight month, by 1.1%.

The challenge isn’t having enough work, it’s having enough workers to keep up with demand.

The Construction Industry Needs Workers

According to the US Bureau of Labor Statistics, there were 431,000 job openings in construction in September 2023 and 375,000 in August. In late November 2023, AGC reported that construction employment increased in 63% of metro areas but tight labor conditions keep firms from hiring more.

The labor shortage has been plaguing the construction industry since the COVID-19 pandemic and it looks to continue being a challenge in 2024. Construction companies will have to figure out how continually adapt to an ever-shrinking labor pool via better recruiting methods, development and improved workforce processes, if they want to take advantage of the industry’s growing demand.

Workers Want Higher Wages

Workers continue to want to make more money and for good reasons. According to the Bureau of Labor Statistics (BLS), the consumer price index rose 3.2% over the past 12 months. The biggest increases were shelter, food and medical care; shelter accounting for 70% of the increase. As these costs continue to rise, workers will either demand a higher wage to cover them or look at competitors who will pay them more.

To face the challenge of increased expectations of wages, construction companies will need to continue to adjust budgets to accommodate higher wages. They may also need to reevaluate their benefits packages for this year’s annual enrollment and include items that employees demand and that will set them apart from the competition. For example, offering flexibility like tech breaks, letting workers self-schedule or switch shifts and encouraging PTO. There are also various health and wellness benefits that will strengthen your workers like gym memberships, fitness trackers, health screenings, smoking cessation programs and stress management education. Using benefits software can help empower employees to make decisions about benefits that work for them.

Lack of Qualified Workers

Not only are there more jobs than workers, but many of those workers that may be available aren’t qualified. All year construction companies have been faced with the double challenge of not only hiring workers but finding candidates who are qualified to work in construction. The lack of qualified workers is due in part to the number of Baby Boomers who are retiring. According to the US Census, all Baby Boomers will be retired by 2030. This issue lies in the fact that this generation makes up a huge portion of workers in the construction industry.

Between 2003 to 2020, the number of workers 55 and older in construction nearly doubled from 11.5 to 22.7%, according to the BLS, and two-thirds of workers are 25-54. The average age for a construction worker in 2020 was 42.5 years old.

Not only does this make the competition to attract skilled workers tight but construction companies might also have to offer more training to unskilled workers. Investing in a learning management system (LMS) can give construction companies an edge when it comes to employee development. An LMS can track training completions and certifications that can help shrink the skills gap between employees.

Competing with Other Industries for Workers

Construction isn’t the only industry that is experiencing worker shortages. In 2022, more than 50 million workers quit their jobs looking for better work/life flexibility, better pay and strong company culture. And while construction is reeling from worker shortage, it isn’t the only one. According to the US Chamber of Commerce, labor shortages are impacting several industries that show a number of unfilled job openings:

Wholesale and retail trade – 20% unfilled
Leisure and hospitality – 35% unfilled
Durable goods manufacturing – 25% unfilled
Professional and business services – 65% unfilled
Financial activities – 50% unfilled

With several industries facing worker shortages, construction companies will have to work even harder to recruit workers to not only their company but the industry as a whole. Promoting your company culture and benefits shows candidates that construction is a growing, viable industry.

Given continuing competition for labor, companies that aren’t already using an applicant tracking system (ATS) might want to consider the investment. An ATS can be used to make hiring easier by building your own candidate pool. Talent pools contain potential candidates who have shown interest in your company or previously applied for positions but weren’t selected at the time. Storing applicant information in your ATS allows you to build a database of quality talent that you can tap into when you have an opening, reducing your time to hire, giving you an edge over the competition.

Convincing Young People to Get into Construction

It has been difficult to boost numbers in construction when fewer young people are entering the industry. According to the BLS, 60% of 2022 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.

The push for higher education, and less for trade schools, is likely part of the reason for a decline in young people pursuing careers in construction. Other factors could include the working conditions in construction, like irregular hours, working outdoors in inclement weather and the potential for accidents.

To combat these challenges, recruiters will need to push the benefits of construction to potential workers, including those who are still in high school. These benefits include:

Ability to earn money from day one through paid on-the-job training
A variety of available positions for a variety of skill levels
Free from tens of thousands of dollars in debt from student loans

Attend high school job fairs, offer mentorships to students and find other ways to keep your doors open to students to help promote any interest in starting a career in the construction industry.

Bigger Need for Specialized Skills

As the construction industry gets more technically advanced, the increased need for specialized skills will only grow. In the last couple of years, technology in construction has skyrocketed to include things like:

Augmented reality
Smart construction wearables
Construction exoskeletons or exosuits
Factory, collaborative and autonomous robots
Drone
AI and machine learning
Modular construction
3D printing
Building information modeling
Blockchain

With all the technological advancements, construction workers have to be more specialized than ever. Construction companies will have to quickly adapt to these changing technological needs and one way to do that is through training. Training and development programs administered through an LMS can assign and track employee training to make sure employees stay up to date on changing technology.

Learn More About HR Technology

Construction workforce challenges in 2024 may be eased by using HR software, like an ATS, LMS and benefits software to help hire, train and manage your workforce.

An ATS Streamlines Recruiting & Hiring

A cloud based ATS automates tasks that normally would take up an enormous amount of your staff’s time.

Posting positions to leading national, local and/or niche job boards. An optional job distribution to fee-based boards exists as well. Built-in templates let users create branded career pages that can be seamlessly integrated into your website’s career page. Keyword and location searches let applicants easily find jobs with optional Hosted Career Page. Templates are also available for the posting, application and candidate emails. And all posts can easily be shared to all your social platforms. 
Managing candidates which allows recruiters to auto disposition, score, screen and stack rank candidates so the best choices are put right in front of managers for easy approval. Hiring managers also have access to pre-employment results to background, drug screening and assessments. Once you choose your top candidates, built-in templates let you send configurable offer letters, helping to reduce your time to hire so your favorite candidates aren’t left hanging. 
Maintaining compliance with the federal government including the Office of Federal Contract Compliance. A good ATS will automatically add EEO taglines to job postings and save all applications. Reporting features, like Affirmative Action Reports and VEVRAA/Section 503 reporting, let you pull up years of applications with a click of a button should an auditor ever show up at your door.

An LMS Enhances Development Programs 

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. An LMS makes it easy to provide and keep track of training completions and certifications.

Improve workforce productivity by integrating all learning activities (online, virtual or in person instructor-led and on-the-job) to develop your employees and improve performance. The investment in your team is realized in your bottom line and your ability to grow. 
Enhance employee engagement by taking an active role in the development of your employees, you help them with their personal growth and create a career path within your organization. 
Centralize certifications and compliance by automating reminder notifications of approaching certification expiration in a centralized system. Communications, updates and reporting become streamlined and efficient. 
Offering flexible training methods from virtual, online and in-person training. Employers can upload existing courses using SCORM, AICC, xAPI and CMI5 formats. You can also associate courses based on skills and competencies.

Benefits Management Software Easily Manages Benefits 

Benefits Management software simplifies critical workflows, improves reporting and increases employee engagement during open enrollment and throughout the year. Benefits management software eliminates data entry and manual paperwork, ensures accuracy with compliance features and enhances the employee experience.

Key features include:

Benefits administration tools to accommodate plan, eligibility, EOI, rollover and mapping rules. As well as tools for processing, deletion, termination, recalculation, communication and COBRA benefits notifications to carriers. 
Third-party integration to more than 300 established carriers, payroll, ERP and HRMS interfaces. Plus, accurate payroll exports and reporting and E-filing for ACA reporting. 
Web-based and mobile access 24/7 and personalized benefits profiles and statements. 
ACA compliance with automated eligibility notifications, 1094/1095 forms generation, multiple EIN reporting, FTE/ALE forecasting and enrollment rosters.

Overcoming workforce challenges for 2024 can be easier when you use HR technology, which can give you an edge over the competition when it comes to recruiting and retaining workers.

Learn more:

Thinking about HR technology and don’t know where to start? Reach out to an Arcoro expert.