Construction is a high-tech industry. From AI and BIM to robotics and drones, the industry utilizes the latest technologies to build better structures. Yet tech innovation hasn’t fully reached HR. Nearly 42% of construction firms are still operating without HR technology, according to a recent survey by Arcoro. That means many construction firms surveyed are still:
- Asking candidates to fill out paper applications
- Using multi-page, paper onboarding packets
- Manually submitting annual enrollment documents
- Updating withholding information for each employee
- Relying on paper time sheets to track employee hours
But faced with labor shortages and evolving workforce expectations, more companies are refining their HR strategies with HR tech. And Arcoro was interested in understanding how HR technology is being used to help solve these challenges.
Arcoro surveyed 300 customers and non-customers from small to mid-sized US-based construction companies across various construction sectors, including commercial construction, general contractors, and specialty trades such as electrical, plumbing, HVAC, paving and solar.
This report highlights key findings from the survey, shedding light on hiring challenges, HR technology adoption and the biggest obstacles companies face in digital transformation.
Here are some of the findings.
How the Industry is Using HR Tech
The construction industry, while slow to completely automate, is integrating some tech to improve process efficiency.
The survey showed:
- 39% of respondents use a mix of technology and manual methods
- 18% of respondents use an all-in-one HR solution
- 17% employ multiple specialized HR software solutions for different functions
One area where automation can make a big impact is payroll. HR tech can transform payroll processing from a time-consuming task into an efficient, error-free process.
However, approaches vary widely:
- 33% use digital time tracking linked to a third-party payroll service
- 32% run an all-in-one system with time tracking and payroll
- 22% still collect time cards and process payroll manually
- 13% outsource payroll to an accountant or external service
Companies leveraging digital payroll solutions benefit from reduced errors and compliance risks, highlighting the importance of continued tech adoption.
Tech Hurdles to Overcome
Despite the advantages HR technology offers, construction companies admit there are hurdles to becoming 100% automated.
One of the biggest hurdles is integrating HR technology with existing construction enterprise resource planning (ERP) systems. The survey found:
- 32% struggle with integration difficulties
- 29% face resistance to change from employees
- 28% cite high implementation costs
- 24% lack internal expertise to support adoption
- 14% feel they receive insufficient training/support from vendors
Another hurdle is the lack of construction-specific features offered by many out-of-the-box solutions.
Companies highlighted key requirements:
- Certification/compliance tracking – 30%
- Mobile access for field employees – 29%
- Integration with project management tools – 28%
- Job site tracking capabilities – 23%
- Certified payroll features – 21%
- Equipment tracking – 22%
- Union worker support – 8%
These findings underscore the demand for industry-specific solutions that address construction’s mobile workforce.
While the construction industry is no stranger to innovation on the job site, HR technology adoption continues to lag behind. Arcoro’s survey reveals that nearly half of construction firms are still managing core HR functions manually, missing out on the efficiencies and compliance benefits that digital tools provide. However, momentum is building. A growing number of companies are embracing a mix of technologies to streamline processes like payroll and time tracking—critical steps toward full digital transformation.
The challenges are clear: integration with ERP systems, high implementation costs, and lack of internal expertise continue to slow progress. But the industry is also voicing what it needs—mobile access, compliance tracking, job site connectivity, and solutions tailored specifically for the construction workforce.
As labor shortages and workforce expectations continue to evolve, it’s evident that HR tech isn’t just a nice-to-have—it’s a necessity. Construction companies that prioritize the right HR technology solutions will not only gain operational efficiencies but also strengthen their ability to attract, manage and retain talent in a highly competitive market.
Download our research report to discover everything the survey found.
