Imagine being responsible for recruiting, compliance, payroll, safety training and employee relations for a workforce spread across multiple job sites, and you're the only HR person at the company. Many don’t have to imagine it because you are living in this scenario every day.

Construction HR teams are being asked to solve the industry’s biggest workforce problems, often with one person and outdated systems.

The result is an overstretched HR function that struggles to balance daily administrative work with long-term workforce strategy. The Arcoro 2026 State of Construction HR Report highlights just how widespread this issue has become and why the industry must rethink how it supports HR.

Construction HR Is Severely Understaffed

The responsibilities for construction HR teams are growing, but the size of HR teams often remains the same or, in many cases, nonexistent

Nearly 18–19% of construction companies report having no HR professional at all, while another 38–39% rely on a single HR person to support their entire workforce.

For companies with hundreds of employees, multiple job sites and complex compliance requirements, this structure creates a serious imbalance. HR professionals are expected to manage recruiting, onboarding, payroll coordination, compliance, training, benefits and employee relations. And they are expected to do this without adequate support.

This lack of staffing does not only affect HR teams. It affects the entire organization. When HR is understaffed, important initiatives like workforce development, retention programs and safety training often take a back seat to repetitive, administrative work.

Administrative Work and Outdated Systems Are Draining HR Capacity

Even when HR professionals are in place, much of their time is consumed by manual administrative tasks.

According to the report, 42% of construction HR leaders say administrative tasks limit their effectiveness.

These tasks include payroll corrections, manual time tracking reviews, compliance paperwork, onboarding documentation and benefits administration. Many construction companies still rely on disconnected systems, spreadsheets or paper processes to manage these responsibilities – and it’s seriously draining them.

When HR teams spend most of their time on administrative work, they have little opportunity to focus on strategic priorities such as:

• Building stronger recruitment pipelines
• Improving employee retention
• Developing workforce training programs
• Supporting company growth
  

 Instead of acting as strategic partners to leadership, HR professionals often operate in constant firefighting mode. 

The Industry’s Workforce Crisis Is Increasing HR’s Workload

The industry’s ongoing labor shortage is another factor that’s putting pressure on HR teams.

About 73% of construction companies struggle to find skilled workers. This isn’t new but shows how HR teams continue to struggle to overcome this hurdle.

HR departments must dedicate significantly more time to recruiting, employer branding and candidate outreach. Finding qualified workers has become more competitive than ever. Companies often need to expand recruiting channels, build relationships with trade schools and create stronger employer brands, and this takes time.

Plus, HR must focus on retaining current employees, ensuring proper safety training and maintaining compliance with evolving labor regulations.

Without additional resources or modern tools, these responsibilities can quickly overwhelm already stretched HR teams. The consequences for missing certification deadlines, safety trainings or failing to submit compliance paperwork, like I-9s, can be severe. For example, OSHA penalties for work-related injuries or fatalities start at $16,550 per violation and climb to $165,514 for repeated violations.

Why Construction Needs More HR Resources

Expanding HR resources is not only about easing workload. It also enables construction companies to operate more efficiently and competitively.

When HR teams have the right staffing levels and technology, they can shift their focus from reactive administrative work to proactive workforce management.

Modern HR tools can automate time tracking, payroll processing, onboarding workflows and compliance reporting. Automation reduces errors and frees HR professionals to focus on higher value initiatives such as workforce planning and employee engagement.

Additional HR support also helps companies build stronger recruitment strategies, improve safety compliance and develop career pathways that retain skilled workers.

Ultimately, stronger HR capabilities lead to stronger construction operations.

How to Make the Case for More Resources

For many HR leaders, the challenge is not recognizing the need for additional resources. The real challenge is convincing leadership to invest in them. That typically means making the case to financial and operational decision-makers such as the CFO, COO or company leadership team.

To gain support, HR leaders need to frame their request in business terms leadership already values: cost savings, productivity, risk reduction and project performance. The goal is not simply to explain why HR is busy; it’s to demonstrate how additional resources will improve business outcomes.

• Calculate ROI on Safety and Retention. Show leadership how HR investments directly reduce costs by quantifying the financial impact of safer job sites and improved retention. Compare workers’ compensation claims, lost-time incidents and turnover rates before and after implementing HR initiatives such as safety training, onboarding improvements or retention programs. Estimate savings by calculating the cost of replacing a skilled worker and the reduction in claims expenses tied to improved safety practices. Present these figures alongside HR program costs to clearly demonstrate return on investment.
• Highlight Productivity Gains. Demonstrate how digital HR tools reduce administrative work and free up staff for higher-value tasks. Identify manual processes that consume the most time, e.g., time tracking, payroll processing or benefits administration, and measure how long they currently take. Then show how automation can streamline these tasks. For example, automated time tracking can turn payroll preparation that once took days into a process completed in minutes while also reducing payroll errors and rework. (See proof here.) Documenting these time savings helps leadership see the operational efficiency gained from HR technology.
• Link HR to Project and Company Success. Explain how HR practices directly affect project timelines, workforce availability and company growth. Track metrics such as time-to-hire, workforce utilization and overtime costs to illustrate how quickly HR can place qualified workers on job sites. When companies consistently fill roles with skilled employees, projects stay on schedule and costly delays are avoided. Data from Arcoro shows construction companies with dedicated HR leadership are more likely to report faster growth than their peers, while firms where HR responsibilities fall to finance, payroll or office management roles tend to grow more slowly.
• Focus on Risk Mitigation. Position HR as a key safeguard against compliance and legal risks. Outline specific steps HR teams can take, such as implementing standardized worker classification processes, maintaining accurate documentation and conducting regular safety and compliance training. Proactive HR oversight helps companies avoid costly penalties, legal disputes and project disruptions tied to safety violations or labor compliance issues. Highlight how consistent HR policies reduce exposure to regulatory scrutiny and strengthen operational stability.
• Show Recruitment Success Stories. Demonstrate the impact of HR-driven recruiting strategies by sharing real examples and measurable outcomes. Highlight initiatives such as partnerships with vocational schools, apprenticeship programs, referral incentives or employer branding campaigns. Include metrics like improved applicant quality, reduced time-to-hire or increased retention among new hires. Showing how these efforts lead to stronger talent pipelines and more reliable staffing helps illustrate how HR investments support long-term company growth.

Next Steps

A Simple Business Case Template for HR Leaders

When presenting a request for additional resources, structure the conversation around clear business outcomes:

1. Define the Problem. What challenge is the company facing? (Example: skilled labor shortages, high turnover, payroll inefficiencies, compliance risk.)
2. Show the Business Impact. How does this problem affect costs, productivity, project timelines or risk?
3. Propose the Solution. What resource is needed? (New hire, technology investment or program.)
4. Estimate the ROI. How will the investment reduce costs, improve efficiency or support revenue growth?
5. Outline Expected Outcomes. What measurable improvements should leadership expect? (Reduced turnover, faster hiring, fewer safety incidents, improved project staffing.)

Construction companies rely on skilled workers to build projects safely and efficiently. Supporting that workforce requires strong HR infrastructure.

As the industry continues to face labor shortages and growing operational complexity, investing in HR resources is essential for long-term success.

Arcoro can help guide your construction company when it comes to making HR tech decisions that prove ROI. Arcoro experts listen to your challenges and offer solutions that meet your needs and budget.

Contact us to get started today.