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Read Time: Less than 7 Mins
Last Modified: January 31, 2025

The construction labor shortage isn’t just a bump in the road — it’s a serious hurdle for the industry, significantly impacting human resources departments.

With projects piling up and a shrinking workforce, construction companies are facing unprecedented challenges.

According to a proprietary model developed by Associated Builders and Contractors, the industry will need to recruit nearly 454,000 new workers in 2025, on top of regular hiring, to meet demand.

This shortfall is already leading to missed deadlines, increased costs and operational inefficiencies.

But there’s good news. While the challenges are real, so are the opportunities to improve how we recruit and retain talent in construction.

In this blog, we’ll explore practical strategies to help HR teams tackle the construction labor shortage head-on and keep their workforce strong and motivated.

Key Takeaways for HR Managers in the Construction Industry:

  • Recognize the factors contributing to the labor shortage, including an aging workforce, negative perceptions of the industry and competition from other sectors.
  • Utilize targeted recruitment, strong employer branding and employee referrals to attract top talent.
  • Offer competitive compensation and benefits, invest in career development, foster a positive work environment and promote employee engagement.
  • Utilize HR management software like hrHQ to streamline processes, improve efficiency and enhance employee experience.

Understanding the Construction Labor Shortage

Before we dive into solutions, it’s important to understand what’s driving the construction labor shortage.

For starters, many skilled workers are retiring, and fewer younger workers are stepping up to take their place. The aging construction workforce has created a significant gap, especially as fewer people pursue trades.

Then there’s the perception issue. Construction jobs are often seen as physically demanding, with limited growth potential — an image that doesn’t reflect the reality of many rewarding careers in the industry.

Other industries, like tech and manufacturing, aggressively compete for the same talent pool and offer enticing packages, making it harder for construction companies to stand out.

Additionally, according to a report by the U.S. Bureau of Labor Statistics, the construction industry had a turnover rate of 5.2% in 2024, higher than the national average of 3.7%.

This high turnover rate can make it difficult for construction HR personnel to effectively recruit and retain workers.

Understanding these underlying issues is the first step toward crafting a solid plan to address them.

Effective Recruitment Strategies for Obtaining Construction Workers

Here are some actionable strategies to help HR professionals in construction overcome the labor shortage.

Targeted Recruitment for Construction Workers

When it comes to finding new construction talent, a one-size-fits-all approach won’t cut it. Instead, ask yourself, who are you targeting:

  • Young graduates?
  • Veterans?
  • People looking to change careers?

Tailor your outreach to these groups by using platforms they frequent, like social media or online job boards.

It’s also worth building relationships with vocational schools and trade unions by offering construction internships or apprenticeships.

These partnerships can connect you with candidates who already have some of the skills you’re looking for or who are eager to learn.

Hosting workshops, job fairs or training programs can establish your construction company as a go-to employer in the field.

Construction Employer Branding

If you want people to choose your construction company, you need to show them why it’s a great place to work.

This is where employer branding comes in. Highlight what makes your workplace special, whether it’s opportunities for growth, competitive pay or a supportive team environment.

Use your website and social media to share real stories from employees, showcase completed construction projects and give a glimpse into your company culture.

The goal is to make your company a place people are excited to join.

Employee Referrals

Your current employees can be some of your best recruiters. They know what it takes to succeed in your construction company and can recommend people who’d be a great fit.

To encourage referrals, consider offering rewards, like bonuses or extra vacation days when someone they refer gets hired.

And don’t forget to recognize employees for their efforts — it helps build a sense of pride and teamwork.

Helpful Strategies for Retaining Construction Employees

By implementing these approaches, construction companies can build a sustainable workforce ready to tackle industry challenges.

Competitive Compensation and Benefits

Once you’ve built a strong team, keeping them happy is key. Competitive pay is a must, but don’t stop there.

Think about benefits like health insurance, retirement plans and performance bonuses.

Flexibility can also go a long way — options like adjustable schedules can make a big difference in work-life balance.

Construction Career Development Opportunities

Employees want to grow, and if they can’t see a future at your company, they’ll look elsewhere.

Invest in training programs, offer mentorship opportunities and create clear paths for advancement.

When people know you’re committed to their development, they’re more likely to stick around.

Fostering a Positive Work Environment

People want to work in a place where they feel valued. That starts with open communication.

Regularly check in with employees, celebrate their successes and address any issues quickly.

Even small gestures, like recognizing someone’s hard work in a team meeting, can go a long way in building morale.

Engagement Matters

Engaged employees are happy employees — and happy employees are more likely to stay.

Plan team-building activities, social events or even casual get-togethers to strengthen relationships.

Encourage feedback and make employees feel heard; when they know their opinions matter, they’re more likely to be invested in the company’s success.

How Construction HR Technology Simplifies Recruitment and Retention


Managing recruitment and retention in the construction industry can be daunting, especially when you’re juggling multiple projects and teams.

This is where a construction-specific human resources management app can be a game-changer. Automating human resources processes can streamline HR tasks, making it easier to find and keep the right people.

For recruitment, these apps offer ways to simplify new hire onboarding. Instead of shuffling through paper forms and manual data entry, new hires can upload and manage their required documents securely through a centralized platform.

Look for features like digital document sign-off tools that ensure compliance by enabling mobile signatures for policies and forms, while tracking completion.

Many also include features for managing employee referrals, saving you time and ensuring no leads slip through the cracks.

On the retention side, these apps often offer tools like an employee self-service portal that allow construction workers to access their:

  • Paystubs
  • W-2s
  • Benefits information
  • Personal data
  • PTO
  • 401(k) withholdings

By giving employees more control and visibility over their information, you can foster trust and reduce administrative burden.

Additionally, automated payroll and benefits management can help ensure your team feels supported and valued.

By using HR technology, you’re not just keeping up — you’re staying ahead in the competition to build and maintain a strong, satisfied construction workforce.

See How hrHQ Can Help You Recruit and Retain Construction Employees

The construction labor shortage is no small hurdle, but it’s one that can be tackled with the right approach.

By fine-tuning your recruitment strategies and putting a strong focus on retaining talent, you can build a workforce ready to meet the demands of this competitive industry head-on.

Whether it’s partnering with schools, improving your construction brand or fostering a positive workplace culture, the key is to act sooner rather than later.

Taking steps now means reaping the rewards of a more engaged, skilled and committed construction team. This is where a tool like hrHQ can make all the difference.

Tailored specifically for the construction industry, hrHQ streamlines every aspect of human resource management, from simplifying onboarding to managing certifications and enabling self-service tools for employees.

With hrHQ, you’re not just managing a workforce — you’re setting the foundation for a stronger, more sustainable future.

Chat with a specialist today to learn more!

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