Trends & Insights

CFO Blueprint: How to address the widening skills gap in construction

Learn more about the key factors that are driving the widening skills gap in the construction industry and explore actions your business can take to address the issue.

Skilled jobs in construction are becoming harder to fill, with an ageing workforce, growing demand for specific trades, and immigration policies that deter foreign workers from applying to work in the US.

Requirements are also evolving as new technologies, customer expectations, and project complexities change.

This skills gap is only expected to continue widening. In the latest AGC report, based on responses from over 11,000 general contractors, nearly 80% are already finding it difficult to find qualified workers.

This is having a significant impact on worker quality, with over half of the respondents polled citing this as a top concern.

It’s also an issue that’s putting pressure on existing teams and raising concerns around safety, productivity, and wellbeing.

A change is needed that prioritizes investment in upskilling that, alongside a more targeted recruitment strategy, will enable contractors to create a resilient workforce for the future.

The ripple effects of a workforce lacking key skills

Construction’s workforce challenges are intensified by tight margins and limited time, making it difficult for contractors to invest in upskilling.

When asked about challenges to technology adoption, 39% of the AGC’s respondents say it’s difficult to find the time to implement and run training on new technology, and 36% cite employee resistance.

But without access to the right skills, you may have to turn down projects, face overruns because you’re not able to work efficiently, or struggle to adopt new technologies, such as AI.

A lack of skills development also impacts retention, as the workforce burns out or becomes disillusioned with their own lack of career progression.

Construction is estimated to be the third most burnout-prone industry, and 83% have struggled with mental health issues.

Contractors are also losing skills earlier than other sectors in the US through older workers retiring earlier than planned because of the physical demands of the job. Only 20% of physical laborers are aged 55 or older, compared to 44% of non-physical workers.

These pressures present an urgent need to rethink your training to safeguard the workforce and boost overall project delivery.

What can contractors do about the skills shortage?

Contractors need to make time to develop an education strategy to sit alongside recruitment efforts.

Here are five steps you can take to help tackle the evolving skills crisis:

1. Encourage ongoing training and digital upskilling within your existing workforce to improve capabilities while boosting morale and retention.
2. If the talent isn’t available in the market, grow it internally. Partner with vocational training providers to create apprenticeship programs tailored to your business needs.
3. Invest in AI-enabled tools to boost productivity and reduce physical strain—especially for older workers. Use VR and AR to deliver immersive training experiences that build confidence before workers step on site.
4. Encourage job rotation and cross-training to diversify and broaden skillsets. This strengthens your workforce and can open recruitment opportunities beyond the traditional construction talent pool.
5. Retain older and experienced workers with flexible roles, mentorship opportunities, or phased retirement plans to combat construction’s brain drain and support the next generation of workers.

With the right strategy, tools, and construction software in place, your business can not only overcome today’s skills challenges but build a stronger, more sustainable workforce for the future.