Construction

CFO Blueprint: How to solve the talent pipeline challenge in construction

Construction is poised for growth, yet the industry continues to face talent shortage. This article explores how the sector can boost the talent pipeline and capitalise on increasing investment in data centers, infrastructure, and renewable energy projects.

September 23, 20253 min read Share

Construction is poised for growth with increasing investment in data centers, infrastructure, and renewable energy projects—but the industry continues to face talent shortages that are delaying projects and escalating labor costs.

It’s estimated that construction needs almost 500,000 more workers to meet growing demands in 2025, and 8.4 million more by 2033, making recruitment a crucial priority. Here’s how the sector should start to tackle the ongoing worker shortage and boost the talent pipeline.

Insights from the 2025 AGC Outlook report

The latest AGC Outlook report surveyed more than 1,100 contractors from around the US, finding workforce issues to be a major concern. In fact, 62% of respondents cited rising labor costs, 59% said insufficient supply of workers, and 56% said worker quality were the biggest challenges for 2025.  

Nearly 80% of firms reported difficulties finding qualified workers, despite 53% increasing wages, 28% improving benefits, and 28% providing incentives.

Unplugging construction’s sluggish talent pipeline

Today’s construction labor shortage has been mounting over time, with several contributing factors.

• An ageing workforce, with estimates that for every five tradespeople who retire, only two are available to replace them.
• A generational shift away from vocational training and towards college degrees means fewer young people are entering the sector. Only 3% of young people in the US are reportedly interested in construction trades.
• During the Covid-19 pandemic, nearly one million construction workers lost their jobs and many more chose to retire early or seek out opportunities in other sectors.
• Foreign talent pools are already starting to decline, with potential immigration policy changes likely to reduce this further. Construction employs high numbers of foreign-born workers, to the tune of 3.3 million in 2023.

It’s clear that the problem wasn’t born overnight, meaning the solution won’t be either.

Proactive solutions for construction recruitment

Addressing construction’s skilled labour shortage is a complex challenge that requires a multifaceted approach. Here are four ways for contractors to gain a competitive edge:

1. Partner with unions, schools and colleges to provide vocational training, scholarships, and apprenticeships that attract skilled construction workers. Mike Rowe’s Works Foundation, for example, has granted $11m in scholarships over the past 17 years to help train the next generation of tradespeople. 
2. Promote diversity to widen the available talent pool (e.g. women, those from ethnic minority backgrounds) and include those who may have traditionally navigated towards other, more white-collar careers.  
3. Explore new outreach channels—one report found 60% of Gen Z Americans say skilled trades work has become more “Instagrammable” in recent years with trades-related posts on TikTok and Instagram increasing by 52% between 2023 and 2024.  
4. Invest in technology to increase efficiency, reduce manual labor, and make the sector more appealing, including VR training, drones, modular building, and AI.

Attracting the next generation of skilled tradespeople is no small feat, but one that can be achieved through collaboration, creativity, and consistent evolution.