Attracting and Retaining Employees in the Construction Industry

The passing of the Infrastructure Bill and the promise of new projects brings with it worries that the construction industry will not have the skilled employees to meet the demand. As of this past May, the U.S. Bureau of Labor Statistics’ reported that approximately 339,000 construction jobs were left unfilled. A 2024 Workforce Survey Analysis by AGC (Associated General Contractors) reported that 54% of construction firms reported project delays due to workforce shortages—which was prior to the passing of the Infrastructure Bill in November. Add to that an aging workforce. According to ABC (Associated Builders and Contractors) 2024 workforce shortage model, more than 1 in 5 construction workers are 55 or older. So what can be done to help alleviate some of the workforce stress and help the industry with attracting and retaining employees? Many think that several options could possibly help.

Enhancing Workforce Diversity

Studies have shown that workplaces with diverse executive teams were 33% more likely to outperform their competitors financially. This is where construction companies are succeeding — growing diversity among their executives. But diversity among the boots-on-the-ground workers is slow to keep up.

Even though the number of female employees has increased in the past couple of years, labor statistics from 2021 show that only one in ten construction workers is a woman. Take a deeper look at the Bureau of Labor Statistics, and you’ll also see that 30.7% of construction professionals are Hispanic, 6.2% are black, and only 2% are Asian.

What can the construction industry do to diversify its workforce better? Some companies offer mentorship programs, where diverse leaders from their organizations serve as mentors to new employees in minority groups— being there to provide guidance and to help them become better employees. 

Companies can also reach out to associations for assistance. Minority construction associations like the National Association of Minority Contractors and the National Association of Women in Construction not only provide access to recruitment channels they also offer training and information that can help maintain a successful and diverse workplace.

Diversity is a proven asset in driving profitability and can be a key component in solving labor shortages.

Employee training and certification

More construction companies are returning to one of the oldest types of recruitment — apprenticeship programs. According to the US Department of Labor, apprenticeship programs can help vet future employees and instill a company’s culture from the very beginning. Those that offer apprenticeship programs also report less turnover and improvements in company loyalty, which helps them retain top talent. In fact, some companies can have their apprenticeship programs assessed for college credit, which participants can apply toward an associate’s or bachelor’s degree in a related field. Also, “earn while you learn” apprenticeship programs are increasingly attractive to Gen Z, who are turning away from four-year university programs for fear of going into debt.

But what about current employees? According to staffing surveys, among those employed, 84% of Millennials and 79% of Generation X view professional development and training offerings as important considerations when accepting a new job. Allowing employees to become certified in specialty areas helps them grow and brings more growth potential and knowledge back into the company. It also shows that the company is committed to their future growth. Many employees see a benefit to becoming certified in their craft. ACI (American Concrete Institute) certification and LEED BD+C (Green Business Certification through the US Green Building Council) certification are some of the most sought-after certifications that can provide a return on investment when mentioning them in bid proposals.

Hiring veterans

Many companies are looking to our military veterans and spouses to fill the gaps in their employment needs. Many contractors report that workers with military experience provide the respect, discipline, and teamwork they are looking for in an employee. Veterans are also trained to adapt and overcome challenges to meet objectives. But a lot of companies don’t know where to start when it comes to finding veterans to join their team. Helmets to Hardhats is a registered nonprofit that connects active-duty military service members to career opportunities in the construction industry. They also try to create awareness among veterans that they can utilize their G.I. Bill benefits to “supplement their income while they are learning valuable skills and on-the-job training.”

Offering retirement and healthcare benefits

The construction industry has historically been one of the least likely to offer benefits to its employees. Tight margins for winning bids, employees preferring higher pay over benefits, seasonality, and high employee turnover all play a factor. But employees are increasingly asking for these benefits or seeking employers offering insurance or retirement plans.

Only 34% of construction workers are participating in an employer-sponsored retirement plan. Yet, according to a Payscale study, the most desired benefits among construction workers are retirement benefits. When it comes to healthcare benefits, of the 20 professions least likely to have health insurance, 11 of them are in the construction industry, according to MarketWatch. Now, more than ever, the industry needs leaders to step up so we can reverse the trend and take care of these hard-working men and women.

Companies should schedule a meeting with their CPAs or controllers to talk about offering employment benefits ­— many benefits can actually save money by decreasing a company’s labor burden (which means less paid in taxes!). And, if a company works on prevailing wage jobs, they can use the fringe dollars to help pay for these benefits.

Stay ahead of the competition when it comes to attracting and retaining employees Attracting and Retaining Employees in the Construction Industry

Forecasters predict that the construction industry will continue to grow in the coming years. As this happens, the competition for hiring quality employees will also continue to grow. As you plan for the future, look at how your company can incorporate diversity, training, veteran hiring practices, and employee benefits to not only fill in employment gaps but also retain valuable employees committed to the company’s growth.