The construction industry is grappling with a growing workforce challenge as skilled labor shortages continue to impact projects worldwide. An aging workforce, waning interest among younger generations, and increasing project demands have intensified the need for innovative solutions.
Image Credit: PeopleImages.com - Yuri A/Shutterstock.com
To ensure the sector’s long-term sustainability, adopting technology and investing in workforce training are critical. These approaches not only enhance productivity and safety but also make construction careers more attractive to new talent.
This article explores how technological advancements and modern training initiatives are reshaping the construction workforce, securing efficiency and sustainability for the future.
Let's begin!
The Labor Shortage Crisis in Construction
The global construction labor crisis is hitting hard, disrupting projects everywhere—from massive infrastructure initiatives in North America to booming megacity developments in Asia. While each region has its own challenges, the industry as a whole is under immense pressure, and solving this problem will take a coordinated global effort. The numbers speak for themselves.
In North America, the US had a staggering 380,000 construction job vacancies in 2023—90 % more than in 2017—with 41 % of the pre-2020 workforce expected to retire by 2031. Canada’s situation is even more extreme, with job vacancies jumping 158.4 % between 2021 and 2023, leaving 81,500 positions unfilled. Over in Europe, Germany is struggling too—almost half (49.7 %) of its construction firms reported skilled labor shortages in 2022, forcing residential projects to be canceled. Spain is short 700,000 workers for its EU-funded infrastructure projects, and in France, 43 % of construction companies say labor shortages are their biggest roadblock.
Asia-Pacific isn’t faring much better. In Australia, trades make up 35 % of the national skilled workforce gap, and in Singapore, 1538 construction firms collapsed between 2021 and 2023 due to labor and material shortages. Malaysia, despite new labor agreements with Indonesia, still has a 12.5 % youth unemployment rate, showing that the issue isn’t just about having enough workers—it’s about connecting them to the right opportunities.
Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements. These workforce shortages are compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability uncertain.
Ken Simonson, AGC’s Chief Economist
So, what’s fueling this crisis? A few key trends stand out. For one, demographics are shifting. The average construction worker worldwide is over 42, and in the EU, a quarter of the workforce is set to retire by 2040. On top of that, fewer people are learning the trade—vocational education enrollment has dropped 37 % globally since 2000, even as technical skill demands have risen by 53 %. Money is another big factor: 73 % of US contractors say labor costs are their number one concern, and wages for specialty trades have shot up 19 % since 2020. In the Middle East, the problem is compounded by the COVID-19 pandemic, which led to migrant worker repatriation and 40 % cost overruns on projects.
Another issue is the perception of construction as low-tech. Despite the fact that 71 % of G20 nations have adopted Building Information Modeling (BIM), 58 % of Gen Z sees construction as outdated. This disconnect makes it even harder to attract young talent, creating a cycle of ongoing shortages.
Countries are tackling these challenges with a mix of workforce modernization, policy changes, and new technology. Singapore’s Built Environment ITM program is training 20,000 workers a year in IoT and robotics, while Canada’s SkillPAD app has slashed certification time by 30 % with AR simulations. On the policy side, Germany’s construction workforce got a 22 % boost from the EU Blue Card Reform, and ASEAN’s Mutual Recognition Agreement has increased regional labor mobility by 17 %.
Technology is also making a big impact. In Dubai, 3D printing has cut high-rise labor needs by 40 %. Brazilian firms have reduced overtime by 25 % with AI-driven scheduling, and Japanese construction sites have seen 60 % fewer musculoskeletal injuries thanks to exoskeletons.
But even with these advances, major challenges remain. The US is still 1.5 million housing units short, despite modular construction improving productivity by 19 %. The UK needs 44,000 more electricians by 2027 to meet net-zero targets. In India, a lack of skilled operators is slowing down the massive ₹100 trillion Gati Shakti infrastructure plan. Saudi Arabia’s NEOM project, despite employing workers from 47 different countries, still faces a 28 % workforce gap. Meanwhile, in industrial construction, Mexico’s maquiladora zone has a 35 % shortage of certified welders, and China’s prefab factories are only running at 63 % capacity due to a lack of automation technicians.
Fixing this crisis is going to take a global effort. Without action, the World Economic Forum estimates that the industry could lose out on $40 trillion in potential output by 2040. But there’s hope—programs like Australia’s TSS visa, which increased migrant labor by 41 %, and Germany’s Baukasten training system, which improved worker retention by 18 %, prove that solutions exist.
Moving forward, the industry needs to tackle aging demographics, close the skills gap, and embrace technology to build a stronger workforce. By working together, investing in training, and adopting innovative tech, the construction sector can navigate this crisis and create a more resilient, sustainable future.
Aging Workforce in the Construction Industry: What To Do
Training the Workforce for the Future
The way the construction industry trains its workforce is changing fast. With a global labor shortage and rapid tech advancements, companies are moving beyond traditional on-the-job training. Instead, they’re embracing new technologies, fresh learning methods, and a stronger focus on lifelong skill development to close the skills gap and bring in new talent.
One of the biggest game-changers is immersive tech. Virtual Reality (VR) and Augmented Reality (AR) are making training more accessible and effective. Take Skanska UK, for example—their VR safety training has cut on-site incidents by 37 % in just two years while boosting engagement by 75 % compared to old-school methods. AECOM is also using AR for equipment training, reducing training time by 40 % and improving first-time task completion by 28 %.
Then there’s Building Information Modeling (BIM) and data analytics, which are completely changing how construction teams work. BIM helps with design, planning, and coordination, cutting out inefficiencies and reducing the need for extra labor. Autodesk’s BIM certification program has trained over 100,000 professionals worldwide, helping BIM-trained teams complete projects 22 % faster and slash change orders by 33 %. Learning digital skills like these isn’t just good for individual careers—it’s boosting overall efficiency and easing the labor crunch.
Apprenticeship programs are also getting a modern upgrade. Germany’s dual education system, which combines hands-on experience with classroom learning, has been a huge success. With a 91 % completion rate, it’s helped keep youth unemployment low at just 5.7 %. Now, countries like Australia and Canada are adopting similar models. Early results show a 24 % jump in apprenticeship retention and a 17 % productivity boost for companies. These programs ensure a steady flow of skilled workers, helping to counteract labor shortages.
E-learning platforms are making construction education more flexible and accessible, especially for people switching careers. Coursera, for instance, has teamed up with big construction firms and universities to offer micro-credential programs. So far, over 500,000 learners worldwide have taken advantage of these courses. Emerging markets like India and Brazil are seeing a 45 % increase in advanced construction techniques among small and mid-sized companies using these platforms. By breaking down barriers to entry and offering upskilling opportunities, e-learning is helping to fill the labor gap.
Continuous learning is also becoming a must in construction, with companies rolling out creative programs like “learning sabbaticals” and “skill sprints.” Laing O'Rourke, for instance, offers two-week intensive training sessions every quarter, focusing on new tech and sustainable building methods. This has resulted in an 18 % boost in employee retention and a 12 % increase in winning bids for projects that require advanced expertise. Keeping workers engaged and up to speed with new skills is key to reducing turnover and keeping talent in the industry.
Mentorship is evolving, too. Programs like Bechtel’s reverse mentoring, where seasoned professionals team up with younger, tech-savvy employees, are helping bridge the generational gap. This has led to a 29 % improvement in collaboration and a 15 % increase in the use of digital tools by senior staff. These initiatives make sure valuable knowledge is passed down rather than lost when experienced workers retire, helping younger employees step into critical roles more quickly.
Artificial intelligence also plays a huge role in workforce training. AI-driven platforms like ConstructionSkills.ai personalize learning by analyzing individual performance and project needs, creating customized training experiences. Early adopters are seeing a 35 % jump in skill acquisition and a 20 % reduction in the time needed to master complex tasks. AI-driven training solutions are helping workers get up to speed faster, making it easier to meet labor demands in high-demand areas.
Despite the benefits, integrating technology in construction comes with its own set of challenges. High costs and workforce resistance can make adoption difficult. Many companies struggle to afford advanced tools and the training needed to use them effectively. On top of that, experienced workers may hesitate to embrace new methods, slowing digital transformation. To overcome these obstacles, firms must focus on engaging, accessible training programs that make learning new technologies easier and more intuitive for everyone.
Strengthening Workforce Retention Through Innovation and Collaboration
Retaining skilled workers isn’t just about hiring the right people—it’s about creating an environment where they want to stay. Companies that prioritize safety, career growth, and inclusivity tend to see higher employee satisfaction and long-term workforce stability. But retention doesn’t happen in isolation; industry collaboration and government support also play a crucial role in developing and sustaining a skilled workforce.
One key factor is workplace safety. Technologies like wearable sensors, AI-driven monitoring, and automated machinery help minimize hazards, making job sites safer and more attractive. However, safety alone isn’t enough. Competitive compensation—strong salaries, comprehensive health benefits, and performance-based incentives—keeps employees engaged and reduces turnover.
Beyond financial incentives, career development opportunities encourage long-term commitment. Leadership training, industry certifications, and clear career pathways help employees see a future within the company. Additionally, fostering an inclusive work culture—one that prioritizes gender diversity and equal opportunities—builds a more stable and innovative workforce while making the industry attractive to a wider range of talent.
Collaboration between industry stakeholders, educational institutions, and government bodies further strengthens workforce development. Educational partnerships with universities and vocational schools ensure that students gain practical, hands-on experience before entering the workforce. Meanwhile, government policies—such as vocational training initiatives, tax incentives for companies investing in employee development, and skilled labor immigration programs—help address ongoing labor shortages.
Industry associations also play a vital role. Organizations like the Associated General Contractors of America (AGC) and the Construction Industry Training Board (CITB) offer certification programs that validate skills and enhance workforce competence.
By combining workplace innovation with strong industry collaboration, companies can create an environment where skilled professionals don’t just stay—they thrive.
Want to Learn More?
The demand for tech-savvy professionals in construction is only expected to grow. Roles like software developers, data analysts, and automation specialists are becoming essential as the industry embraces digital transformation.
For more insights into the future of construction, check out these articles:
References and Further Reading
- Siddiqui, F. H. et al. (2023). A Review of the Digital Skills Needed in the Construction Industry: Towards a Taxonomy of Skills. Buildings, 13(11), 2711. DOI:10.3390/buildings13112711. https://www.mdpi.com/2075-5309/13/11/2711
- Wadley, D. (2021). Technology, capital substitution and labor dynamics: Global workforce disruption in the 21st century? Futures, 132, 102802. DOI:10.1016/j.futures.2021.102802. https://www.sciencedirect.com/science/article/abs/pii/S0016328721001117
- Komatsu (2022) 'Employee retention in the construction industry', Komatsu Blog. Available at: https://www.komatsu.com/en/blog/2022/employee-retention-in-the-construction-industry/
- Associated General Contractors of America (2022) 2022 Construction Outlook: National Survey. Available at: https://www.agc.org/sites/default/files/users/user21902/2022_Outlook_National_0.pdf
- Associated General Contractors of America (2023) 'New survey shows significant flaws in the nation’s approach to preparing workers for construction careers and how to fix it', AGC News. Available at: https://www.agc.org/news/2023/09/06/new-survey-shows-significant-flaws-nations-approach-preparing-workers-construction-careers-and-how-0
- International Labour Organization (2021) 'The future of work in construction', ILO Briefing Note. Available at: https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@dgreports/@dcomm/documents/briefingnote/wcms_767028.pdf
- Assaad, R. et al. (2021). Impact of Dynamic Workforce and Workplace Variables on the Productivity of the Construction Industry: New Gross Construction Productivity Indicator. Journal of Management in Engineering, 37(1), 04020092. DOI:10.1061/(asce)me.1943-5479.0000862. https://ascelibrary.org/doi/abs/10.1061/(ASCE)ME.1943-5479.0000862
- Guo, Z. et al. (2024). Evaluating the Effectiveness and Efficiency of a Training Program for Tunnel Construction Workers. Buildings, 14(12), 3733. DOI:10.3390/buildings14123733. https://www.mdpi.com/2075-5309/14/12/3733
- Pandita, D. (2021). Innovation in talent management practices: creating an innovative employer branding strategy to attract generation Z. International Journal of Innovation Science. DOI:10.1108/ijis-10-2020-0217. https://www.emerald.com/insight/content/doi/10.1108/ijis-10-2020-0217/full/html
- Kozlovska, M. et al. (2020). Impact of Industry 4.0 Platform on the Formation of Construction 4.0 Concept: A Literature Review. Sustainability, 13(5), 2683. DOI:10.3390/su13052683. https://www.mdpi.com/2071-1050/13/5/2683
- Zhang, Q. et al. (2022). Linking corporate social responsibility (CSR) practices and organizational performance in the construction industry: A resource collaboration network. Resources, Conservation and Recycling, 179, 106113. DOI:10.1016/j.resconrec.2021.106113. https://www.sciencedirect.com/science/article/abs/pii/S092134492100721
Disclaimer: The views expressed here are those of the author expressed in their private capacity and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork the owner and operator of this website. This disclaimer forms part of the Terms and conditions of use of this website.