Like many industries, construction is experiencing a major labor shortage. Associated Builders and Contractors projects the industry will need to bring in 439,000 net new workers in 2025 just to keep pace with demand. That’s not a typo—nearly half a million new workers in a single year.
This might seem like a golden opportunity for newcomers to the field, but it raises some major concerns for construction executives.
Missing this hiring target threatens the entire industry: projects will face significant delays, costs will surge as companies compete for limited workers and some projects may be abandoned altogether. Consider the fact that 20% of construction workers are nearing retirement age, and these challenges become even more daunting.
Rather than waiting for market conditions to improve, smart construction firms must dig deep and rethink how they manage their people. The lasting solution lies in understanding and leveraging the behavioral patterns and work styles that drive team performance and employee satisfaction.
LOOKING WITHIN BEFORE SEEKING OUT NEW HIRES
An August 2024 survey conducted by Arcoro and the Associated General Contractors of America found that 94% of construction firms in the U.S. have trouble filling at least some positions. And this astonishing workforce shortage persists despite efforts like boosting salaries and increasing internal training program opportunities.
Economists typically point to skills gaps when there aren’t enough workers to fill an overabundance of open positions. But this assumption ignores the roles companies themselves can play in resolving the issue. Let’s flip the script—what are construction job seekers looking for that they aren’t being offered?
Now more than ever, construction firms must look beyond traditional incentives like healthcare benefits and retirement plans to attract and retain new hires. Young talent doesn’t just want a paycheck, they want to know they are joining a company that will recognize their unique talents and provide supportive growth opportunities.
To create a future-focused work environment, construction firms need to start with their current teams and build outward.
UNDERSTANDING BEHAVIORAL DATA CREATES A STRONGER TEAM
Different generations of workers come with their own styles and knowledge bases. Rather than seeing this as an inevitable conflict, firms must leverage these differences to create a more efficient workflow. This starts with understanding how colleagues think, work and communicate.
Consider this dynamic on a typical jobsite: A veteran operations manager brings decades of experience in optimizing workflows, while newly hired laborers bring fresh perspectives on technology and innovation. The project superintendent becomes the crucial bridge between these viewpoints, blending proven methods with new approaches.
This is where behavioral data becomes invaluable. By measuring and understanding how people naturally work, communicate and solve problems, construction firms can turn potential conflicts into complementary strengths.
One mid-sized construction firm in Chicago reduced attrition by 4% by applying behavioral insights to day-to-day functions across the company. Hiring the right fit involved aligning candidates’ natural traits with the needs of open positions versus strictly looking at skillsets. By learning how colleagues at different levels were wired to get the job done, team dynamics improved and conflict was addressed more effectively. The bottom-line impact was a savings of $180,000 annually.
Understanding the behavioral makeup of different generations of workers will uncover new, better ways to work together, unlocking new collaborations that directly impact your profits.
BUILDING THE FUNDAMENTALS OF A FUTURE-READY WORKPLACE
Once you understand your workforce from an intrinsic level, the real work can begin—creating a culture that attracts the right prospects, understands and supports current staff, and drives retention and performance.
Even in an industry known for its toughness, workplace culture matters. The fundamentals of an intentional work environment can be narrowed down to psychological safety, human connection and flexibility, which require:
- Creating a safe space for all employees: Workers need to feel comfortable expressing concerns, asking questions, reporting mistakes and taking calculated risks without fear of negative consequences. Sites with strong psychological safety report fewer accidents and solve problems faster because people don’t hesitate to speak up.
- Making room to connect: In today’s digital-driven landscape, a people-first mentality is more important than ever. Your best crew leaders know when project management software helps and when a face-to-face conversation gets better results. Prioritizing human connection in the workplace can enhance collaboration, reduce conflict, and increase job and client satisfaction.
- Allowing schedules to vary: A flexible work environment leads to a more balanced life and happier employees. While construction work is largely done on site, your estimators, project managers and administrative staff can often split time between office and home without impacting quality. The key is matching work arrangements to project needs and individual work styles.
Building a people-first workplace that earns full employee buy-in doesn’t happen overnight. Start by considering how each policy, program and corporate communication supports these fundamentals and what steps must be taken to course correct.
MAPPING OUT A SUCCESSFUL FUTURE
The American Institute of Architects’ Consensus Construction Forecast predicts spending in nonresidential building construction will dramatically decrease in the coming years. Whereas 2023 saw a 20% surge in nonresidential spending, 2026 is estimated to increase at just 2.6%.
This stark slowdown in growth makes now the perfect time for construction firms to strengthen their internal foundations before the next growth cycle. Here are three practical actions:
- Start with behavioral data when hiring: Use behavioral learnings to match candidates not just to skill requirements but to team dynamics and work environment. The best hire isn’t always the most experienced—it’s the person who complements your existing team’s strengths.
- Make behavioral insights visible and accessible: Don’t let valuable team insights sit in HR files. Train project leaders to understand their teams’ working styles and give them practical tools to leverage these differences on active jobsites.
- Measure what matters. Track retention, engagement and conflict resolution alongside traditional project metrics. The firms that understand the connection between team dynamics and project success will outperform their competitors in any market.
The construction firms that thrive in 2025 won’t just build structures—they’ll build people-centric workplaces that endure.
SEE ALSO: HIRING AND GETTING HIRED: HOW EMPLOYEES AND EMPLOYERS CAN BETTER CONNECT AS HUMAN BEINGS
