Recruiting & Retaining Skilled Labor in a Challenging Labor Market

The construction industry has always struggled to find skilled workers. Since the onset of COVID-19, however, these challenges have increased substantially. As a result, construction companies of all types are seeking solutions that will enable them to not only recruit but also retain new workers in this difficult hiring environment.

During the first few months of the pandemic, many construction projects were temporarily put on hold, causing construction contractors across the nation to lay off hundreds of thousands of workers. While the majority were quickly called back to jobsites, some chose not to return and, instead, opted to retire or work for another employer. In some cases, workers accepted jobs in completely different sectors of the economy. According to McKinsey & Company, “The prospect of higher pay and better working conditions … [tempted] experienced workers away from construction and into … other sectors.”

In addition, Associated Builders and Contractors (ABC), a trade association representing the construction industry, reports that since the end of the Great Recession in June 2009, the percentage of construction workers at the lower end of the age spectrum has declined. For example, the number of construction workers between the ages of 25 to 54 dropped by approximately 8%. Meanwhile, the share of workers that are older than 55 rose; and according to the Centers for Disease Control and Prevention (CDC), about 20% of construction workers are 55 or olderSince the industry’s average retirement age is 61, this means that about one-fifth of the industry’s workers may retire within the next six years. As a result, larger numbers of older, more experienced workers are leaving the construction industry while fewer younger workers are entering.

The construction industry is also competing with many other businesses for a shrinking pool of workers. The Wall Street Journal reports that the overall U.S. labor force is currently about 600,000 workers smaller than it was before COVID-19 began, or “several million smaller if you adjust for the increase in population.”

Then, on November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (IIJA) into law. According to the Wall Street Journal, the IIJA’s $550 billion in funding for infrastructure projects plus a lack of available workers will combine “to exacerbate existing employee shortages in the construction industry.” Moody’s Analytics anticipates that the IIJA’s most pronounced impact will occur during the fourth quarter of 2025 as approximately 872,000 more jobs result from planned infrastructure projects across the U.S.

In light of these and other factors, construction companies may wish to implement some of the following strategies to help recruit and retain workers: 

Take Steps to Attract the Next Generation of Workers 

Ways to attract the next generation of workers might include appearances at high school career days to offer construction as an alternative to college, presentations to veterans groups, or speaking engagements at local career and technical education (CTE) schools, community colleges, and universities. Explain that craft workers can advance within the company to roles such as foreperson, estimator, inspector, project manager, etc., and may eventually result in ownership of a construction company. suggests that developing a relationship with the leaders at CTE schools can be beneficial since these schools “offer construction programs with a strong potential pool of workers.”

Offer Enhanced Apprenticeship & Training Opportunities

Training and apprenticeship programs allow workers to develop and advance their skills and, in some cases, become cross-trained. It is important to invest in programs that will connect with your staff; for example, some companies utilize online and video training as well as augmented and virtual reality technology to better train their workers.

It can also be beneficial to regularly discuss opportunities for advancement with your employees so they know that their professional development is a priority to the company. Ultimately, these types of programs can result in the employee’s upward mobility in the company and, therefore, higher engagement and longevity.

Work to Recruit Women

Although men historically made up the majority of the construction workforce, women currently account for about 14% of workers and can be found in both the trades and management roles. In an interview with Bloomberg, Ariane Hegewisch, a senior research fellow at the Institute for Women’s Policy Research, noted that women’s role in construction is expected to grow, partly due to labor needs but also because states and localities want to award contracts to women see more diversity in construction.companies when they award contracts. 

Increase the Benefits Offered to Workers

Construction companies across the industry are offering increased wages in order to attract staff. The latest “Contractor Compensation Quarterly,” published by PAS, Inc., found that contractors project 2022 construction staff wages will increase by an average of 4.2%. Some companies are also offering bonuses, additional paid-time-off/holidays, and team lunches, as these types of benefits are valued by the younger generation.

Another way to help retain employees is improving health care benefits and safety standards so that employees know that the company has their best interests at heart and will be there to support them if they get sick or injured on the job.

Offer Employees a Chance to Own Part of the Company

Another valuable benefit is an employee stock ownership plan (ESOP), which gives workers ownership — and therefore an investment — in the company. A special report by Engineering News-Record suggests that one way for construction companies to increase engagement and loyalty is to offer an ESOP to employees. Additionally, Prairie’s 2nd Annual Construction Survey: ESOPs: Insights into 2021 and Beyond, found that, overall, employee-owned construction companies anticipate that having an ESOP will not only continue to drive the company’s growth during 2022 but also increase employee retention, even in a difficult labor market.

Develop & Enrich the Corporate Culture

Make your company a place where people like to work and feel valued. Talk to your workers about what they like and do not like. Then change what you can, and if there are matters that cannot be adjusted, help workers understand the reason(s) why. People like to feel that their opinions are valued.


While the construction industry has faced a considerable number of challenges in both keeping and attracting workers over the past several years, the industry nevertheless offers its workers the chance to build a rewarding, lifelong career with significant training opportunities, benefits, the opportunity for upward mobility, and even the possibility of owning a part of the company. Sharing in the prosperity of a construction company can not only help to attract but also retain workers.

About the Authors

Franco Silva

Franco Silva is Director at Prairie Capital Advisors, Inc. He advises middle-market companies on mergers and acquisitions (M&A), ESOP Advisory, fairness opinions and other investment banking advisory services.

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Harsh Patel

HARSH PATEL is Senior Associate of Prairie Capital Advisors ( in Chicago, IL. He is part of the ESOP advisory team focusing on valuation, feasibility, and transaction structuring and is involved in executing sell-side ESOP engagements and capital structuring projects by preparing correspondence, narrative reports, marketing information, and presentations for clients nationwide.

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