Tackling the Talent Gap in Construction - Arcoro

Key Findings on the Industry’s Strategies for Recruiting, Retention and Workforce Management

The construction industry continues to face challenges related to finding and retaining skilled workers. According to the 2024 Workforce Survey from the Associated General Contractors of America (AGC) and Arcoro, 94% of companies report difficulty in hiring employees, including both salaried and craft positions. This shortage has resulted in project delays for over half of the companies surveyed, highlighting the need for effective recruitment and retention strategies.

Arcoro included additional questions in the 2024 AGC survey to better understand how the industry is addressing workforce issues. The findings below demonstrate where companies are focusing their efforts in recruiting, upskilling, and retention, as well as how they are using technology and data to inform decision-making.

The industry is actively pursuing a variety of new employees to fill workforce gaps, with many using company culture as a recruiting tool. While companies recognize the importance of upskilling and feedback/performance management, relatively few have adopted technology to assist with these processes, representing a potential area for improvement. Just over a third are using business intelligence and data to maximize strategy planning and management, suggesting high potential for growth as more companies leverage their data.

The Industry is Expanding Recruitment Horizons

Historically, most workers in the construction industry have been white males, but this is changing. Companies are increasingly looking to hire from multiple talent pools:

• ​Women: 79%
• ​Veterans: 80%
• ​Minorities: 81%
• ​Formerly incarcerated individuals: 35%
• ​New graduates: 85%
• ​Career changers: 51%

Among the most recruited are new graduates and veterans, though both groups are limited by the number of students graduating and veterans transitioning to civilian life each year. Career changers, who possess work experience but seek new career paths, represent a somewhat untapped resource. Over 30% of companies are also recruiting formerly incarcerated individuals, reflecting a willingness to consider diverse backgrounds.

Companies See Culture as a Competitive Advantage

Company culture plays a crucial role in attracting and retaining employees. Just over half of surveyed companies report having a well-defined culture that they actively promote, aiding recruitment and retention. Around 20% either lack a defined culture or do not promote one, presenting an area for improvement as they compete for talent. Companies that prioritize and promote a strong culture may gain a competitive edge in hiring.

Upskilling May Be Taking a Back Seat to Recruiting

Ongoing training and upskilling are essential for maximizing productivity and retention, especially when labor is scarce or when hiring workers who need to acquire new skills. Nearly 24% of companies have not implemented any upskilling techniques. Among those that do, common strategies include:

• ​Strengthening performance management (45%)
• ​Partnering with third-party organizations for training (34%)
• ​Implementing career pathing (32%)

Despite these initiatives, 75% of companies do not use technology to deliver or track training, relying on manual methods that can lead to inefficiencies and compliance risks. Improving training and upskilling processes represents an opportunity for companies to ensure employees receive effective skills enhancement efficiently.

Companies Are Addressing the Need for Feedback but Can Gain Additional Efficiencies

Feedback and performance management are critical for employee development and workforce management. More than half of companies conduct formal annual performance reviews, while another 36% have informal review processes. However, 14% lack a formal feedback mechanism, missing opportunities for engagement and growth discussions. Only 20% of companies provide project-based feedback, which can be especially valuable in the project-based construction industry.

Despite the value of performance management, only 14% of companies use technology to deliver and maintain performance data. Manual approaches can make feedback slow and inefficient, and do not allow for reporting or data-based insights.

Data Analytics Represents an Emerging Opportunity for Better Workforce Management

Data analytics can contribute to more targeted and meaningful workforce planning and management. Nearly 49% of respondents do not use any form of business intelligence to inform their strategies. While 35% use available data, many companies may not fully appreciate the benefits of data-driven decision-making. Those who leverage data report its value, but many are hindered by outdated processes or a lack of knowledge regarding the business impact of workforce data utilization.

Creating the Future of the Construction Workforce

The construction industry is working to reinvigorate and reinvent the workforce by expanding recruiting efforts and focusing on HR processes that support hiring and growth. However, efforts are not uniform; some companies focus primarily on finding new employees but less on managing them effectively once hired.

Use of technology and data is uneven across the industry, representing a significant opportunity for companies to modernize HR processes and maximize productivity. As the industry recruits from new talent pools, HR infrastructure must ensure new employees are successful and engaged. More focus on training and upskilling, better performance management delivery and tracking, and enhanced use of data analytics will help support the emerging construction workforce.