Key findings
Under Pressure: The Workforce Shortfall
As workforce dynamics change, construction companies are under growing pressure to manage with fewer workers. The gap between labor supply and demand is growing, and it’s having a real impact on project delivery. According to our research, in the U.S., 65% of organizations say labor and skills shortages have impacted their ability to achieve project goals, and 58% believe the problem will grow worse over the next year or two. On average, more than 35% of projects are delayed directly due to skilled labor shortages, and 28% due to unskilled labor shortages. Three main issues are driving this: an aging workforce, fewer new workers, and tighter immigration rules.
Nearly one in five construction workers are 55 or older. Many are retiring, which removes tens of thousands of skilled workers each year. The median age in the industry is now 42. Gen Z makes up just 16.8% of the workforce.¹ KPMG estimates the industry needs to hire about 740,000 people each year to replace those leaving and support growth.² This is more than the industry has ever hired before.
Skilled trades are especially affected. There is a shortage of 500,000 trade workers, including electricians, plumbers, and heavy-equipment operators.³ These jobs take years of training. Schools and training programs are not attracting enough young people. Since the rise of the internet, blue-collar jobs like construction have lost social status. More high school graduates are going to college, and fewer are choosing trade schools.
Immigration challenges are making things worse. Immigrants make up about 25% of the U.S. construction workforce, and over 40% in states like Texas and California. Recent immigration raids have caused major disruptions. Some sites lost half their workers overnight. This led to delays and higher labor costs. Experts say that if 1.4 million undocumented workers are removed, delays and cost overruns will increase.⁴ This is about 6% of the overall construction population.
Mega projects are exacerbating the problem. These projects, which often cost more than $1 billion, are on the rise. They demand a lot of skilled workers and special trades. This makes it harder to find workers and pushes wages higher. In busy markets, these large-scale projects can hire most of the local workforce. That leaves smaller projects struggling to find available labor.
As the market becomes more competitive to hire and retain skilled labor, construction worker wages are rising. In 2024, construction wages grew 4.4%, faster than most other industries. In saturated markets, labor costs are even higher. Owners are now offering hourly incentives and per diem to attract workers. Across the U.S., owners pay between $5 and $10 per hour for incentives and around $10 to $30 per day for per diem. They also offer a perfect attendance and on-time completion bonus. These incentives are added to project labor agreements and increase overall costs. These strategies are especially common on mega projects, where labor demands are highest and timelines are tight.
Labor usually makes up about half of a project’s total cost. To reflect this in estimates, Currie & Brown uses historical data to break down labor and material costs by building type or trade. This helps clients understand current labor conditions and plan their budgets more accurately.
Labor shortages, especially in the context of mega projects, are making it harder to plan, affecting both costs and timelines. When planning and budgeting projects, clients now need to think about local worker availability, rising wages, and the chance that jobs may shift or be lost.
Chad Chapman
Director Currie & Brown
"We now include extra line items in every estimate to cover labor incentives, travel for remote crews, and the cost of finding and keeping workers. We also recommend clients plan earlier and work with the local community. This isn’t just about permits or logistics. It’s also about building trust, hiring local workers, and becoming known as a great place to work. These steps show a more open way of thinking. They help lower risks, keep workers longer, and make sure projects stay on schedule."
Chad Chapman
Director Currie & Brown