The Labor Shortage: Practical Ways Contractors Can Help Find, Keep, and Develop Skilled Workers

The labor shortage is one of the biggest challenges that contractors are facing today—and it is not just a labor shortage, but a shortage of skilled labor. This problem can result in having to turn down work, postponing projects, challenges in completing projects, overworked employees, quality control issues, and increased costs for the company.

July 1, 2026 | Contractor

A contractor may have a full backlog and plenty of opportunities, but every new project raises the same question: Who is going to do the work?

For many contractors, the labor shortage is not an industry statistic. It shows up in tighter schedules, overextended supervisors, and difficult decisions about which jobs to accept. The challenge is not simply finding workers. It is finding people who can work safely, fit with the crew, learn quickly, and take on greater responsibility over time.

Recent data shows the pressure is not letting up. In the 2025 Workforce Survey from Associated General Contractors of America (AGC)/National Center for Construction Education and Research (NCCER), 92% of construction firms with openings reported difficulty finding qualified workers. AGC also reported that 88% had openings for craft workers, and 45% experienced project delays because of shortages of their own workers or subcontractors’ workers. For contractors, those numbers show up in practical ways: tired crews, longer schedules, and training gaps.

Find the Workforce Gap

Before posting another job ad, it helps to identify where the need truly exists.

Is the company short on laborers, experienced craft workers, foremen, project managers, or licensed tradespeople? The answer should shape the hiring strategy.

For example, hiring additional entry-level workers may not solve a shortage of experienced supervisors. In some cases, it can create additional pressure if foremen are already stretched thin managing projects and training new employees.

It is also worth examining what happens after employees are hired. Unclear expectations, rushed onboarding, limited training, or overreliance on dependable workers can contribute to turnover and make staffing challenges worse.

Use Technology to Eliminate Time Wasters

Technology can help, but only when it removes obstacles from the work.

Take a good look at the places where labor hours disappear: rework, layout mistakes, material handling, unclear plans, delayed approvals, paper forms, duplicate data entry, or unnecessary drive time.

Depending on the business, it may make sense to invest in project management software, digital time tracking, updated estimating tools, GPS or laser-guided equipment, lifts for overhead work, or battery-powered tools.

Start with the problem, not the product. Ask the field where time is being wasted. The crew usually knows.

Keep Good Employees from Burning Out

Recruiting tends to get a lot of attention, but retaining employees should matter just as much, if not more.

AGC reported that seven out of eight firms raised base pay as much or more than they had the year before, and 42% started or increased spending on training and professional development. Pay matters, and so do the conditions around the work.

Good employees notice whether schedules are realistic, tools and equipment are maintained, and when the same individuals are relied on to solve preventable problems.

Reliable employees often become the backup plan. They get the complicated or rushed the difficult customer, or the short-staffed crew because they can handle it. That may work for a while, but even strong people can burn out if support never catches up with expectations.

Retention is not just about keeping people on payroll. It is about making sure the people worth keeping can keep doing good work without being worn down by it.

Make Training Part of the Job

Most contractors understand the value of apprenticeships and entry-level development. The challenge is time.

In the short term, training can slow down an experienced employee, but without a pipeline, the same labor problem keeps coming back.

The U.S. Department of Labor (DOL) reported 480,399 apprentices served in construction in 2025, a 28% increase over five years. That growth is encouraging, but training still has to work at the company level.

A practical training plan doesn’t have to be complicated. It should give new employees a clear 30-, 60-, and 90-day path. It should pair them with someone who has the patience to teach, not just the strongest technical skills. It should explain what good work looks like on the company’s jobs, teach safety expectations early, and create opportunities for check-ins before frustration turns into turnover.

It's also worth being honest about who should train. The best craftsperson is not always the best teacher. Sometimes they are too busy, too impatient, or simply too used to doing the work themselves.

Write Job Posts That Reflect Reality

A strong job post is clear about the work: schedule, travel, physical demands, weather, overtime, required licenses, tools, safety expectations, and advancement opportunities. It should also describe the type of projects the company actually handles. The result may be a smaller pool of better-matched candidates.

Instead of saying “great culture,” show what that means. Do foremen teach? Are newer employees paired with experienced team members? Are schedules communicated early? Does the company support certifications or promote from within?

Specific details help candidates picture the job before they accept it.

Expand Recruiting Efforts

The skilled trades still have an image problem in some circles. Some students hear far more about four-year degrees than trade careers. Some career changers do not realize how many paths exist. Some women, veterans, and underrepresented workers may have the ability and discipline contractors need but may not see a clear way in.

If the same recruiting approach keeps reaching the same shrinking group of people, the circle may need to get bigger. That could mean building stronger relationships with high schools, technical colleges, career and technical education programs, workforce boards, veterans’ groups, local associations, and community organizations.

AGC reported that 52% of firms engaged with career-building programs at high schools, colleges, or career and technical education institutions. This work may not fill an opening this week, but it can help people see the trades as a career before they have already chosen another path.

Your Best Recruiters May Already Work for You

Employee referrals can be one of your biggest assets because good workers often know other good workers. They know who shows up, who works safely, who takes pride in the job, and who would fit well with the crew.

A referral program still needs structure. What counts as a referral? When is the bonus (if any) paid? And does the referred employee need to be in good standing?

The best question may be a simple one: would the employee want this person on their own crew? Then the program becomes less about filling seats and more about protecting the quality of the team.

Labor Shortages Can Create Safety Blind Spots

Short staffing can put a quiet pressure on safety, and that pressure tends to show up in the field.

The Bureau of Labor Statistics (BLS) reported 167,100 nonfatal recordable injury and illness cases in construction in 2024, including 100,500 cases involving days away from work, job restriction, or transfer. Labor planning and safety planning are closely connected.

When staffing is tight, contractors may want to ask:

Are tasks being assigned by skill level or by who is available?
Are newer employees getting enough supervision?
Are foremen stretched too thin?
Are crews getting enough time to work safely?
Is the company taking on work faster than it can staff it well?

Those questions are easier to ask before an injury, rework, or delay forces the conversation.

Be Selective About the Work You Take On

When work is available, saying no can feel wrong. But taking on more than a team can handle can create problems that show up later: missed deadlines, tired crews, quality issues, strained subcontractor relationships, and safety concerns.

Sometimes the strongest workforce decision is being selective. Winning work is good, but winning work that cannot be adequately staffed can become a different kind of problem.

Plan Before the Pressure Hits

The contractor labor shortage is unlikely to be solved by a single job posting, signing bonus, or technology purchase.

Contractors are often in a stronger position when they approach workforce planning the same way they approach safety, quality, scheduling, and risk management. That means investing in employee development, retaining experienced workers, using technology strategically, building industry relationships, and staying connected to the realities of the field.

As your workforce, equipment, vehicles, or project mix changes, your risk exposure may change as well. Reach out to your independent insurance agent about whether your current coverage still reflects how your construction business operates today.

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