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, an overwhelming 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, underscoring the continued need for effective recruitment and retention strategies.
To help better understand how the industry is addressing workforce issues, Arcoro included several additional questions in the 2024 AGC survey that were not released with the overall results.
These findings, synopsized below, demonstrate areas where companies are focusing their efforts in terms of recruiting, upskilling and retention. We also wanted to learn how businesses are using technology to deliver key HR processes and how they are leveraging data to inform decision-making.
We found that the industry is actively pursuing a variety of new employees to fill workforce gaps, with many using culture as an effective recruiting tool.
While companies understand the importance of upskilling and feedback/performance management, relatively few have turned to technology to help them with delivery and administration, representing a potential area of process improvement that may help free staff to focus on other work.
As companies manage a workforce that is stretched thin, just over a third are using business intelligence and data to maximize their strategy planning and management. Analytics of HR and workforce data can help organizations make more informed decisions about everything from hiring practices to project staffing to safety management. We see this as an area of high potential as more companies tap into the value of their data.
The industry is expanding recruitment horizons
Historically, most workers in the construction industry have been white males, although that has been changing over time. There is increasing recognition that the workforce needs to expand and employ talent from across different demographics, and our results indicate companies are actively 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 employees are new hires and veterans, which may present some challenges as both groups are limited by how many students graduate and how many veterans are transitioning to civilian life each year.
Career changers represent a somewhat untapped resource; these individuals possess work experience but are seeking new career paths. It may be more challenging to target these potential new hires since they may come from various backgrounds and don’t represent a cohesive pool. However, companies that focus on career changes may face less hiring competition.
Additionally, over 30% of companies report actively recruiting those who have been previously incarcerated, reflecting the industry’s willingness to consider a variety of backgrounds as they look to fill open positions.
Companies see culture as a competitive advantage
In a competitive labor market, company culture can play a crucial role in both attracting and retaining employees, and many organizations across the industry are using culture to their advantage. Just over half of the companies surveyed report having a well-defined culture that they actively promote, which helps in recruiting and retention efforts. However, around 20% either lack a defined culture or do not promote one. That offers an area of improvement for those companies, especially as they compete for talent.
Companies that recognize the importance of having and promoting a strong culture may find themselves benefiting from a competitive edge in their hiring strategy.
Upskilling may be taking a back seat to recruiting
Ongoing training and upskilling are essential for companies seeking to maximize both productivity and retention, especially when labor is scarce. It’s also important when hiring workers that may need to acquire new skills, such as career-changers or those not graduating from a construction program in college or trade school.
While some companies prioritize employee development, nearly 24% have not implemented any upskilling techniques. Among those focused on training, the most common strategies include strengthening performance management, with 45% of companies using this method to identify areas for employee improvement. Other techniques include partnering with third-party organizations for training (34%) and implementing career pathing (32%).
Despite these initiatives, many companies may still be struggling to effectively manage training processes. A staggering 75% do not use technology to deliver or track training, relying instead on manual methods that can lead to inefficiencies and compliance risks and that may translate into a less impactful approach overall.
The management and delivery of training and upskilling represents an area where more companies can seek improvement to ensure employees receive necessary and effective training and skills enhancement efficiently.
Companies are addressing the need for feedback but can gain additional efficiencies
Feedback and performance management are critical components of employee development and workforce management. This is reflected in the findings with more than half of companies conducting formal annual performance reviews. Another 36% have informal review processes.
However, 14% lack a formal feedback mechanism altogether, missing opportunities for engagement and growth discussions that can power increased productivity and retention. Given the project-based nature of construction, timely feedback can be especially valuable. Yet only 20% of companies provide project-based feedback.
Despite the apparent value of performance management, only 14% of companies leverage technology to deliver and maintain performance data. Using a manual approach can make the feedback process slow and inefficient, and it doesn’t allow for any reporting or data-based performance insights.
Data analytics represents an emerging opportunity for better workforce management
Data analytics can contribute to more targeted and meaningful workforce planning and management. However, nearly 49% of respondents don’t use any form of business intelligence to inform their strategies. While 35% use available data, many companies may not yet fully appreciate and embrace the potential benefits of data-driven decision-making.
Those who leverage data report its value, yet the vast number of companies not using data may be hindered by outdated processes, decisions based on guess work or intuition or a lack of knowledge regarding the business impact of appropriate workforce data utilization.
Creating the future of the construction workforce
The construction industry is actively working to reinvigorate and reinvent the workforce by expanding recruiting efforts and doubling down on core HR processes that support hiring and growth. But the efforts are not unilateral; some companies are focused primarily on finding new employees but less on managing them effectively once they’re on board.
Use of technology and data is also uneven across the industry, representing a significant opportunity for companies to modernize their HR processes to be more efficient and effective across the entire employee life cycle to maximize productivity both of employees and HR staff.
As the industry continues to recruit from new talent pools, the HR infrastructure that ensures those new employees are successful and engaged needs to be strengthened. More focus on training and upskilling, better performance management delivery and tracking and an enhanced use of data analytics for workforce oversight will all help support the emerging construction workforce.