Workforce Evolution Trends: What Construction Leaders Should Know

To stay competitive, close the skills gap, and adapt to change, the following are key workforce considerations for the construction industry today:

1. Aging Workforce and the Skills GapWith 40% of the construction workforce nearing retirement, many experienced workers are leaving the industry at a faster rate than they can be replaced. Despite increased enrollments in trade schools and apprenticeships, contractors must directly address this significant skills gap to meet project demands themselves. 
   
   Forward-thinking companies are investing in mentoring initiatives, such as strategic partnerships with community colleges, vocational schools, and apprenticeship programs, to facilitate skill transfer and enhance their talent pipelines. While some experienced professionals may initially resist these changes, viewing mentorship as “babysitting,” rather than a strategic handoff of knowledge, it’s essential to reframe the effort as an investment in the company’s legacy.  
   

2. Technology Is Transforming the Workforce
   By 2030, it is expected that 70% of workers will require advanced skills in technologies such as artificial intelligence (AI), data analytics and robotics to remain competitive in their respective industries. To bridge the growing skills gap, contractors should invest in training to ensure that workers possess these skills and shift hiring practices to prioritize recruiting candidates who combine traditional trade skills with digital capabilities. 

3. Changing Work Preferences Among Younger Workers
   Across professions, younger generations, particularly Millennials and Gen Z, are prioritizing work-life balance, career advancement and a positive workplace culture. To attract and retain this talent, construction firms must look beyond traditional pay structures and consider flexible work options. Many contractors are adopting customized deferred compensation, bonus and retirement plans. Employee retention strategies should include clear career progression plans, regular feedback mechanisms and continuous training opportunities. 

4. Gig Work and the Rise of Flexible Labor Models 
   In response to labor shortages, many contractors are adopting flexible workforce models, such as gig-style arrangements, part-time roles and project-based contracts, which are likely to become more prevalent as labor shortage problems worsen. Some firms create internal talent pools of on-call specialists and others leverage digital platforms to connect with independent contractors.

   While this approach provides specialized expertise and greater flexibility to adapt to fluctuating project demands, careful management is essential to ensure project continuity and maintain quality standards. 

5. Strategic Partnerships
   External pressures, including impacts from tariffs, rising material costs, market volatility and supply chain disruptions, are prompting contractors to explore more collaborative business models. Contractors are forming partnerships with neighboring businesses or firms in adjacent markets to pool resources and share risks, allowing them to take on more complex projects. Many contractors are also establishing formal talent-sharing networks, enabling employees to move between companies as project demands fluctuate. 

6. Alternative Ownership Structures
   As retiring owners evaluate their exit strategies, succession planning has become a priority in the industry. Private equity-backed consolidations are on the rise, resulting in larger, more capitalized firms with increased resources. Many contractors are exploring alternative ownership structures, such as Employee Stock Ownership Plans (ESOPs) or gradual internal transitions, to preserve company culture and create opportunities for employee growth and development. 

For more information, contact Ronald J. Eagar, CPA, CCIFP Partner at Grassi, at reagar@grassiadvisors.com, through www.grassiadvisors.com or 516-336-2460.