7 HR Challenges in the Construction Industry

Did you know that 44% of the skills currently needed in the construction and engineering industries are expected to change in the next 5 years? As if the ongoing talent shortage could get any more complicated!

Today’s HR pros in construction face a mounting heap of challenges, but with the right tools and strategies, you can help your company clear the clutter and come out stronger on the other side by:

• Dialing in your HR processes for efficiency and accuracy
• Building a more agile workplace that can adapt to evolving industry trends
• Creating safer, more productive work environments for all of your workers

Here are 7 top challenges HR pros in construction deal with today, along with recommended solutions for each one.

1. Construction work can be unpredictable and fluid

The seasonality of construction work isn’t the only variable professionals in the industry have to deal with. Each project often requires a different mix of personnel with varying skill sets, certifications, and pay structures.

Add to that the need to adapt to changing project scopes, deadlines, and budgets, and you have a potential logistical nightmare on your hands. It’s a lot for HR to juggle, and many struggle without the support of modern HR tech.

HRIS are designed to streamline HR processes, boosting overall workplace efficiency and performance. For HR pros in construction, budget constraints and lack of buy-in from leadership or other departments often stand in the way of investing in and adopting new technology.

Our recommendation

With the changing prioritization of skills in this industry over the next few years, demand is also rising for more digital skills in construction, such as data and analytics, cloud computing, and software development.

Now is the time to press the business case for an HRIS that unlocks breakthroughs in each of these areas. For example, when you have access to your company’s data and can generate reports in a few clicks, you can provide better forecasting for staffing needs and cut back on wasteful spending.

Use this ROI calculator and HRIS Buyer’s Guide to start building the business case for an HRIS that not only scales with your company’s needs, but provides the following features:

• Data analytics and reporting
• Payroll, benefits, and time tracking
• Performance management
• Employee records
• Hiring and onboarding

2. Workers face health and safety risks

When it comes to protecting construction employees, hard hats are only the beginning. Construction sites are fraught with potential hazards, from falls and back strains to more severe accidents. According to the Bureau of Labor Statistics (BLS), the construction industry has the highest number of fatal work injuries compared to other industries.

It’s HR’s responsibility to ensure the safety and wellbeing of their workforce. You’re the ones who must oversee safety training programs, enforce compliance with OSHA regulations, and effectively communicate health-related benefits and policies.

Moreover, you need to foster a psychologically safe culture where employees feel empowered to report hazards and prioritize safety in their daily tasks.

Additional safety-related challenges HR pros face include:

• Creating trust: Building trust with workers can be challenging, especially when implementing new safety protocols or policies that may be perceived as inconvenient or restrictive.
• Employee buy-in for safety and operational changes: Resistance to adopting new practices, such as ergonomic safety measures or paperless systems, can hinder efforts to improve worker safety and operational efficiency.
• Managing drug testing without disrupting operations: Balancing the need for drug testing to ensure a safe work environment with the challenge of not interrupting shifts or delaying work productivity can be tricky.

Our recommendations

This checklist just for HR in construction is a great place to start for getting all your compliance ducks in a row, but an easy-to-use HRIS with intuitive employee records that allows you to track employee training is the key to ensuring employees are all properly and regularly up-to-date on their safety training.

• Enhance safety training programs: Regularly update and conduct safety training sessions to ensure compliance and safety awareness.
• Practice transparent communication: Foster open communication channels to build trust and encourage feedback from workers.
• Streamline drug testing protocols: Implement drug testing protocols that minimize disruption, such as on-site testing services.

3. Talent pools for specialized roles are small

The construction industry relies on a diverse range of skilled trades and specialized roles, and finding individuals with special expertise, like carpentry, welding, and electrical work, is becoming an increasing challenge.

This specialized talent shortage is further intensified by the ongoing skills gap in the construction industry, with 83% of firms that have openings for craft workers reporting that these positions are “as hard or harder” to fill than they were a year ago.

As experienced workers retire and fewer young people enter those trades, the pool of qualified candidates for specialized roles will continue to shrink. This makes it challenging for HR professionals to fill critical positions and maintain project timelines.

Our recommendations

• Expand your search beyond traditional channels: Use social media, job boards, and employee referral programs to reach a wider pool of candidates.
• Partner with educational institutions: Collaborate with trade schools, vocational and apprenticeship programs, and universities to find and recruit qualified graduates.
• Offer competitive compensation and benefits packages: Attract top talent by offering competitive wages, benefits, and career development opportunities.
• Develop internal training programs: Invest in training and development programs to upskill existing employees and prepare them for specialized roles.

4. Construction faces high turnover and employee movement

Maintaining a stable workforce and retaining skilled employees is a major challenge for HR professionals in construction, an industry known for its transient labor force. Project-based work, seasonal fluctuations, and the prevalence of subcontracting contribute to high turnover rates.

The cyclical nature of the industry is also characterized by periods of intense work followed by layoffs or downtime, and this constant churn creates other hurdles, such as:

• Project continuity disruptions
• Struggle to maintain team cohesion
• High recruitment and training costs

Our recommendations

• Focus on employee retention and referral programs: Offer incentives and rewards for employees who stay with the company and refer new hires.
• Create a positive work culture: Foster a supportive and collaborative work environment where employees feel valued and appreciated.
• Offer career development opportunities: Provide opportunities for employees to learn new skills, advance their careers, and take on more challenging roles. (This is especially important for specialized roles and craft work.)
• Improve communication and transparency: Make it easy for employees to access HR and the resources designed to support them. (E.g.,The BambooHR^® Mobile app for communication with onsite workers.)
• Build a compelling compensation strategy: Offer competitive pay, meaningful benefits, and unique perks to attract and retain reliable, high-performing talent.

5. Construction labor shortages make hiring harder

The number of open construction jobs far exceeds the number of people looking for work in the industry, with 456,000 unfilled positions in February 2024 and 80% of executives reporting difficulty finding candidates for open spots. In short, there’s a widening gap between the work that needs to be done and the qualified talent available to do it.

Why? There’s a lot of moving parts, some we’ve mentioned in previous sections:

• An aging construction workforce
• Younger workers’ lack of interest in the industry, and
• The impact of technology and automation on the types of skills that are in increasing demand (digital skills like cloud computing and software development, and soft skills like people, business, and supplier management)

Our recommendations

• Diversify your talent pool: Increase the number of channels feeding your talent pool by focusing on recruiting from underrepresented groups:
  • Formerly incarcerated individuals (aka second-chance citizens): Fair chance hiring outlines best practices for helping individuals re-enter the workforce after serving a prison sentence.
  • Women: Women represent at least half the population, but they made up only 11% of the construction workforce in 2025, according to the BLS. Audit your hiring process and job descriptions for biases that may be discouraging women from applying or filtering them out during the screening process.
  • Immigrant and refugee populations: According to Associated General Contractors of America (AGC), currently only 10% of firms use temporary work visa programs to find salaried or hourly craft employees, as recent immigration enforcement escalations have increased the complexity and risk for firms as well as the immigrant population in the US.
• Promote cross-training and flexibility: Develop a skills-based approach to recruiting and talent development as opposed to a role-based approach. This will help you create more versatile, cross-functional teams that can help fill or mitigate skills gaps.
• Appeal to a younger workforce: In addition to building a more attractive compensation package, appealing to Gen Z workers means creating a flexible, safe, and transparent work culture that meets their expectations and aligns with their values.
• Spend some time shadowing the jobs you’re hiring for: Nurture your relationships with superintendents and project managers to build trust and cooperation as you seek candidates for the roles they need filled.

6. Managing subcontractors and external contractors

Construction projects often involve a complex network of subcontractors and external contractors, each with their own management structures, safety protocols, and compliance requirements. This creates a unique challenge for HR professionals, who must ensure that all workers on a project, regardless of their employment status, are properly trained, insured, and compliant with safety regulations.

It’s difficult to maintain consistent standards across different organizations, especially when it comes to benefits administration, safety training, and compliance with labor laws. This can lead to inconsistencies, miscommunications, and potential legal liabilities.

Our recommendations

• Establish clear contracts and agreements: Outline expectations, responsibilities, and safety requirements for all subcontractors.
• Conduct regular safety audits and inspections: Ensure that subcontractors are complying with safety regulations and best practices.
• Provide training and support to subcontractors: Make it easy for subcontractors to understand your company’s policies and procedures.
• Integrate subcontractors into your safety culture: Include subcontractors in safety initiatives, and encourage them to report hazards or concerns.
• Upgrade and consolidate your tech stack: If you’re still working out of spreadsheets or separate systems, switching to a complete, integrated platform for all your data wrangling, documentation, and administrative needs is the best thing you can do to make the day-to-day work of managing subcontractors easier.

7. Meeting the needs of a diverse workforce

Meeting employees where they’re at is a universal challenge for all HR professionals, but in construction that challenge often includes supporting workers with limited English
proficiency, workers with varying education levels, and unbanked workers.

These differences require HR to adopt a more inclusive approach to policy development, communication, and training. They need to ensure that all employees, regardless of their background, have equal access to their employee information, training programs, and development opportunities.

Additional communication barriers may also include remote work settings and working across multiple time zones or work sites, requiring strategic ways to keep everyone on the same page.

Our recommendations

• Centralize access to HR: An all-in-one, multilingual HR software with mobile access makes it easy to manage the HR needs of a diverse workforce, from time tracking and payroll to benefits and performance management.
• Conduct regular satisfaction surveys: Be proactive about collecting employee feedback on their experience with your company before small problems become big ones.
• Foster a culture of inclusion: Create a work environment where all employees feel welcome, respected, and valued.
• Provide flexible payment options: Consider providing paper checks or prepaid cards to unbanked employees.