Skilled Labor Shortage Intensifies Despite Economic Recovery

Words: Dan KamysFMI Corp, a provider of investment banking and management consulting services for the engineering and construction industry, has just released its 2015 Talent Development Survey in the Construction Industry, and the results reveal intensifying labor shortages, a widening gap between employer offerings and employee demands, and a lack of standard processes and frameworks among the top findings in the survey. “People-development is critical to companies’ future success and ability to stay competitive. It is especially important in an environment of skilled labor shortage and increasing competition.” said Chris Daum, president of FMI Capital Advisors. “Firms need to have strategic and holistic processes in place for recruiting and retaining talent in order to stay viable today and in the future.” The survey, taking insights from executives and employees of companies in the E&C industry, presents findings on various aspects of people development, including talent retaining, labor force structure and dynamics, standard processes and frameworks, measurements, succession plans and corresponding company development strategies. The survey examines the challenges and trends impacting the construction industry as well as identifies the training strategies that are now required to maximize performance and development. Skilled Labor Shortage Grew Over 30 Percent One of the leading findings is that skilled labor shortages are intensifying and broadly affecting construction firms. The survey shows 86% of respondents reported that their company was experiencing skilled labor shortages, compared with only 53% two years ago, a 30% increase in the gap. This situation stems from the structural mismatch of labor capabilities and employer demands, as well as the continuing fallout of the last recession. Moreover, the extent of labor shortages is probably more severe than expected and is starting to impact construction firms nationwide. The survey also reveals an intriguing mismatch where employee engagement is concerned, especially among millennials. Employers surveyed cite offering competitive pay (89%), providing an enjoyable work environment (81%) and offering training opportunities (76%) as the top-three methods they use to retain key talent in the construction industry. Conversely, millennial employees list the top three important factors for keeping them engaged are competitive pay (29%), work-life balance (23%), and personal development (16%). Other key findings include:
  • Companies in the construction industry lack processes to develop and promote high-performing employees
  • Executives and field manages are expected to have the highest attrition rates over the next five years
  • The majority of firms don’t connect training expenditures and performance management metrics
  • Annual performance reviews are a top priority for increasing employee performance and development
  • Having a defined and well-communicated vision is critical to retaining key talent, regardless of age.
Business Implications The Talent Development Survey in the Construction Industry offers a roadmap for companies looking to strengthen existing people development programs and build out future talent-retaining strategies. Companies can benefit from developing a firm-wide vision that encourages culture and building project management and field supervision capacity. In the meantime, companies can invest in creating and implementing an effective performance management process. Randy Nemchin, a senior consultant at FMI, presented the findings of the survey report at AGC Construction HR & Training Professionals Conference on October 9th, 2015. To download the full survey report, please visit http://info.fminet.com/acton/fs/blocks/showLandingPage/a/9013/p/p-0047/t/page/fm/0    
From Day One to Long-Term Success: Onboarding Strategies for Contractors
January 2026

The construction industry is facing one of its toughest challenges in decades. Companies are struggling to find enough skilled workers while competing to keep the ones they have. At the same time, projects are becoming more complex, deadlines are tighter,

Matt Dibara
Business Management
Read More
Finding the Right PPE for Your Work
January 2026

When it comes to PPE, one thing’s for sure: safety isn’t one size fits all. The work you’re doing, where you’re doing it, and even what time of year it is, can all make a big difference in what gear actually works. Price, comfort, and job performance all

Greg Brown
Safety Library
Read More
Back Injuries: The Real Cost and How to Prevent Them
January 2026

The mention of back injuries makes mason contractors cringe, and for good reason. Masons lift heavy objects every day, all day long. When a person sustains a back injury, it is serious. It affects every part of their life, from their ability to perform wo

Zach Everett
Safety Library
Read More
Detailing for Durability: The 2026 Guide to High-Performance Stone Veneer Transitions
January 2026

Some of the most expensive failures involving manufactured stone veneer installations don’t come from the stone at all, but rather from the material transitions and flashing around it. Transitions are weak points in the overall cladding where water can fi

Jeff Tew
Technical Talks
Read More