At mid-year 2026, skilled labor remains one of the construction industry's most persistent challenges. For construction firms, workforce constraints can affect more than hiring. They can influence project schedules, labor costs, subcontractor capacity and organizations' ability to take on new work.
More than 80% of contractors report difficulty filling hourly craft positions, according to the Associated General Contractors of America's 2026 Hiring & Business Outlook.
Several structural factors continue to put pressure on the labor pool. Nearly one in five construction workers is over the age of 55, contributing to concerns about retirements and the loss of experienced talent and institutional knowledge.
The Associated Builders and Contractors estimates that the industry needs to attract 349,000 new workers in 2026 and another 456,000 in 2027 to meet demand.
"The topic of qualified talent has remained one of the top concerns for the construction industry for quite some time," says Brian Cooper, Gallagher's senior managing director for US Construction. "As the market expands, construction companies continue to face challenges in securing qualified labor."
Workforce pressures can create broader business risks
For construction leaders, the challenge extends beyond filling open positions. A changing workforce can create additional considerations around training, supervision, knowledge transfer, quality control and project execution.
Cooper has also observed a connection between workforce pressures and construction defect risk.
"There's a 10-year statute of repose for defect claims in most states," he says. "Problems can exist that don't get discovered for eight or nine years that turn into general liability claims. We're seeing more of those types of claims than we had in the past."
The long development period associated with some defect claims underscores the importance of strong quality-control practices, effective supervision and consistent knowledge transfer as experienced employees leave the workforce.
Building the next generation of construction talent
At the same time, the industry has an opportunity to attract a new generation of workers.
Construction compensation continues to compare favorably with many other industries. Median annual pay for construction workers reached $66,400 in June 2025, approximately 10% more than the median across other industries.
Contractors, industry organizations and educational institutions are also expanding apprenticeship programs, mentorship initiatives and workforce development efforts designed to strengthen the talent pipeline.
Technology may provide another opportunity to introduce new workers to the industry.
"Many firms have strong intern programs that reach out to universities to recruit both men and women," says Jackie Robinson, Gallagher's managing director of operations for US Construction. "Construction incorporates a lot of technology, making it a compelling career choice, especially as the field undergoes rapid evolution."
Broadening the industry's talent pipeline will also be important. Women remain underrepresented in construction, but targeted recruiting, scholarships, mentorship programs and career development opportunities can help organizations reach a wider pool of potential workers.
"We see more women in all roles, which marks a significant change considering the industry has traditionally been male-dominated," Robinson says.
Making workforce strategy part of business resilience
There is no single solution to the construction industry's labor challenge. Competitive compensation can help attract talent, but construction firms also need to consider how they develop and retain employees once they enter the organization.
Gallagher's labor report identifies succession planning, knowledge transfer, safety training, apprenticeships and workforce retention as important considerations for firms navigating skilled-trade shortages. For construction leaders, the goal is to build the workforce capacity, skills and institutional knowledge the organization needs to execute projects effectively and support future growth.
Learn more about workforce, claims and other trends affecting construction firms in Gallagher's US Construction Market Mid-Year Report.