The construction industry is in a state of rapid change, and one could even argue it’s experiencing some disruption. Multiple trends are coming together, creating shifts that are impacting the construction labor market. These changes have a direct effect on construction project management.

For construction project managers, the challenge lies in navigating this evolving market and staying up to date on the latest labor trends to plan and execute projects effectively.

In this article, we’re going to take a closer look at some of the trends affecting construction.

Current Labor Market Trends and Their Impact on Construction Project Management

There are four main trends affecting the construction industry that we should consider when thinking about construction project management:

• Persistent labor shortages
• Demographic shifts
• Rising labor costs
• Skills gaps and technology adoption

Persistent Labor Shortages

Persistent labor shortages are putting significant pressure on the construction industry as a whole. According to an ABC News report, the industry anticipates needing more than 500,000 additional workers in 2024 alone to meet project milestones. This shortage is influenced by several factors.

One key issue is a demographic shift, with an aging workforce and fewer younger generations showing interest in construction careers. This decline in interest is exacerbating workforce shortages. Additionally, the construction industry is facing competition from other sectors, where skilled labor is often drawn away by higher wages or better working conditions.

Retention also remains a challenge, as companies struggle to keep skilled workers in an increasingly competitive market. These persistent labor shortages mean that complex projects are harder to staff, leading to more variables in workforce planning and greater difficulty ensuring the right people are in place to meet project deadlines.

Demographic Shifts

The construction industry is facing perhaps one of the largest demographic shifts in modern history. First of all, there’s a generational transition, where the percentage of construction workers over 55 has almost doubled in recent years. This is putting strain on the workforce as this older generation begins to think about retirement, further exacerbating the labor shortage.

At the same time, fewer younger people are joining the workforce, which creates dual strains on the construction industry. First, there’s the resourcing required to staff projects. Second, there’s the integration of technology and a tech-savvy workforce into the construction industry. Younger generations are generally more tech-proficient, and with the rapid pace of technological development, it’s important for the construction industry to stay current and leverage these tools to maintain a competitive edge.

Alongside this is the evolving skill sets required to meet these demands. Workers need to acquire new skills in areas like analytics, construction project management software, and even artificial intelligence, which could impact construction project management. There is a big requirement to upskill and cross-skill in the construction industry.

Rising Labor Costs

As the construction industry works to stay competitive with other industries and retain and attract talent, one of the challenges it faces is rising labor costs. Wage inflation benefits workers by providing them with a more substantial income. However, it also adds pressure to project budgets and necessitates rigorous cost monitoring.

Rising labor costs can lead to cost overruns, as the increasing expense of labor makes it harder to stay within budget. This is driving construction organizations to operate more efficiently and effectively while navigating the competitive labor market. The impact of rising labor costs has been particularly noticeable in residential construction, where wage growth has been considerable.

Skills Gaps and Technology Adoption

The construction industry has historically been known as highly hands-on and rooted in traditional brick-and-mortar practices. However, the role of technology in construction, especially in construction project management, is rapidly evolving. The integration of technology into construction processes offers significant opportunities to improve efficiencies, optimize resource management, and ensure projects are completed on time.

Despite these advantages, the industry faces challenges. There’s a noticeable shortage of tech-savvy workers, particularly younger workers who are proficient with modern tools. According to research, only 19% of the construction workforce is under 25, underscoring the generational gap. Additionally, many organizations encounter resistance to change, with some preferring to stick to tried-and-true solutions that have worked for them in the past. However, adapting to new tools is increasingly necessary. For example, transitioning from spreadsheets or paper-based processes to centralized construction project management systems can offer substantial long-term benefits, but it’s a change many organizations are still grappling with.

Emerging technologies, such as robotics, AI-driven tools, and green building techniques, are becoming both critical and scarce skills. While adopting these technologies can dramatically improve project efficiency, navigating this shift remains a key challenge for the construction industry. Nevertheless, the potential benefits create strong incentives to embrace these changes.

Impacts of Labor Trends on Construction Project Management

These labor trends combine to create a necessity for action within the construction industry. One critical area businesses can focus on is construction project management. Effective project management can help address resource allocation challenges. For instance, if you are managing multiple projects with interdependent tasks, it’s vital to schedule the right contractors to meet those dependencies. This ensures there are no delays or disruptions while waiting for contractors or tradespeople to complete their work.

Having contingency plans in place is equally important for minimizing delays and maintaining stakeholder trust. A centralized reporting function can support this by enabling project managers to see the big picture while also zooming in on smaller details that require attention.

Budgeting strategies, when combined with construction project management software, can help track expenses and optimize labor spending. This is particularly critical during times when the costs of materials and labor are increasing, yet project expectations remain unchanged.

Addressing skills gaps is another priority. Project managers must support continuous learning across the workforce. This includes staying current on safety certifications and compliance training, which are essential for meeting regulations. Construction project management software can assist by tracking certification statuses and ensuring that any gaps are addressed proactively. Beyond compliance, upskilling and cross-skilling individuals across the organization are crucial for building a versatile and adaptable workforce.

Leveraging Technology to Address Workforce Challenges

One of the key themes we’re seeing from the labor trends in construction that affect project managers is the need to do more with less. Technology is a viable way to address this. In this section, we’re going to take a look at a few ways that construction project management software can help:

• Enhanced Resource Management
• Predictive Analytics and Scheduling
• Cost Control and Automation
• Upskilling and Training Integration

Enhanced Resource Management

One of the challenges with traditional construction project management methods, such as relying on spreadsheets or paper-and-pen processes, is the lack of a centralized source of truth for workforce data. Instead, you often end up with disparate data sources spread across multiple systems and managed by different individuals within the organization.

Construction project management software, like Bridgit, addresses this by providing a single source of truth for tracking workforce data and enabling collaboration in ways traditional methods cannot. For example, you can pull up a dashboard during a stakeholder meeting to review multiple projects and have meaningful discussions about workforce assignments. This ensures that project dependencies are met, the workforce isn’t overworked, and all projects are appropriately staffed.

A key feature of this type of software is its ability to provide real-time updates. This allows for quick adjustments to staffing as project demands shift. For instance, if there’s a need to bring in a contractor or a skilled trade to address a specific dependency, it can be managed holistically from one central location. This reduces downtime and leads to improved project outcomes.

Predictive Analytics and Scheduling

By using a centralized project management system, you not only create a mechanism for collaboration across your organization without the hassle of sorting through spreadsheets that others might not understand, but you also establish a framework for collecting both historical and real-time data. This data can be leveraged for predictive analytics and scheduling.

For example, you can use these tools to simulate project staffing scenarios, helping you understand the impact of different workforce allocations before finalizing a plan. This allows you to identify the best approach for managing your projects ahead of time and adopt a proactive strategy.

With predictive analytics, you can also take a proactive approach to conflict resolution. This means ensuring there are no overlapping resource assignments and that contractors or skilled laborers are allocated to dependencies appropriately. This minimizes the risk of unexpected delays on-site and ensures smoother project execution.

Cost Control and Automation

Construction project management software should integrate with your financial systems to provide insights into workforce costs and help you better align your staffing with financial constraints. By using a centralized project management system, you can streamline expense management, gain a clear overview of labor expenses, reduce waste, and improve cost control.

Another critical component of this integration is the time spent on administrative tasks for workforce planning. Transitioning to an automated platform saves time, enhances communication and collaboration, and drives overall efficiencies, allowing your team to focus on more strategic aspects of project management.

Upskilling and Training Integration

As we’ve seen with the labor trends, the need for upskilling and training is at an all-time high. Ensuring that your staff have access to the right resources and training allows them to develop new skill sets, ultimately saving time and money. Additionally, compliance and regulatory standards are becoming increasingly stringent, making it critical to adhere to these requirements.

A key part of this is ensuring that certifications for all staff on-site are up-to-date. Construction project management software can help you automatically track certifications to ensure compliance and proactively schedule training before any key certifications expire. Systems like Bridgit integrate with HR platforms to streamline training and certification processes, enabling you to manage them in a centralized and efficient manner.

Bridging Labor Challenges with Innovative Project Management

The construction industry is undergoing a period of rapid shift and change, placing new demands on construction companies striving to manage projects in a cost-efficient and timely manner. However, this new era also brings opportunities.

Technology, such as Bridgit, can be a game-changer. Construction project management software allows you to centralize your workforce data, streamline operations, and make proactive decisions using features like predictive analytics. Moving away from older, traditional methods of construction project management—such as spreadsheets or manual processes—can help future-proof your workforce and position your company for long-term success.

If you’re curious about how construction project management software can benefit your business, get in touch with Bridgit today.