Construction problems are all too common throughout a project’s life cycle. Project managers tasked with ensuring projects remain on schedule, within budget, compliant with safety regulations, and running smoothly know that it can be difficult with the amount of potential and unanticipated issues that tend to crop up. Here are some of the top challenges and problems in the construction industry.

Challenge Name	Problem	Solution
Cost Overrun	Exceeds budget due to poor estimates, design changes, and payment delays.	Improve planning, manage changes, ensure timely payments.
Delays	Projects often face delays from uncontrollable factors and management issues.	Leverage technology for scheduling and data accuracy.
Slow Adaptation to Emerging Technologies	Hesitance towards new tech adoption limits efficiency improvements.	Invest in new technologies for management and communication improvements.
Inadequate Communication	Communication gaps lead to unrealistic expectations and missed tasks.	Use clear guidelines and technology for better communication.
Labor Shortage	Skill gaps and a declining workforce challenge the industry.	Invest in tech and partnerships with schools for apprenticeships.
Poor Planning, Forecasting, and Budgeting	Goals unmet due to improper planning, forecasting, and budget issues.	Set realistic goals, communicate effectively, and plan finances carefully.
Lacking Organization and Haphazard Document Management	Manual documentation prone to errors.	Shift to digital, paperless document management.
Problems with Cash Flow	Payment delays disrupt the ability to pay for labor and materials.	Implement modern payment systems and manage finances efficiently.

1.   Cost overrun

Cost overruns are a significant issue in the construction industry. Projects can be mired by factors like inaccurate cost estimates, design changes, and poor project management. In a recent study by QBE, 35% of industry professionals identified cost overruns as a top risk ranking it among high interest rates, owner contract disputes, and inflation.

The planning phase of a construction project is critical. Ensuring accurate cost estimates and forecasting workforce requirements to complete a project are key to managing costs. According to a McKinsey study, nearly 98% of large construction projects deal with a cost overrun of more than 35%. This challenge represents an opportunity: driving efficiency can make your organization more competitive and profitable.

2.   Delays

Along with cost overruns, delayed projects are endemic in the construction industry. Delays can be caused by a number of factors – some of which are within your control and some are due to external factors. Issues such as poor communication, planning, and resourcing can be managed and improved through the use of efficient project management and workforce planning.

Other issues, such as regulatory challenges, can grind a productive project to halt while you await requisite permits and approvals. For example, California’s high-speed rail project has faced a series of significant delays due to permitting challenges and utility relocation issues. Delays not only impact your profitability but also your public reputation; significant delays should be avoided and mitigated as much as possible.

Even the most diligent and conscientious project manager is prone to human error. One of the best ways to mitigate risk is to reduce the need for manual management through the use of technology, but the industry’s willingness to adapt can be a problem as well.

3.   Slow adaptation to emerging technologies

While emerging hardware and software technologies are not a panacea, they offer the industry an opportunity to improve efficiency, communication, and forecasting. The construction industry may have a reputation as being slow or hesitant to adopt new technologies, it’s clear that the trend is changing and contractors are beginning to adopt technology at an increasing pace, particularly when it comes to digitization. 

Software like Bridgit allows construction firms to counteract some of the core problems facing the industry. Liabilities such as disorganized workforce management, insufficient scheduling, and poor communication are challenges that have technological solutions. Workforce planning, as an example, is a process that can be moved from whiteboards and Excel sheets to applications that allows staff to coordinate across job sites. 

4.   Inadequate communication

One of the more everyday construction issues is inadequate communication. A 2025 study of Canadian construction projects analyzed the impact of communication on projects, such as rebuilding Fort McMurray after the 2016 wildfires. We shouldn’t downplay the importance of this simple challenge: effective communication is an advantage in the successful completion of construction projects.

Projects require a number of professionals through its life-cycle. From the planning stages to managing contractors on the job, effective communication is table stakes for a successful project.

Oftentimes, there’s a disconnect between the office and on-site workers. Communication inefficiencies are linked to a high percentage of construction problems, with inadequacies resulting in complications such as unrealistic expectations (due to planners not being on the field and being unaware of how long a task may take) and important tasks being overlooked (with teams remaining uninformed about issues until it’s too late).

Project managers will need to establish clear guidelines and can keep everyone in the loop by summarizing any obstacles and progress made at the end of each day. Documenting all communication also helps in cases where conflicts arise.

Here’s a look at all the communication options built into Bridgit Bench to help keep your team up to date.

5.   Labor shortage

The construction industry has been plagued by a persistent labor shortage, with media outlets reporting that the industry needs to find an additional 500,000 workers or face a shortfall of essential labor to complete projects. This is clearly a big challenge for construction companies looking to staff projects and deliver projects without serious delays. 

The labor shortage is not the result of any single trend, instead a combination of factors. For example, there is a demographic shift at play with less young people choosing to enter the construction industry resulting in an aging workforce. According to research, only 19% of the construction industry is under the age of 25. In addition, current events seem set to deepen the challenge with tariffs and deportations in the United States impacting the labor market. 

In order to rise to this challenge, construction firms must do two things. First, they need to be more efficient and effective with their existing workforce. This means prioritizing employee retention while also tightening up forecasting processes to ensure job sites are adequately staffed. Second, focusing on recruiting younger generations to join the workforce by developing partnerships with post-secondary institutions and employer branding efforts.

Strategies to Counteract Labor Shortage

Investing in New Technologies: By adopting advanced technologies, the construction industry can improve efficiency and make the sector more attractive to younger workers who are typically more tech-savvy. Technologies such as Building Information Modeling (BIM), drones, and automated machinery can enhance productivity and appeal to a younger demographic.

Educational Partnerships and Apprenticeship Programs: Collaborating with educational institutions to offer apprenticeship programs can help bridge the skills gap. These programs provide hands-on experience and training for students, preparing them for careers in construction. Promoting the industry as a viable and rewarding career path can also help attract new talent.

Additional Insights and References

McKinsey & Company has published various reports detailing the productivity challenges and opportunities in the construction industry, including the critical role of labor shortages. You can explore more in their report: The Construction Productivity Imperative.

Associated Builders and Contractors provides regular updates and analysis on workforce trends in the construction industry. More detailed information can be found on their website: Associated Builders and Contractors.

6.   Poor planning, forecasting, and budgeting

Proper planning and forecasting is essential to delivering projects on-time and on-budget. Unfortunately, the IDC found 77% of projects were late with an average delay of 77 days. Similarly, budget overruns were common – with 9 out of 10 projects experiencing overruns with an average budget overrun of 28%.

In an industry already operating on razor thin profit margins, these types of delays and budget overruns are a significant financial burden. Simply put, construction firms can’t afford these types of inefficiencies that result from poor planning and budgeting. 

Forecasting needs to balance a focus on long-term and short-term requirements. By focusing too much on the long-term, firms risk missing critical day-to-day operational needs. For example, planning for site inspections from regulatory agencies and having the right staff at the site to assist them. These little issues add up to a bigger problem. 

7.   Lacking organization and haphazard document management

Construction projects involve dealing with a lot of documentation, from project plans and materials orders to receipts for insurance certification and regulatory documentation. Manual document management falls short of modern requirements. Projects get delayed by issues like version control, accessibility, and lack of collaboration. 

The paper system, once the bread-and-butter of the industry, is giving rise to digitization and paperless records. This pain point is nowhere more evident than in construction workforce planning. Assigning staff to job sites, particularly when you’re juggling labor shortages and projects across multiple locations, can be a major burden.

Having a centralized project staffing hub – discarding pen-and-paper for software – allows you to communicate in real-time and across job sites. It also provides a meaningful platform to use as a basecamp for strategic discussions about labor allocation. 

8.   Problems with cash flow

Uncertainty is the death knell of stability. Current economic conditions, such as the ongoing tariff and trade disputes, introduce a new variable into an industry already struggling to maintain profit margins. Cash flow is a major challenge in the construction industry – positive cash flow means having the funds to pay employees, subcontractors, vendors, and suppliers on time. Late payment disrupts cash flow and can incur additional interest charges, even halting project progress and causing major delays.

Construction firms are preparing for economic uncertainty by relying more on business savings, credit lines, and credit cards to keep operations running and avoiding payment delays. At the same time, firms are replacing outdated invoicing systems with modern solutions that ensure fast payment and receipt of payments.

Bridgit, a modern workforce management solution

Bridgit is a cloud-based system that allows you to modernize your workforce management process.

Make resource and labor management more efficient and meet your workforce needs with our robust allocation dashboard that gives you immediate access to daily allocations, plus the resource statuses of current and future projects.

Bridgit also improves communication with notifications that keep your teams up to date through automated email messaging, and custom construction management reports to keep everyone on the same page during meetings.

Improve organization with centralized labor data and consolidate your project and field operations in one place. All project and field labor force information will be in one easy-to-use solution.

Circumvent the top construction challenges that the industry deals with by choosing Bridgit Bench today!

Construction Challenges FAQ

How can construction firms evaluate the impact of technology on costs and project efficiency?

Adopting new technologies isn’t an automatic process where cost savings and project efficiency are self-evident. It takes a bit of effort to determine if the technology you are using impact the bottom-line. The ideal is to have a set of key performance indicators (KPIs) that you are already monitoring such as project completion times, budget adherences, and the number of safety incidents. Then, you can compare the before and after to see if the new tech is having an impact. 

If you don’t have access to historical data, then setting those metrics up now would be a wise investment. You can also rely on qualitative feedback from project managers, contractors, and superintendents to gauge the impact. Highly impactful technology may be noticeable in cost savings, but most technology is harder to evaluate and requires a nuanced reporting approach.

What strategies work for attracting the younger generation to the construction industry?

This is an increasingly important challenge in a market seeing more labor shortages. Construction firms need to modernize their approach to recruitment and use social media to highlight the benefits of a career in construction. Younger generations are technologically savvy by default; appealing to them by highlighting the innovations in the construction industry may be a valid strategy. As well, partnerships with educational institutions to offer exposure to career options in construction and opportunities for hands-on training could be valuable.

Can Bridgit Bench integrate with other project management and financial software used in the construction industry?

Yes, Bridgit Bench is designed to seamlessly integrate with a wide range of project management and financial software solutions commonly used in the construction industry. This flexibility ensures that firms can maintain their existing workflows and data ecosystems, enhancing rather than disrupting their operations. The platform’s open API facilitates easy connections, making it possible to synchronize data across systems for comprehensive project oversight and more efficient resource management.

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