Qualified-worker shortages and early turnover keep hiring needs high despite uneven construction demand
More construction firms cut headcount than expanded it during the past year for the first time since the pandemic, yet contractors still face widespread shortages of qualified workers and overwhelmingly expect to add workers, according to a new workforce survey released Sept. 3.
The Associated General Contractors of America and the National Center for Construction Education and Research found 37% of respondents reduced headcount by at least 5% during the past 12 months, compared with 34% that increased it by at least 5%.
But 73% expect to add employees over the coming year and only 8% expect further reductions.
“While some firms are adjusting to weaker demand, many contractors continue to compete for a limited supply of qualified workers,” AGC Chief Economist Ken Simonson said during a media briefing announcing the results.
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AGC-NCCER
2026 Workforce Survey Summary
The survey, conducted in July and August, drew responses from 1,830 people representing firms of varying sizes and market sectors. About 87% reported openings for hourly craft workers and 82% for salaried positions. Nearly nine in 10 firms with openings said those jobs are as hard or harder to fill than a year ago.
Half of respondents said available candidates lack needed skills, certificates or licenses. Electricians were the most difficult craft workers to find, cited by 81% of firms seeking them, while 75% of firms seeking superintendents reported difficulty filling those jobs. Project managers and supervisors followed at 74%.
Keeping New Workers
The problem increasingly extends beyond recruitment. Eighty-three percent of firms reported at least some turnover among new field employees during their first 90 days. A mismatch between workers’ expectations and construction realities was the most frequently cited reason for early departures, followed by physical demands and travel or scheduling requirements.
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“We still can’t find enough, so we better figure out how to keep what we get,” said Boyd Worsham, president and CEO of NCCER.
ACE Electric is facing that problem as it rapidly expands. Human Resources Director Mindy Bates said the Valdosta, Ga.-based electrical contractor has netted more than 500 employees this year—but had to hire about 700 because of turnover.
A mismatch between expectations and job reality is contractors’ leading explanation for why new field employees leave within their first 90 days. Click on chart to enlarge.
Graph courtesy of AGC/NCCER
ACE now brings new employees to Valdosta for a weeklong orientation covering safety, company culture, benefits and career paths instead of sending traveling hires directly to their first project. Bates said that change, better labor planning and expanded workforce development—including in-house programs for field crew managers, superintendents, project managers and estimators—have helped reduce turnover by more than 40 points over two years.
“You cannot hire your way out of this situation,” Bates said. “We’ve got to grow it from within as well.”
ACE also gives new hires written and hands-on skill assessments. When a worker’s abilities fall below the level claimed during recruitment, the company may offer a lower classification and wage rather than send the employee home.
“You have had somebody who has done everything he could to lie to you just to get here because he can’t wait to work,” she recalled telling colleagues. “Let’s figure out something else.”
Bates said 83% of workers who are offered a lower classification during the past year accepted it, although she said ACE has not yet analyzed subsequent turnover among that group.
Holder Construction Senior Manager Aja Gower said contractors ultimately have to convert today’s entry-level recruits into the experienced workers the industry lacks.
“We’re hopefully solving that problem five years from now because the people entering these programs today are going to be our [field crew leaders] in five years,” she said of Holder’s workforce programs.
Shortages Hit Projects
Labor shortages delayed projects for 42% of respondents, making workforce gaps among contractors or subcontractors the most frequently cited cause of delay. Only 26% reported no significant project delays.
Data-center construction is intensifying the competition in some markets. About 28% of respondents performed data-center work during the past year. Among firms reporting workforce effects from those projects, 58% cited greater competition for skilled workers, 49% increased wage pressure and 36% greater difficulty filling openings.
ACE, which expanded into the Columbus, Ohio, market amid growing data-center work, has reached a point where labor availability affects which projects it can pursue.
“We do have to turn down work,” Bates said. “The majority of the time that we’re having to turn things down, it is for the leadership it takes to run those jobs, especially the big hyperscale ones.”
Immigration enforcement is creating another uneven constraint. Twenty-nine percent of firms reported at least one direct or indirect effect during the previous six months, ranging from 42% in the South and 37% in the Northeast to 22% in the West and 17% in the Midwest.
Simonson cautioned that the survey does not establish that enforcement itself caused project delays. Evidence of that connection remains anecdotal, he said, and larger nonresidential projects may have some ability to re-sequence work if a particular trade is affected. But mission-critical projects offer less room to maneuver: “You can’t afford to lose even a day of work.”
