Construction Labor Shortage? How Tech Helps Contractors Adapt

Headlines about labor shortages in the construction industry are nothing new—for years, contractors have known that there was plenty of work but never enough workers. Even so, the construction labor shortage seems to have taken on a new acuity. According to Newforma’s 2025 AECO Project and Information Management Survey, 41% of firms in the AECO (architecture, engineering, construction and operations) industry say that labor shortages have caused project delays; 40% say that labor shortages have placed pressure on their existing staff.

These numbers are sobering—and sadly, they only hint at the real issues confronting the construction industry. Even in a tough labor market, however, smart firms are finding ways to adapt—specifically by embracing technology.

Understanding the full scope of the construction labor shortage

One reason why these statistics only begin to describe the plight of contractors is that they fail to capture “silent losses” that many firms are dealing with. Due to concerns over missing deadlines or burning out their teams, contractors are turning down projects, or else simply declining to bid on new work in the first place—sacrificing invaluable opportunities for business growth.

Contractors are choosing to delay growth, ceding market share to their competitors, due to a number of perceived risks. According to Newforma’s primary research, three of the most significant risks include:

• Burnout and turnover. When firms take on more work than their teams can handle, it results in burnout, higher levels of stress, and potentially an exodus of top talents—exacerbating the existing problems with labor shortfalls.
• Loss of corporate knowledge. As experienced team members move on, the knowledge they carry often leaves with them. If project information isn’t centralized and easy to access, onboarding new hires can become a slog—and all the while, project quality declines as mistakes multiply.
• Shrinking talent pipeline. With the construction workforce aging, and fewer young professionals entering the field, the loss of expertise is a real concern. Simply put, it’s getting harder and harder for contractors to find qualified employees.

Adapting to the new labor environment

While construction firms are right to be wary of these risks, there are ways in which smart firms can adapt and even thrive—particularly through the use of advanced technology.

According to Newforma’s research, 38% of firms are leveraging technology to fill the gap left by labor shortages. Project and information management solutions can automate routine tasks, streamline communication, and make it possible for firms to complete more projects, without the need to bring on new employees.

The same technologies can help to centralize knowledge—mitigating that risk of knowledge loss as top talents head for greener pastures. Firms using centralized platforms to document decisions and best practices are better equipped to onboard new hires and retain institutional expertise.

There’s also something to be said for selective growth. By focusing on high-value projects where they can deliver quality without overextending their teams, firms can safeguard their employees and protect their reputations.

Finally, smart firms are investing in training, mentorship and career development—all with the goal of keeping their standout employees engaged. They’re also creating “tech champions” to help other employees get up to speed with the latest tools and software solutions, ensuring buy-in across the team.

Taking a smart approach to labor shortages

Labor shortages aren’t merely an HR problem. They affect construction firms in every part of their business, impeding business growth and imperiling employee morale. Leveraging technology is one smart way for firms to weather these challenges—ultimately saying yes to more opportunities. Victoria Salvador is Senior Director of Marketing at Newforma, the leader in Information Management software for architects, engineers, contractors, and owners (AECO) worldwide.

By Victoria Salvador