The engineering and construction (E&C) sector, like many industrial trades, is facing continued growth. However, an unprecedented labor shortage is leaving a record number of construction jobs unfilled. Failure to address the E&C talent challenges could stall industry growth and innovation.
Proactive talent management can help E&C companies remain competitive and capable of meeting future demands. By investing in and engaging their existing workforce, while also implementing ecosystem-based strategies to diversify and expand their talent pipelines, the industry will be better positioned for a resilient future, according to Deloitte’s study, “Building the Engineering and Construction Workforce.”
The E & C Workforce Is Growing
The construction workforce employment level crossed 8 million in 2024, surpassing its previous peak of 7.7 million in 2006, according to Deloitte’s analysis of U.S. Bureau of Labor Statistics data (2024). This growth momentum is expected to continue over the next few years. The U.S. Bureau of Labor Statistics projects an average of 188,000 annual job openings in architecture and engineering occupations from 2022 to 2032, as noted by Deloitte. An analysis of this projection by Deloitte reveals the greatest growth in roles such as construction trades; laborers; electricians; and installation, maintenance and repair workers during this period.
Furthermore, the skill requirements of the E&C workforce are evolving as new technologies, customer expectations and project complexities demand a combination of digital, technical, management and soft skills. This makes it important for E&C firms to understand the drivers of today’s talent challenges, along with changes in jobs due to technology and automation.
The Industry Is Facing a Heightened Talent Challenge as Skill Requirements Continue to Evolve
While job gains are a positive indication of industry growth, they also point to heightened challenges in meeting talent needs with the right skills to fill open positions, especially when the number of open jobs exceeds the number of people looking for work, according to Deloitte’s analysis of U.S. Bureau of Labor Statistics data. A large portion of E&C jobs remain highly skilled, requiring industry know-how and expertise. For instance, per Deloitte analysis of Lightcast data, the demand for skills in metal fabrication has increased by more than 40% since 2019 (increased labor demand for infrastructure projects likely drove the surge).
Additionally, evolving skills requirements are further complicating the search for qualified talent. In fact, 44% of the current skill requirements in infrastructure are likely to evolve over the next five years, according to the World Economic Forum. Further, construction firms are increasingly seeking more applicants with digital skills; Deloitte’s study on the E&C workforce indicates a 15% increase in demand for cloud computing skills and a 13% increase in demand for software development skills from 2019 to 2023.
People management and business management skills have shown growth of 77% and 41% since 2019. Deloitte also found an increase in the requirements for supplier management skills (20%) and social skills (11%), as shown in Figure 1.
Companies Are Taking an Active Approach to Developing Talent & Influencing a Positive Employment Future
Deloitte’s analysis identified some strategic approaches — encompassing the entire life cycle of talent management — that executives can consider developing an agile workforce for tomorrow.
Invest in the Existing Workforce While Diversifying the Potential Talent Pool
Deloitte’s study finds that construction employers are offering competitive pay and other benefits. While higher pay and signing bonuses can help attract talent, firms may put their attention in areas beyond wages.
For instance, they may place increased attention on broader aspects of the worker experience such as career development. Upskilling the existing workforce through training and formal apprenticeship programs may be useful in filling open skilled jobs. Experiential learning programs can assist executives in developing new business skills among their employees. Cross-skilling is another way to develop an employee’s skill set and provide them with new growth opportunities through internal mobility. Job rotation and cross-training initiatives can also expose employees to different roles and functions within the organization.
Companies can also broaden their talent horizon by promoting diversity in their hiring plan. Targeting candidates from different backgrounds, experiences and perspectives can help enrich the talent pool. Enhancing the participation of women and underrepresented groups in the workforce may alleviate some workforce shortages.
Driving Cultural Change Within Organizations to Help Meet the Evolving Needs of the Workforce
By the end of 2024, the number of Generation Z employees in the workforce was expected to overtake that of baby boomers, according to Glassdoor. Promoting flexibility and employee well-being as well as having open and transparent communication channels can help keep younger employees engaged and motivated. Implementing well-being programs that focus on health, stress management and overall wellness can aid in retaining employees. Efficient stress management strategies and employee assistance programs can not only ensure the physical and mental well-being of construction workers, but also boost worker productivity.
Changing skill requirements have prompted some companies to become role-agnostic. Companies may employ a skills-based approach that focuses on employees’ abilities and competencies rather than their job titles or formal qualifications, helping to better align workers with work that fits their skills and capabilities. Creating cross-functional teams can bring together individuals with diverse skill sets and backgrounds to work collaboratively on projects or initiatives.
Integrating Technologies & an Ecosystem Approach to Augment Workforce Capabilities
Companies continue to increase their reliance on technologies, especially project and resource management tools, to enhance and integrate new capabilities. Automation technologies such as robotic process automation and artificial intelligence (AI) can help streamline repetitive tasks, empower employees to focus on value-added tasks and help with risky tasks, removing them from unsafe work environments. This technological integration may help assist in delaying retirement as well as in enhancing health and safety measures in the workplace, potentially improving workforce retention. E&C firms can partner with technology service providers or incubators to automate processes, enhance training programs and improve workforce productivity through digital tools and platforms.
Deloitte’s study highlights that a talent ecosystem approach can assist in overcoming prevailing talent challenges while managing future expectations, thereby bringing synergies for holistic workforce development. For instance, E&C companies are currently engaging with educational institutions and government workforce agencies or unemployment agencies to build their ecosystem for career-building programs.
Implementing a Proactive Approach to Developing a Sustainable Workforce
Organizations may implement active talent management to help them thrive in today’s dynamic and competitive business environment. Talent management is not just about recruiting and retaining employees; it is also about investing in the future of the organization by building a workforce that is agile, adaptable and ready to meet the challenges of tomorrow.
Addressing the talent challenges in the E&C sector requires a multifaceted approach. By investing in workforce development, driving cultural change and integrating advanced technologies, companies can build a resilient and agile workforce ready to meet future demands.
Editor’s Note: The original version of this article was published by Deloitte.
