Bruce Morton
Senior Loss Control Consultant
The U.S. construction industry needed to hire 439,000 net new workers in 2025 just to keep up with projects already planned at the start of the year. By mid-year, nearly 9 in 10 contractors said they were struggling to fill both hourly and salaried positions. The construction workforce retention rate remains high, with an average annual turnover rate of 68.2%. The challenges of attracting and retaining workers have led some firms to turn down work or extend project schedules. Tighter immigration enforcement, wage inflation, and an aging workforce have contributed to the existing gap.
As this shortage poses a risk to business continuity, construction leaders are reconsidering what truly drives employee retention in the construction industry and aiming to maintain a retention rate between 45% and 60%. Competitive pay may help fill positions, but it no longer guarantees loyalty. Firms making progress are those that treat their workforce as a long-term investment by aligning benefits, development, and culture with the same attention they give to managing costs and risks on a project site.
Employee benefits are no longer “extras” but important tools that help sustain a healthy, consistent workforce. Organizations that integrate these programs into their broader risk and growth strategies are more likely to build resilience in a persistently tight labor market.
Three priorities currently stand out for contractors looking to improve staff stability and construction employee retention.
1. Positioning construction as a career
Construction isn’t short on opportunity, but the industry has struggled with perceptions of long hours and limited advancement—seen more as a fallback than a future long-term career. That impression has kept many prospective workers on the sidelines despite steady demand and competitive pay.
This narrative is starting to change, with enrollment in construction and vocational programs up 23% since 2018. Gen Z, in particular, is drawn to careers where they can see tangible impact, use new technology, and contribute to community growth. Focusing on these interests is essential for improving construction workforce retention by attracting and keeping motivated, purpose-driven talent.
To help change perception, contractors can position construction as a modern, purpose-driven career by:
- Embracing digital tools and technology to attract the next generation of workers who value innovation, efficiency, and data-driven decision-making
- Highlighting career pathways through apprenticeships, certifications, and leadership tracks that show how today’s entry-level roles can lead to long-term growth
- Investing in mentorship programs, such as pairing seasoned foremen with newer hires to bridge generational divides and reinforce pride in the profession
- Promoting purpose by emphasizing the lasting impact of the work—the chance to build hospitals, schools, and infrastructure that shape communities
When workers see construction as a profession that values their skills, offers upward mobility, and embraces modern tools, they begin to view it not as a stopgap job, but as a long-term calling—which is important for improving employee retention in the construction industry.
2. Building holistic, multi-generational benefits programs
While pay remains the top factor influencing job choice, employees also seek advancement opportunities, flexible schedules, mental health support, retirement plans, and meaningful health coverage. These preferences span age groups, with four generations now represented in the workforce, and the one-size-fits-all approach to benefits no longer works. The most competitive contractors are designing programs that address distinct employee needs while supporting shared goals of health, financial stability, and work-life balance.
Baby Boomers may prioritize retirement readiness and long-term security, while Millennials and Gen Z often value flexibility, digital access, and mental health resources as much as compensation. The key is not to choose between them but to design a program that speaks to all.
A well-rounded strategy might include:
- Comprehensive health coverage that goes beyond medical insurance to include behavioral health, telehealth, and wellness incentives.
- Financial wellness and retirement programs such as automatic 401(k) enrollment, fiduciary oversight, and financial education.
- Flexible scheduling and job-rotation programs to reduce fatigue and support work-life balance.
- Transparent communication that makes benefits easier to understand and access.
Contractors that treat benefits as part of their broader risk and construction employee retention strategy often see measurable returns, including lower turnover, higher engagement, and a healthier, more reliable workforce.
3. Prioritizing wellness as a core safety issue
Construction is among the professions with the highest rates of suicide, six times higher than workplace fatalities, highlighting that an organization’s well-being strategy is as inmportant to employee safety as hard hats and harnesses. The pressure of deadlines, physical strain, and irregular hours takes a toll on workers, and employers should recognize that well-being needs to be built into the foundation of their safety culture. It also takes the average worker 11 years to get help.
This integration can look like:
- Establishing safety and well-being huddles that encourage open conversations about stress and fatigue.
- Training supervisors to recognize early signs of burnout or distress. Traning such as QPR – Question Persuade Refer or Mental Health First Aid.
- Expanding Employee Assistance Programs (EAPs) and promoting virtual counseling to make support accessible across dispersed job sites.
When mental health is incorporated into safety planning, organizations strengthen both their culture and their risk posture. Workers who feel supported are more focused, more engaged, and more likely to stay—which helps improve overall employee retention in the construction industry.
Building resilience through people
The firms that will thrive in the coming years are those that see workforce strategy as part of their overall business strategy. Competitive pay attracts workers; purpose, support, and culture help retain them. By investing in career development, comprehensive benefits, and well-being, contractors can strengthen construction employee retention, reduce risk, and better position themselves to deliver on tomorrow’s projects.
To explore how workforce strategy fits within broader construction risk management, download our Construction Risks Report. The report provides a deeper look at the top risks shaping the industry—from labor and backlog management to burnout and environmental exposure—and highlights how data-driven solutions and people-first strategies are helping firms prepare for the future.
