Construction Labor Shortage: Technology Bridges the Gap

The construction industry is facing a historic labor shortage. More than 400,000 jobs are unfilled today. By 2026, that number could reach 500,000. The effects of these vacancies ripple across housing, infrastructure, and commercial projects—slowing timelines, increasing costs, and putting pressure on already tight margins.

The reality is sobering. You can’t control these macroeconomic forces, but you can control how you choose to adapt. Figuring out ways to enable and empower your existing (and future) workforce is essential in a labor-short market. Smarter, faster workflows are crucial to keeping projects on track and your business competitive.

The Scope of the Construction Labor Shortage

Several factors are converging to create a labor crisis that is unlike anything the industry has seen in decades:

• Retirement wave: Nearly 40% of today’s construction workforce will retire by 2031. And they aren’t being replaced! For every four workers leaving, only one new worker enters the industry.
• Immigration and workforce vulnerabilities: Around 40% of construction workers are immigrants, and 23% are undocumented, making the workforce especially sensitive to tightening policies.
• Widespread impact: According to the Associated General Contractors, 45% of firms have experienced project delays tied directly to labor shortages.
• Productivity gap: Over the last 50 years, construction productivity has increased by 0%, compared with a roughly 300% increase in manufacturing and a nearly 1000% increase in the technology industry.

Combine these lagging trends with rising material costs, tariffs, and inflation—and the implications become clear:

• Projects take longer to complete, delaying revenue streams.
• Costs rise as labor becomes scarcer and more expensive.
• Teams are stretched thin, increasing the risk of errors and safety incidents.

Construction firms are responding in one of two ways: Either tackling the issue head-on or shying away from the issue. History shows that necessity should drive advancement, not stagnation. Today’s labor challenges are not a reason to pause—they are a reason to innovate! Companies that embrace technology and modern workflows are already positioning themselves to win in this new environment.

Meeting the Construction Labor Shortage Head-On

While there’s no single fix for a workforce shortage of this magnitude, several strategies can help construction companies bridge the gap and maintain productivity.

1. Augment Human Labor with AI and Automation

Tools like AI-powered construction software allow teams to accelerate processes. Instead of manual entry, teams can automate repetitive tasks, thus alleviating their capacity to tackle other tasks.

Benefits of AI and automation include:

• Quicker office work
• Reduced errors, especially in preconstruction
• Ability to handle more projects without adding staff

2. Cloud-Based Real-Time Collaboration

With cloud-based systems, teams in the office and on-site can work on the same project simultaneously. Version control and live updates significantly reduce miscommunications and rework, while enabling remote supervision and faster decision-making.

Benefits of cloud-based tools include:

• Streamlined communication across multiple sites
• Smoother collaboration between contractors and subcontractors
• Reduced delays caused by lost information
• Greater transparency and accountability

3. Robotics, Drones, and On-Site Tech

Automating repetitive or dangerous tasks on the jobsite helps extend the reach of a limited workforce. Drones can monitor progress and capture site data, while robotics can assist with lifting, layout, or measurements.

Benefits of on-site technology include:

• Improved safety and reduced strain on human labor
• More precise and consistent project execution
• Freed-up workers can focus on high-value tasks
• Better oversight of on-site happenings by leadership

4. Upskilling and Empowering Existing Workers

Providing training and modern tools ensures your current workforce is more productive and efficient. The goal isn’t replacing people—it’s augmenting them to work smarter.

Benefits of upskilling your workforce include:

• Retention of experienced staff
• Reduced onboarding time for new hires
• Increased overall team efficiency

By combining these strategies, companies can offset the workforce gap and maintain competitiveness—even in a tight labor market.

How Togal.AI Empowers Construction Estimators to Adapt

Among the tools helping companies bridge labor gaps is Togal.AI, an AI-backed takeoff software that empowers construction teams to work faster, more accurately, and bid more projects without increasing headcount.

Key features of our estimation software include:

• Automated takeoffs: Our AI detects, measures, and labels elements from drawings in seconds.
• Real-time, cloud-based collaboration: Teams can work on the same plans simultaneously from any internet-connected device.
• High accuracy: Precision reduces costly errors.

Our estimation tool amplifies estimators’ abilities, letting preconstruction teams tackle more projects, reduce errors, and focus on strategy rather than repetitive tasks. It’s a practical example of how modern technology can help construction companies thrive despite labor shortages.

And we’re having a real-world impact for construction companies large and small.

For example, Coastal Construction saved ~$1 million in their first year, collaborated seamlessly with 400+ employees and subcontractors, and increased its bid rate to 10 projects per month by adopting Togal.AI.

What about smaller construction companies? Well, NC Painting increased their bid rate 215% in under 60 days, going from 19 bids per month to an average of 60, all while using a smaller, leaner team.

It just goes to show that technology and innovation can help construction companies of any size.

Take Control of Productivity

Construction labor shortages won’t be solved overnight. But construction companies that embrace innovation, adopt modern tools, and empower their teams can turn challenges into competitive advantages.

The companies leaning into AI and smart technology are already scaling fast. Productivity, efficiency, and speed are within your control—even if labor supply is not.

Ready to empower your team? Book a custom demo of Togal.AI today and discover how your team can work smarter, faster, and more efficiently.