Trends

Building a Better Business: The Role of HR Tech in Construction Operations

Part of a series  |  2025 HR Trends Series

Anthony Maggio

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Recruiting and retaining staff remains a challenge for construction companies, but HR technologies can help. They offer benefits such as streamlining processes, fostering skills development with generative rtificial intelligence (AI) and enhancing the employee experience to boost retention.

Changing workforce conditions have created challenges for construction firms. According to McKinsey data, an aging workforce means increased retirement rates. Paired with new generational priorities — Gen Z and Millenials prefer workplace flexibility to the structured hours of construction work — and a persistent perceived stigma around vocational school training, it's clear that human resource teams need a new approach to recruitment, retention and engagement.

Here are three ways that HR tech is helping construction firms build better businesses.

1) Streamlining key processes

Tools such as generative AI can help HR teams streamline key processes, including recruitment, workforce planning and compliance.

Significant talent shortages remain a problem for construction companies. Between August 2023 and July 2024, the industry had more than 380,000 job openings monthly, with both skilled and unskilled labor in high demand, according to Deloitte. Firms face challenges in recruiting and keeping on-site workers and constantly compete for highly-skilled staff.

As the ADP 2025 HR Trends Guide notes, 63 percent of large businesses say they have now adopted or are piloting GenAI. What sets GenAI apart from its AI predecessors is the ability to create new content and data in response to user queries. For example, teams could ask generative solutions to analyze current company data and predict the most likely labor shortfall over the next six months or one year. Other uses for generative AI include:

• Screening candidate resumes
• Creating and sending interview emails
• Carrying out candidate follow-ups

When it comes to workforce planning, teams might use generative AI to pinpoint hiring priorities over the next year based on current staffing levels, upcoming projects and likely market trends. Finally, intelligent solutions can help companies stay ahead of compliance requirements around wage and hour regulations and pay transparency.

Read: Are Women the Key to Solving Labor Shortages in the Construction Industry?

2) Focusing on skills development

New technology also highlights the need for upskilling and reskilling. Consider AI. As noted by McKinsey, 57 percent of employers plan to close generative AI skills gaps through targeted upskilling. Reskilling, meanwhile, offers a way to help retain talent by providing alternative pathways for advancement. Picture, for instance, an HR professional familiar with legacy tools. Facing the rapid adoption of new technologies, they may consider applying elsewhere or simply retiring rather than feeling left behind.

With the right approach, however, this challenge becomes an opportunity. If firms provide a pathway for reskilling — such as in-house or online classes to help HR staff get up to speed with new technologies — they can reduce the risk of experienced staff churn. As a result, they can keep institutional knowledge without falling behind the curve.

When it comes to upskilling and reskilling, two best practices help streamline the process:

Let staff experiment with Generative AI

Generative AI is unfamiliar to most employees. As a result, they're often reticent to use it for fear of making a mistake. Avoid this issue by letting employees experiment with generative AI safely. Offer a protected, limited-scope environment for them to ask questions, get answers and make mistakes. This reduces the stress associated with AI and helps staff become more confident.

Prioritize social and cognitive skills

According to the McKinsey report, employees identified social-emotional and cognitive as the most important for effectively performing their current roles. It makes sense. While generative AI solutions offer massive potential, they're only as good as the queries asked. Staff who can think creatively go beyond basic queries to help companies discover new trends and uncover hidden connections.

3) Humanizing the employee experience

As noted by the CDC, "The construction industry has considerable safety and health hazards that result in a high rate of injury, illness, and fatality." Beyond physical factors, however, the agency also reports that psychosocial factors play a role in overall health. Construction workers report more lower back, neck and shoulder pain due to low job satisfaction, high perceived job stress and unrealistic expectations.

This trend aligns with broader industry data from the National Alliance on Mental Illness, which found that 52 percent of employees are burned out. The result? Construction firms can benefit from well-being technologies that help humanize the employee experience. This could include new mental health solutions, stress management tools and personalized benefits experiences. For example, instead of offering a standard benefits package to all employees regardless of their role, teams could use next-gen HR solutions to provide benefits that better align with employee needs, such as expanded healthcare or mental health options for front-line staff.

Financial wellness is another significant source of stress. 59 percent of staff say financial concerns cause them the most stress in life, and 35 percent say these issues are a distraction at work. By equipping employees with financial wellness tools that help staff track their spending and manage their money, HR teams can reduce overall stress and keep employees focused.