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Hard Hat Chat is your backstage pass to the gritty and sometimes mind-blowing world of construction. Hosted by Justin Smith, CEO at Contractor Plus, and Gerritt Bake, CEO at American Contractor Network, this show is all about keeping it real—no corporate fluff, no sugarcoating. Tune in each week for straight talk on growing a contracting business, avoiding industry pitfalls, and sharing the occasional “holy sh*t, did that really happen?” job site story. Whether you’re a seasoned pro or just getting your boots dirty, you’ll pick up hard-earned insights and a few good laughs along the way. Join us, throw on your hard hat, and let’s build something awesome.
Welcome to the first episode of Hard Hat Chat. I'm Justin Smith, the CEO at Contractor Plus, and joining me is my partner in construction commentary, Garrett Baek, the CEO at American Contractor Network.
Gerritt:Hey, everyone. You know, Justin, I was looking at some pretty wild numbers this morning about our industry's future, and I've got to say they're a bit concerning.
Justin:Let me guess. You're talking about that new ABC report about the worker shortage coming our way in 2025?
Gerritt:Bingo. We're looking at a need for nearly 440,000 new workers next year alone. That's not just a shortage. That's practically a crisis in the making.
Justin:Well, folks, that's exactly what we're diving into today. The massive worker shortage that's looming over construction, what it means for all of us, and why you might want to start being extra nice to your crews right about now.
Gerritt:And trust me, you're going to want to stick around for this one. We're talking about numbers that could change the face of construction as we know it.
Justin:So let's break down these numbers because they're pretty eye opening. ABC's model is showing we need 439,000 new workers in 2025 just to keep up with demand.
Gerritt:And get this, that's actually lower than what we needed in 2024 when we were looking at a gap of about 501,000 workers.
Justin:Really? That's interesting. Why the decrease?
Gerritt:Well, according to ABC's chief economist, Anirban Basu, it's mainly because construction spending is at its slowest pace in years. But don't get too excited. He actually thinks these numbers might be conservative.
Justin:You know how these forecasts go? They've underestimated growth for the past 3 years running. It's like trying to predict the weather in Chicago. You're probably going to be wrong.
Gerritt:And here's something fascinating about how they came up with these numbers. ABC's model shows that for every $1,000,000,000 in additional construction spending, we need about 3,500 new workers.
Justin:That's wild when you think about it. And they're not just pulling these numbers out of thin air. They're using data from the Census Bureau and Bureau of Labor Statistics, looking at everything from job openings to retirement projections.
Gerritt:And speaking of retirement, that's a huge factor here. We're seeing rising labor costs across the board. Earnings are up 4.4% over the past year, which is way above the average across other industries.
Justin:Yeah. And if we can't fill these positions, it's gonna create this nasty cycle where labor costs go even higher, which makes construction more expensive, which means fewer projects get built, you can see where this is going.
Gerritt:And looking ahead to 2026, they're projecting we'll need even more workers, around 499,000. That's assuming interest rates come down and construction spending picks up.
Justin:You know what really caught my eye in these reports? For the first time since 2011, the median age of construction workers has dropped below 42.
Gerritt:That's a pretty significant shift. We're seeing a lot more young blood coming into the industry, which is great news on one hand. It means we're finally attracting younger
Justin:workers. Yeah. But there's always a catch. Right? While we're getting more young people in, we're dealing with what I like to call the experience gap.
Gerritt:Exactly. Having a younger workforce means fewer retirements to worry about, which is partly why our worker shortage numbers are dropping. But it also means we've got a lot of relatively inexperienced people on job sites.
Justin:It's kind of a double edged sword. Like, great, we're getting the bodies we need, but most of these new hires are coming in at the lower skilled end of the spectrum.
Gerritt:You know what this reminds me of? It's like when I tried to teach my teenager to cook. Sure, they can make a sandwich, but I wouldn't trust them with a 5 course meal just yet.
Justin:That's actually a perfect analogy. We're getting plenty of people who can handle the basics, but we're still short on those experienced workers who can tackle the more complex aspects of construction.
Gerritt:And in an industry where mistakes can be costly or even dangerous, that's something we really need to think about. It's not just about filling positions, it's about making sure we're developing these new workers into skilled professionals.
Justin:Which brings us to the $1,000,000 question. How do we speed up that learning curve without compromising safety and quality? Speaking of workforce challenges, we need to talk about the elephant in the room, immigration policy and its impact on construction labor.
Gerritt:Oh, boy. Here we go. You know, ABC's report actually had some interesting things to say about this. They noted that immigration has been a bigger help than expected in recent years.
Justin:Yeah. The faster than expected immigration rates have actually been helping to shore up our labor supply, but that might be changing soon.
Gerritt:Right. And this is where things get complicated. The current administration's stance on immigration could really shake things up for the construction industry.
Justin:ABC's chief economist was pretty clear about this. Any policy changes that restrict immigration are likely to make our worker shortage even worse.
Gerritt:And let's be honest here. Construction has historically relied pretty heavily on immigrant labor. When you're already short 439,000 workers, further limiting that labor pool isn't exactly helpful.
Justin:I saw that ABC's CEO, Mike Bellaman, is pushing for what he calls a merit based, market based visa system.
Gerritt:That's crazy. What exactly does that mean?
Justin:Basically, they wanna work with the federal government to create a system that allows people who wanna work legally in construction to do so. You know, match the workers with the actual needs of the industry.
Gerritt:But with all the political back and forth right now, do you really think we'll see any meaningful changes on that front?
Justin:It's hard to say, but that uncertainty is exactly what makes planning so difficult for construction companies. How do you project staffing needs when you don't know what the labor pool is going to look like in 6 months? You know what? Let's shift gears and talk about some actual growth numbers because despite all these challenges, the market is still expanding.
Gerritt:Oh, yeah. I saw that Technavio report. They're projecting the residential construction market to grow by $242,900,000 between 2025 and 2029.
Justin:That's right. And they're forecasting a pretty healthy 4.5% compound annual growth rate. Not bad at all.
Gerritt:You know what's interesting about this growth? It's not just about building more of the same stuff. The whole landscape is changing.
Justin:How so? Well, for
Gerritt:one thing, there's this huge shift towards sustainability in residential construction. We're seeing a lot more demand for energy efficient homes, solar panels, that kind of thing.
Justin:And don't forget about the apartment and condo market. That segment is really taking off, especially in urban areas.
Gerritt:Yeah. Developers are getting creative too. I mean, look at these mixed use developments popping up everywhere. They're building these communities with both residential and commercial spaces.
Justin:But here's the $1,000,000 question, or should I say the $242,900,000 question, who's gonna build all this stuff when we're already short on workers?
Gerritt:That's exactly why these job opportunities are so valuable right now. If you're in construction or thinking about getting into it, there's never been a better time.
Justin:Absolutely. With this kind of growth projected and the current worker shortage, anyone with construction skills is basically sitting on a gold mine. So let's talk solutions here because this worker shortage isn't going to fix itself. What are we seeing in terms of actual strategies that might help?
Gerritt:Well, one big trend is the rise of apprenticeship programs. A lot of companies are realizing they need to grow their own talent pipeline instead of just hoping qualified workers will show up.
Justin:And these programs are getting pretty sophisticated too. It's not just learning on the job anymore. There's classroom training, certifications, the whole 9 yards.
Gerritt:Speaking of education, I'm seeing more high schools partnering with construction companies to create career pathways, getting kids interested early. You know?
Justin:That's crucial because we've gotta change the perception that construction is somehow a fallback career. I mean, with the salaries we're seeing now, it's becoming a really attractive first choice.
Gerritt:Exactly. And let's talk about technology for a second. The industry is adopting more automation and digital tools, which actually makes it more appealing to tech savvy younger workers.
Justin:Plus, these technologies can help us do more with fewer people, which is pretty important when you're facing a shortage of 439,000 workers.
Gerritt:You know what else I'm seeing? Companies are getting creative with their benefits packages. Flexible schedules, better health care, training reimbursement, really trying to compete for talent.
Justin:And there's a push for more inclusive recruitment too. We're seeing more women and minorities entering the field, which is exactly what we need. Tapping into previously underutilized talent pools.
Gerritt:Bottom line is there's no single silver bullet here. It's gonna take a combination of education, technology, better benefits, and probably some policy changes too.
Justin:Like that merit based visa system ABC was talking about?
Gerritt:Exactly. We need to be looking at all possible solutions because this industry isn't slowing down anytime soon.
Justin:Well, folks, that brings us to the end of another episode of Hard Hat Chat. We've covered a lot of ground today on this massive workforce challenge facing our industry.
Gerritt:Yeah. Those numbers are pretty eye opening. 439,000 workers needed in 2025 alone, and that might even be conservative.
Justin:If there's one thing we want you to take away from today's episode, it's that this isn't just a numbers game. It's about the future of our industry and how we're going to adapt.
Gerritt:Absolutely. Whether you're a contractor, supplier, or someone considering a career in construction, these workforce challenges are going to affect all of us.
Justin:Thanks for tuning in to Hard Hat Chat. I'm Justin Smith.
Gerritt:And I'm Garrett Baek. Keep building, everyone, and we'll catch you on the next episode.
Justin:And remember, if you're looking for a career change, construction's got about 439,000 reasons to consider it right now.