Minnesota’s construction industry continues to grapple with persistent workforce shortages that leaders say are increasingly limiting business growth, delaying projects and putting pressure on both contractors and trade partners statewide.
A recent survey released by the Associated General Contractors of Minnesota found that workforce availability is now the single biggest challenge facing construction firms. According to the findings, 78% of respondents said labor shortages are having either a “somewhat negative” or “very negative” impact on their operations.
That conclusion reflects a long-standing concern within the industry.
“It’s something the industry has talked about for a very long time,” said Shaun Sheller, senior vice president of Minneapolis-based Roers Cos.
While the issue is not new, several factors are compounding the challenge. Minnesota’s construction sector continues to grow, driven by population increases, aging infrastructure and rising demand for advanced building technologies. At the same time, retirements are accelerating, fewer young workers are entering the trades, and skill requirements are rising as contractors adopt tools such as augmented reality, drones, artificial intelligence, robotics and modular construction methods.
State projections underscore the pressure. The Minnesota Department of Economic Development’s December 2024 Employment Outlook estimates roughly 5,015 new construction jobs will be added in the metro area between 2022 and 2032, further tightening an already strained labor pool.
“A lot of people in the industry have cut back because of struggles getting projects started,” Sheller said. “We’ve been very fortunate to grow and bring in more projects and have more people interested in our work. We see a lot of people with three to five years of experience who want to grow into more senior positions.”
Workforce surveys conducted nationally by the Associated General Contractors of America and the National Center for Construction Education and Research show that labor shortages remain the leading cause of construction project delays, a trend echoed across Minnesota.
Contractors say the imbalance between experienced workers leaving the industry and new workers entering it is becoming more pronounced.
“It feels like the calm before the storm,” said Jason Gabrick, regional senior vice president of operations for Minneapolis-based Ryan Cos. “The industry has been losing more than we’re gaining in the crafts and trades. Our projects have been able to stay on track, but it’s gotten a lot harder trying to balance a lot of projects.”
Gabrick said the most difficult roles to fill are mid-level supervisors and project managers, positions that require both formal education and years of hands-on experience.
“They are really hard to replace. Education provides” a great foundation” Gabrick said, but no amount of formal schooling can take the place of on-the-job experience.
To address the gap, Ryan Cos. has expanded its use of internships and apprenticeships, focusing on developing talent internally.
“There’s nothing better than organic growth, bringing team members in early, pairing them with mentors and training them,” Gabrick said.
The company is also increasing its outreach to colleges and universities.
“In this market, we have great universities and colleges who have created tremendous curricula. So, we are in those classrooms presenting to students on construction careers, and serving on advisory boards, which helps us get to know students,” Gabrick said.
Some contractors note that a recent slowdown in construction activity has temporarily eased workforce pressures, but long-term concerns remain.
Partially due to the slowdown, maintaining staffing levels has “not been a major issue” for Kraus-Anderson, according to Rich Jacobson, executive vice president and chief operating officer.
“To deal with the variables we’re doing work on weekends, off hours, to complete projects on schedule. And We’re extremely fortunate in this market to have subcontractors are truly partners,” Jacobson said.
Still, Jacobson acknowledged that recruiting mid-level managers with 10 to 15 years of experience has become increasingly difficult, an issue he attributes in part to the lasting effects of the Great Recession, the COVID-19 pandemic and an aging workforce.
“We’re seeing a whole generation heading toward retirement with not as many coming back into the trades” Jacobson said. “For every four retiring, there is only one new employee coming in to replace them.”
Trade partners are feeling the impact as well.
“And, ‘our trade partners – craft workers and sub-contractors – are really seeing the impact of retirements on a daily basis,’” Jacobson said.
Kraus-Anderson has also experienced tighter labor markets in states such as Arizona, and while stricter immigration policies could affect labor supply, Jacobson said it is still too early to measure the local impact.
To remain competitive, firms are turning to a mix of strategies: promoting from within, using traveling employees in tighter markets, expanding recruiter teams, offering tuition reimbursement and enhancing benefits such as 401(k) matching.
“There’s no one solution; you need a bag of tricks to fill some of the positions,” Jacobson said.
Beyond compensation, company culture has become a growing factor in recruitment.
“Many of those in the job market now are looking for a company culture that treats them fairly, a good work-life balance … the full picture,” Gabrick said.
Ryan Cos., which has had a strong 2025 driven by health care and industrial projects, is also asking existing employees to play a role in recruitment by promoting construction careers within their communities.
“And we’re getting out to the middle schools and high schools, to bring awareness that (construction) is a viable career,” Gabrick said.
Partnerships with community-based training organizations such as Urban Ventures’ Lake Street Works and Summit Academy are also expanding access to construction careers for new entrants.
“A lot of it is awareness. Many people don’t understand what opportunities exist. They are plentiful and are only going to become more plentiful,” Gabrick said.
Originally reported by Dan Emerson in Finance - Commerce.
