Skilled-Trades Talent Scarcity

94% of construction companies report that finding skilled staff is a key challenge ⁽³⁵⁾. The skilled-trades shortage in the construction industry stems from several key factors. First, the industry suffers from a poor image, as construction work is often perceived as physically demanding, with long hours and challenging conditions, deterring younger generations from entering the field. Second, in many countries, there is a lack of vocational training and apprenticeship programs to address shortages in specialized roles in building technologies, such as electricians, pipe fitters, ventilation technicians, or system integrators. Third, workers with transferable skills are often drawn to other industries offering better pay or working conditions, a trend accelerated by the COVID-19 pandemic, which caused many workers to leave the sector permanently.

The pressure is set to increase as urbanization grows ⁽³⁶⁾, driving demand for new construction. Simultaneously, retrofit rates must globally more than double — in some regions even more — to meet net-zero goals, and the repurposing of commercial real estate in response to hybrid work trends will add to the workload. Compounding this, many workers are nearing retirement. McKinsey & Company estimates that by 2032, 16% of today’s construction workers and 29% of HVAC mechanics in the US will have retired. At the same time, high churn rates will persist, with 1,194,000 construction laborers and helpers and 239,000 HVAC&R mechanics leaving the industry. As a result, 1,514,000 construction jobs and 380,000 HVAC jobs will need to be filled by 2032 in the US alone ⁽³⁷⁾. The 2023 European Employment Services (EURES) report on labor shortages reveals a similar trend in Europe. Twelve countries report a shortage of construction workers, with six identifying it as highly severe. For HVAC mechanics, eleven countries face shortages, six of which are classified as severe ⁽³⁸⁾.

To address the widening skilled-trades talent gap, the construction and HVAC industries must improve their image, invest in education and training, adopt new technologies, and work with governments to implement supportive policies. Bridging this gap is critical to meeting labor demands and achieving net-zero goals.

Attracting younger generations to skilled trades requires improving the industry’s image. Surveys show 74% of Generation Z perceive a stigma around vocational training compared to four-year universities, and only 5% of parents encourage trades careers ⁽³⁹⁾. Additionally, underrepresented groups remain untapped; in Europe, women comprise just 2% of construction workers and 0% of HVAC mechanics ⁽³⁹⁾. In the US, the share of female HVAC workers is 2.6%, only slightly higher ⁽⁴⁰⁾.

Expanding education and training is also critical. Vocational training, certifications, apprenticeships, and on-the-job training must be accessible to untrained workers and career changers. Programs like ROVC in the Netherlands, which trains 15,000 professionals annually, provide a blueprint for success. Upskilling the current workforce is equally important, with 35–45% of Europe’s renovation workers needing training in areas like insulation, ventilation, or heat pumps ⁽⁴¹⁾. Professional training curricula also need transformation, integrating AI, cybersecurity, and software engineering alongside traditional expertise.

Rising labor costs will spur technological innovation to boost efficiency. Components designed for error-free installation will reduce training needs, while augmented reality can guide workers on-site or connect them with remote experts. Prefabricated and modular construction offer further solutions, with preassembled elements like riser zones and facades requiring less labor, cutting timelines, and improving quality.

Finally, supportive policies are also essential, including open immigration frameworks that enable foreign workers, who have traditionally helped address labor shortages, to join the workforce.