Embracing Technology Amid Labor Shortages: A KPMG Report Overview for Construction Companies

The construction industry is at a pivotal moment as it faces persistent labor shortages but also benefits from enhanced productivity through technological investment. A recent KPMG report, based on a survey conducted in partnership with the Canadian Construction Association (CCA), sheds light on this delicate balance, showing that while challenges abound, opportunities for growth and efficiency are also emerging.

The Current State of Labor Shortages

A substantial 78% of surveyed construction firms report facing shortages of skilled labor, marking a slight decrease from 90% in the previous year. This is good news, albeit the situation remains critical. Nearly 70% of respondents confirm that labor shortages affect their ability to bid on or complete projects, a drop from 86% the year before.

The data points to significant retirements among skilled workers, especially in the residential sector where an estimated 22% are set to retire over the next decade. With Canada projected to need over one million new workers by 2030 for housing initiatives alone, the pressure to find effective solutions is mounting.

The Technology Trend

Despite these challenges, the KPMG survey highlights a promising trend. Approximately 81% of construction firms that have invested in technology report improvements in labor productivity and efficiency. This marks a significant step forward in addressing the labor conundrum.

Firms are prioritizing various advanced technologies. For instance, robots capable of bricklaying, drones for surveying sites, and prefabricated construction methods are gaining traction. Furthermore, 90% of respondents believe that tools like artificial intelligence (AI) and data analytics can significantly boost productivity.

Shifts in Procurement Practices

Another key finding from the KPMG report is the movement towards evolving procurement processes, with 80% of respondents indicating that innovations are being supported. However, there is still a long road ahead. CCA President Rodrigue Gilbert emphasized the need to reform traditional procurement practices to prioritize long-term value over the lowest bid. This shift will allow companies to invest more in innovative solutions without being penalized financially.

What This Means for Your Business

• Invest in Technology: If you haven’t done so already, it’s time to consider adopting technological tools such as AI, data analytics, and automated construction practices. Not only can these innovations help your current workflow, but they can also position your business as a forward-thinking leader in the industry.

• Revise Hiring Strategies: As the labor market remains tight, consider broadening your recruitment efforts. Upskilling your current workforce or partnering with educational institutions can also help mitigate the skilled labor gap.

• Adapt Procurement Models: In stakeholder discussions, advocate for shifts in procurement policies that focus on innovation and collaboration, rather than just cost-cutting measures. This might create more room for strategic partnerships and investments in quality material and technology.

Looking Ahead: Opportunities and Challenges

The road ahead for the construction industry is undoubtedly filled with opportunities and challenges. As technology continues to evolve, companies that adapt quickly stand to gain a competitive edge in an industry beset by labor shortages. However, structural changes in procurement and labor hiring practices will also be essential to ensure sustainable growth.

In conclusion, the takeaways from the KPMG report provide an essential snapshot of where the construction industry stands. By embracing technology and advocating for better procurement practices, construction firms can not only survive but thrive in a transforming landscape.

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Published: 2025-06-26 02:00:00
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