How Construction Firms Can Retain Talent in 2026
The construction industry in Australia is entering 2026 with both opportunity and challenge. With a record infrastructure investment pipeline of $242 billion under way, demand for skilled workers continues to rise rapidly but so do workforce gaps. Infrastructure Australia forecasts a shortage of 141,000 construction workers by 2025, potentially rising to 300,000 by mid-2027, if current trends continue.
This persistent labour shortage makes talent retention one of the sector’s most critical priorities. With competition for skilled tradespeople, labourers and site supervisors intensifying, retaining existing staff is both cost-effective and essential for project delivery.
The Scale of the Challenge: Skills Gaps & Retention Pressure
According to the 2025 Occupation Shortage List, trade roles, including those vital to construction, remain among the hardest to fill across Australia, even as overall shortages ease slightly in some sectors.
Turnover also plays a significant role in workforce instability. Across industries, employee churn costs organisations up to $2.9 trillion globally per year due to recruitment and training expenses underscoring how costly replacements can be.
In construction specifically, the combination of an ageing workforce and declining trainee numbers compounds these issues. Over 25 % of Australia’s construction workforce is now over 55, meaning many experienced workers are nearing retirement without enough new entrants to replace them.
Why Retention Matters More Than Ever
Retention isn’t merely a HR metric, it influences productivity, knowledge continuity and project outcomes. Every skilled worker retained:
- Saves on recruitment and training costs
- Preserves institutional knowledge
- Strengthens workplace culture
And in an industry where projects are often tightly scheduled and high-risk, continuity of talent can be the difference between on-time delivery and costly delays.
5 Practical Strategies to Retain Construction Talent in 2026
1. Competitive Compensation & Growth Pathways
With salary expectations rising across construction, offering competitive wage packages and clear progression paths signals value to your workforce. It’s not just about base pay development opportunities matter.
2. Structured Onboarding & Mentorship
A strong onboarding experience lays the foundation for engagement. Pairing new hires with seasoned mentors ensures smoother integration, better performance and higher retention rates.
3. Upskilling and Training Programs
Encourage workers to expand their skills particularly in emerging areas like digital tools (BIM, site tech) and project management. Construction firms that invest in training see higher retention and adaptability.
4. Prioritise Health, Safety & Wellbeing
Construction remains a physically demanding field. Prioritising safety standards, mental health support, and wellbeing programs reinforces that you value your people beyond their output.
5. Culture of Recognition & Appreciation
Simple, consistent recognition builds loyalty. Rewarding achievements from safety milestones to leadership excellence helps people feel seen and appreciated.
Looking Ahead: Workforce Resilience in 2026
As construction activity evolves through 2026, retaining talent will be one of the most impactful levers for success. With continued investment in infrastructure and housing, the companies that empower, train and retain their teams will be best placed to thrive.
For construction employers, retention strategy isn’t an HR checkbox, it’s a strategic priority.