“Skills shortages continue to be a major constraint. Around two‑thirds of builders report difficulties recruiting or retaining skilled workers, particularly experienced tradespeople and site supervisors.”

HIA Small Business Conditions Survey 2026

It’s been a tough period for the Aussie construction industry. Rising costs of raw materials have reduced margins, fuel costs are rising and borrowing costs have been high. But one of the biggest challenges faced by Aussie firms has been the shortage of available, skilled talent. 

67% of small firms have reported difficulty finding or keeping skilled workers, according to the recent HIA Small Business Conditions Survey 2026.

Let’s look at the causes of the skills shortages and what you can do to find the right workers.

Why is there a shortage of skilled workers?

There isn’t one singular cause behind Australia's construction skills shortage. Instead, it’s a mix of several factors that are driving the reduction in the available workforce. 

There’s an ageing population in the sector, which has led to a significant wave of retirement among skilled workers. Apprenticeship rates are also at a low, meaning there’s a smaller generation of skilled workers coming up to step into the more experienced shoes. 

The fragmented nature of international skills recognition laws is also preventing qualified migrants from working on site, reducing the available skills pool.

4 ways to overcome the skills shortage

Being able to find licensed tradies, experienced construction managers and skilled engineering roles is vital to running a successful construction project.

So, what can you do to improve your chances of finding and retaining the right skilled workers?

• More flexible working conditions: Try attracting skilled staff by offering flexible working conditions. This could include compressed four-day working weeks or flexible start times, helping workers earn while also achieving an attractive work/life balance.

• Fast-track sponsorship of skilled migrant workers: Think about sponsoring international talent through the Employer Nomination Scheme. Skilled workers with the relevant overseas qualifications can then be recognised through the current framework.

• Attract more subcontractors with better payment terms: Get the attention of licensed, independent contractors by offering guaranteed minimum weekly hours and offering 14-day payment terms to ease their cashflow pressures.

• Fund apprenticeships and upskilling of staff: Build an internal talent pipeline by partnering with your local TAFE to fund apprenticeships. Also consider upskilling the most promising labourers on your payroll to train them in trades and services where you have the biggest skills shortages within your projects.

Build a resilient people strategy for your construction business

Many of the current challenges facing the construction industry are rooted in external factors. But there are ways to review, amend and update your people strategy, making your response to labour and skills shortages more agile, flexible and manageable. 

Come and talk to our team about your skills shortages. We’ll help you come up with workable tactics for finding and filling the skilled roles on your current projects.