What the Labor Shortage Means for Construction Bidding in 2026

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In brief:

Labor shortages will make bidding riskier by 2026, with 6–8% annual wage hikes, longer timelines (10–15% labor float), and extra pricey extra time.
Retirements, lack of younger staff, and strict immigration legal guidelines contribute to the scarcity.

To remain worthwhile, contractors should plan for larger prices, add labor clauses, and enhance scheduling time in bids.

Contractors who adapt their bidding methods now are greatest positioned to reach the approaching years.

Discovering good staff is difficult as of late. And by 2026, it’s going to be more durable nonetheless. This isn’t only a small drawback. It’s an enormous labor scarcity that’s going to alter the way you bid on jobs.

In the event you’re pricing out work for 2026, you want to be further cautious. In the event you guess mistaken in your labor prices, don’t account for costs going up, or mess up the challenge timeline, you would lose all of your revenue earlier than your crew even reveals up.

Let’s break down what the labor scarcity means for you and go over three steps that can assist you keep forward.

The Labor Hole: How Huge is It?

It’s massive. The development business wants extra individuals than it will probably discover.

You’ve in all probability seen that it’s gotten tougher lately to fill open roles. The truth is, nine in ten contractors have openings for commerce staff that they’ll’t fill. That’s an enormous drawback, particularly because the business wants to rent roughly 723,000 workers per year to maintain up with the calls for.

However it isn’t as a result of there’s much less work. Private and non-private tasks are continually added to challenge databases like ConstructConnect® Project Intelligence daily. The true drawback is that the variety of certified individuals simply doesn’t exist. This difficulty is getting larger yearly, which implies the hole simply retains rising.

Why the Scarcity?

An enormous cause for the labor hole is that many expert staff are heading towards retirement. Proper now, one in 5 building staff is 55 or older. The common age for a talented tradesperson is sort of 43, and it’s solely going up.

Because the skilled staff are on the point of retire, there aren’t sufficient young people entering the construction workforce. If building corporations don’t begin getting inventive to attract young workers, like recruiting through social media or apprenticeship programs, they may face challenges in 2026 and past.

And that’s not all. Stricter immigration rules have put further pressure on the development labor market. One-third of building companies say federal immigration actions have induced challenge delays.

Tips on how to Change Your Bids in 2026

Given these challenges, you’ll want to alter the way you bid on jobs. Listed below are three steps you may take to account for the brand new realities of the labor market.

1. Assume Your Labor Prices Will Go Up

Wages are going to keep climbing. To your 2026 building bids, you want to plan for labor costs to go up by 6-8% each year. In the event you bid any decrease, it’s doubtless you’ll find yourself shedding cash.

To guard what you are promoting, embody labor escalation clauses in your contracts. That is only a method of claiming if labor prices go up, your worth goes up too. Tie it to official authorities numbers so the proprietor is aware of you’re not simply making it up. Some house owners would possibly even offer you further time on the schedule in the event that they know staff are arduous to seek out.

2. Add Further Time to Your Schedule

A labor scarcity means jobs will take longer to finish. Even a fundamental process can take extra time in case your crew is stretched skinny or much less skilled due to the abilities hole. Your challenge schedules ought to now embody a 10-15% labor float to account for potential delays.

Additionally, don’t neglect to order your supplies earlier. The very last thing you need is to pay your crew to take a seat round ready for a supply.

3. Do not Neglect About Time beyond regulation

Time beyond regulation is changing into extra frequent, particularly to assist meet challenge schedules. Paying for extra time can simply double your labor prices. In the event you don’t plan for it, this could flip into an enormous hit in your backside line. Work out how a lot extra time you’ll want and embody it in your bid.

The Takeaway

The subsequent few years can be difficult. However if you happen to plan for it, what you are promoting can nonetheless be wholesome and ship nice work. The contractors who do effectively within the subsequent few years would be the ones who actually perceive the labor scarcity and proactively make modifications now to get forward of it.

Begin at the moment by studying extra concerning the present market. Download our free comprehensive Labor Guide to beat labor challenges and keep aggressive within the business.

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