The construction industry is grappling with one of its tightest labor markets in recent memory. Inflation, high demand for skilled labor, and competitive compensation trends have created challenges for companies trying to attract and retain top talent.
To navigate these recent trends, construction firms must stay informed about salary expectations and adopt innovative retention strategies.
In this article, Carlo Ferri, Director, Tax Strategies and Construction Industry Group Co-Leader, and Adam Berman, Director-in-Charge, Retained Executive Search , summarize how to build and maintain a strong construction workforce.
2025 Salary Trends in the Construction Industry
As of early 2025, the construction industry continues to adjust its compensation practices in response to ongoing economic factors, including inflation and labor market dynamics. Recent data indicates that base salary increases for construction professionals are projected to average 5.2 percent in 2025, reflecting the sustained demand for skilled labor in the sector.
This trend aligns with broader industry observations. For instance, the National Center for Construction Education and Research (NCCER) reported that average annual salaries for skilled craft professionals range from $60,000 to over $100,000, with roles such as general foremen and instrumentation technicians nearing the upper end of this spectrum.
Despite a slight cooling in the labor market, salary increase budgets remain robust. This recent survey found that planned salary increases across U.S. companies are expected to average 3.7 percent in 2025, consistent with the 3.8 percent average budget increase awarded in 2024.
The construction industry, however, appears to be experiencing higher-than-average increases, underscoring the persistent demand for skilled professionals and ongoing economic pressures.
Innovative Bonus Structures for Retention
Bonuses remain a powerful tool in retaining and motivating employees. In the construction industry, firms are employing a variety of bonus types, including:
- Performance-Based Bonuses: Tied to individual and company performance metrics, these bonuses reward employees who meet or exceed key performance indicators.
- Retention Bonuses: Designed to encourage employees to stay through the completion of critical projects.
- Safety Bonuses: Recognizing employees who contribute to maintaining a safe work environment.
- Spot Bonuses: Awarded for extraordinary contributions or achievements.
- Team Bonuses: Rewarding groups for successful collaboration and hitting collective goals.
Offering consistent feedback and professional development opportunities can amplify the impact of these bonuses. Engaged employees — who feel recognized and supported — are more likely to stay and contribute at higher levels.
Proactive Retention Strategies
Retaining employees isn’t just about compensation. It’s about creating a workplace culture where people feel valued and invested in. Here are a few strategies that construction firms like yours can implement:
- Employee Referral Programs: These programs can not only bring in high-quality candidates, but they also tend to lead to longer employee tenure. Referrals often come with built-in trust and alignment with company values.
- Workplace Engagement: Consistent training, mentorship, and recognition create an environment where employees feel motivated and connected. In our Talent Trends Interview Series video, we dig deeper into this idea.
- Flexibility and Support: Addressing individual needs, such as flexible schedules for childcare or eldercare, can make a significant difference in retention.
Check out our article, Navigating Labor Challenges in Construction: Strategies for Retaining Skilled Workers, for more actionable tactics.
Handling Counteroffer Conversations
While pay isn’t everything, it plays a huge factor in employee retention in the construction industry. Despite best efforts, employees may still seek higher pay or opportunities elsewhere.
When approached with a counteroffer request, construction business owners can handle the situation strategically with these tips:
Stay Calm & Reflect
Understand the context and impact of the request. Employees’ decisions often affect team morale and perceptions of fairness within the company.
Evaluate the Employee’s Value
Determine the cost of replacing the individual, both financially and operationally. If they’re critical to the organization, consider their request seriously.
Probe for Underlying Reasons
Employees often cite pay as a reason for leaving, but other factors like flexibility, workload, or professional development may be driving dissatisfaction.
Develop a Follow-Up Plan
Research shows that 70% of employees who accept counteroffers leave within 12 months. A robust follow-up plan can address the root causes of their initial decision and improve retention.
More Details in Our Construction Compensation Trends Video Interview
We’re seeing key trends shaping talent retention in the construction industry. Employee engagement is critical— consistent feedback, training, and recognition keep teams motivated. Watch our full video interview on Compensation Trends to help your construction business retain a motivated, loyal workforce.
Specialized Services for Construction Companies with Kreischer Miller
Retaining talent in the construction industry requires a multi-faceted approach. While competitive salaries and creative bonus structures are essential, fostering a culture of engagement and support can make a difference.
By implementing these strategies and approaching challenges like counteroffers with care, construction firms like yours can build a loyal and motivated workforce.
For more insights and advice on navigating workforce challenges in the construction industry, please contact us.