Construction HR Insights from ELMO’s 2025 HR Industry Benchmark Report

The construction industry’s HR revolution has begun

With upskilling posing a challenge, hybrid work debates still unsettled, and a new generation of construction employees entering the field, here’s what you need to know for 2025.

AI has firmly landed in construction HR

AI is no longer just an emerging trend, it’s a reality that’s already reshaping HR operations across the construction sector. The data shows that:

• 86% of HR professionals expect AI to significantly impact their department in the next year
• 73% feel prepared to integrate AI into HR processes
• 51% of organisations are increasing their AI budgets in 2025.

AI is can assist the construction sector by:

• Streamlining admin tasks, recruitment, and workforce planning
• Enhancing safety monitoring, project scheduling, and cost forecasting
• Helping with skills gap analysis, employee engagement, and strategic decision making.

It should be made clear, though, that rather than replacing jobs, AI will largely augment roles and increase productivity. This is enablement, not replacement. HR teams that actively embrace AI driven tools will gain a major competitive edge and put them in good stead for the years ahead.

However, AI can still pose challenges, as we discuss in our full report. 

Hybrid work remains rather contentious

Five years on from the pandemic, we’re still seeing the hybrid work debate roll on. In our report, we found that:

• 37% require full time onsite attendance
• 43% operate hybrid models with mandated office days
• 17% allow employees full flexibility over hybrid work schedules.

The search for the ideal balance continues, with 73% of organisations planning to revise their policies this year, and:

• 40% are implementing mandated in-office days
• 29% are moving to fully flexible hybrid options
• 16% are moving to 5 days in office.

It’s increasingly clear that organisations that successfully align work policies with employee preferences will be better positioned to attract and retain top construction talent. 

However, for those who are required to be onsite, such as on construction sites, alternate benefits may need to be offered.

The rise of the Gen Z workforce

Baby Boomers are retiring, and Gen Z are stepping into their shoes. By 2030, Gen Z will make up a third of the workforce. The challenge? Their expectations tend to differ substantially from previous generations.

HR professionals in construction report noticeable generational differences:

• 44% say there is a significant difference in work styles
• 44% observe some differences but not drastic.

These are strong figures that tell us that organisations that don’t adapt their management approach may struggle to retain younger workers. According to our ongoing Employee Sentiment Index surveys, Gen Z employees across ANZ consistently rank flexible work as a top factor in workplace retention

HR emerges as a strategic force

We’ve found that HR professionals are seeing an increased level of collaboration between their Chief Human Resource Officer (CHRO or equivalent) and executive leadership: 

• 64% report strong partnership with the Chief Financial Officer
• 62% see strong collaboration with the Chief Technology or Information Officer 

This shift highlights HR’s growing role in:

• Aligning HR strategies with organisational goals
• Using financial data to drive workforce decisions
• Predicting and preparing for future workforce trends.

What are the biggest challenges in construction HR for 2025?

While progress is evident, construction HR professionals still face significant challenges, telling us that:

• 29% identify the economic outlook as a significant issue
• 24% struggle with upskilling, cross-skilling, or reskilling employees
• 23% report a shortage of labour affecting HR initiatives.

Economic conditions aside, these challenges highlight the need for a stronger focus on developing internal skills and overcoming the labour shortage through sharper recruitment and retention solutions.

Construction HR wrap up for 2025

So, what did we learn? The HR landscape in construction is evolving fast, with AI integration, hybrid work tensions, and a new generation of workers reshaping the industry. 

HR is taking a more strategic role, influencing leadership decisions, and tackling challenges like upskilling and labour shortages. Organisations that embrace AI responsibly, refine work policies, and adapt to Gen Z’s expectations will position themselves better for success in 2025.

Read the full 2025 ELMO HRIB report