Labor Is the New Risk: Why the Construction Workforce Challenge Matters in 2026

By: Rocky Lenzini, Holmes Murphy Property Casualty Client Executive

The construction industry has always been built on people, but in 2026, the workforce challenge has become something more than a hiring issue. It’s now a business risk. Across the Kansas City construction market and beyond, contractors are facing persistent labor shortages, increased competition for skilled trades, and rising pressure to deliver projects on tighter timelines. The result? Rushed hiring, fatigued crews, inexperienced supervision, and ultimately higher exposure to injuries, auto losses, project delays, and rising insurance costs. Labor is no longer just an HR concern. It’s a risk management issue that impacts safety performance, profitability, and long-term growth.

Why Labor Shortages Are Creating Risk

When crews are short-staffed or undertrained, the consequences show up quickly:

• Higher frequency of workers’ compensation and auto claims
• Increased jobsite incidents tied to new or fatigued employees
• Greater burnout among supervisors and field leaders
• More scrutiny from owners, GCs, and underwriters

In today’s market, contractors aren’t just being evaluated on price, they’re being evaluated on stability, leadership, and workforce readiness.

Shifting the Conversation: From Hiring to Strategy

At Holmes Murphy, we’re finding that many of our construction clients are investing heavily in workforce stabilization, specifically around recruiting pipelines, upskilling programs, safety training, and retention initiatives aimed at keeping skilled labor in place. Contractors are also leaning into technology (such as project management platforms, telematics, and automation tools) to reduce labor intensity and improve productivity with the workforce they already have.

If your firm is being impacted, here are some steps I’d recommend:

• Strengthen your recruiting channels by partnering with trade schools, apprenticeship programs, and local workforce organizations to create a consistent talent pipeline.
• Invest in training and upskilling, especially in high‑impact areas like safety, equipment competency, and leadership development.
• Evaluate your retention risks by assessing wage competitiveness, culture, and career‑path visibility — three areas we consistently see tied to turnover.
• Adopt productivity‑enhancing technology that helps your teams do more with less, reduces manual rework, and improves communication across job sites.
• Review workforce‑related insurance exposures to ensure your program reflects the realities of high turnover, aging labor, subcontractor usage, and safety performance.

Forward-thinking construction firms and contractors are changing the way they approach labor, and we encourage you to do the same. In the end, these efforts don’t just protect your employees, they can help you remain competitive, reduce claims, and improve outcomes at renewal.

Rocky Lenzini is a Client Executive within Holmes Murphy’s Property Casualty division. In this role, Rocky specializes in supporting clients in the construction and public entity spaces, helping them tackle their complex insurance needs. To learn more about the workforce challenges facing the construction industry and how Holmes Murphy can help, reach out to Rocky at rlenzini@holmesmurphy.com or visit www.holmesmurphy.com.