Labor Shortages in AEC: The Hidden Impact and How Smart Firms Are Adapting

Labor shortages have long been a headline issue across the architecture, engineering, and construction (AEC) industry. But the latest insights from the Newforma 2025 AECO Project and Information Management Survey uncover a more layered and urgent reality: 41% of firms report project delays due to labor shortages, and 40% say it’s putting pressure on their remaining staff. 

On the surface, these numbers might appear manageable. But when you dig deeper, the real story is one of slowed growth, strained teams, and lost revenue. The hidden cost? Firms are quietly turning away work, forgoing new bids, and shelving expansion plans because they simply can’t staff up in time. 

Why don’t the numbers reflect an even greater crisis? Because the impact is hidden in the work that never starts. Many AECO firms are pulling back, opting not to pursue projects they can’t confidently deliver. This strategic inaction is not a failure—it’s a survival tactic. But it comes at a steep cost.

These “invisible losses” aren’t reflected in metrics like project delays or cost overruns, but they translate into billions in missed revenue and client relationships. When firms sit on the sidelines, competitors seize the opportunity. It’s not just about the work you take on—it’s about the work you’re missing.

These lost opportunities mean missed chances to expand market share, grow client portfolios, and elevate your firm’s brand in the marketplace. Over time, the compounding effect of paused growth can lead to a noticeable decline in influence and profitability.

Pushing existing teams to do more with less inevitably leads to burnout. And burnout isn’t just about lost productivity—it’s about losing key team members altogether. Every resignation represents a loss of project knowledge, relationships, and momentum.

When team members feel they are constantly under pressure without the support of modern tools and streamlined workflows, the quality of their work suffers—and so does client satisfaction. Burnout often results in higher turnover, making it harder to retain experienced staff and adding strain to hiring and onboarding processes. In a labor market already under pressure, the cost of replacing skilled talent is high.

Experienced professionals hold decades of knowledge that’s often undocumented. As they retire or leave the firm, critical information about project history, client preferences, and internal processes can disappear. Without centralized documentation, onboarding new talent becomes slow and error-prone.

This creates major risks for project quality and consistency. Teams may find themselves recreating work, duplicating errors, or spending excess time tracking down old files. Firms that don’t prioritize knowledge capture and information sharing will fall behind competitors who can ramp up faster and make decisions based on historical insight.

The AECO workforce is aging, and fewer new professionals are entering the industry. The survey revealed that 49% of large enterprises and 47% of French firms are experiencing substantial knowledge loss. If firms aren’t capturing that knowledge now, they’ll face widening skills gaps for years to come.

The challenge is two-fold: not only are veteran workers leaving, but emerging talent is harder to attract. Many graduates seek roles in tech or finance sectors, drawn by flexibility and innovation. Without a proactive strategy for recruiting and retaining younger professionals—and equipping them with intuitive, collaborative tools—firms will struggle to remain competitive.

38% of firms are embracing digital solutions to maintain productivity without increasing headcount. Project and information management platforms like Newforma Project Center automate routine tasks, reduce communication silos, and keep teams aligned.

Case in Point: HorganLynch, a leading engineering consultancy, used Newforma Project Center to centralize their project data and automate document control. This eliminated the need for a dedicated document controller and gave staff more time for strategic work.

Director Karel Murphy shared: “With Newforma, the time I’m giving back to the team in their day is significant, but what’s more important is that they’re doing more productive work as opposed to more mundane activities.”

Firms are increasingly relying on centralized systems to standardize processes and capture critical decisions and best practices. This makes onboarding faster and ensures project continuity, even as team members change.

Centralized information management not only improves efficiency but ensures no knowledge is lost during handoffs. Standardized workflows provide transparency, improve collaboration, and make it easier to enforce compliance across multiple projects. In industries where each project has high stakes, this consistency is critical.

Standardization through platforms like Newforma ensures that when staff transition or retire, the process and project data don’t go with them. It stays with the firm, easily accessible and clearly documented.

Forward-looking firms are investing in staff development. By offering mentorship, training, and growth opportunities, they not only keep employees engaged but create internal champions for new technology adoption.

This culture of learning helps firms adapt to evolving project requirements while keeping staff motivated. Upskilled employees are more confident, more efficient, and more likely to stay with the company. They become ambassadors for innovation, helping bridge the gap between older methods and new digital tools.

Training staff on project information management platforms ensures consistency and reduces reliance on ad hoc solutions. It also empowers teams to contribute more strategically across departments.

Rather than chasing every project, some firms are strategically focusing on those that align with their expertise and resource capacity. By being selective, they avoid overextension and protect long-term performance and employee well-being.

Targeted growth strategies enable better use of available resources while reducing stress on already stretched teams. By aligning project selection with capacity and profitability, firms can improve delivery quality and enhance client satisfaction. This approach also creates a sustainable work environment that prevents burnout.

Firms that use project and information management tools to evaluate and manage project pipelines are better positioned to forecast needs, prioritize effectively, and grow without sacrificing quality.

Labor shortages are more than an HR issue—they’re a direct threat to your firm’s growth, profitability, and long-term viability. The firms that respond with modern information management strategies are the ones poised to grow, retain talent, and deliver consistent results no matter the staffing landscape.

Digitally enabled firms are not just surviving—they’re thriving. With the right tools and processes in place, AECO leaders can maintain quality, improve productivity, and build resilience against future disruptions.