Prefab and modular construction are booming—but shops face a persistent labor shortage that threatens project timelines and profits. Simply hiring more workers won't solve this; shops need to focus on retaining and developing their skilled workforce.

Why Talent Matters Now More Than Ever

Construction needs approximately 439,000 new workers in 2025 alone, driven by growth in sectors like infrastructure and data centers. Yet half of contractors say finding—and keeping—workers is tougher than ever (ABC, Construction Dive). An aging workforce compounds the problem, with over 25% of construction workers nearing retirement, making it critical to upskill younger employees to meet modern prefab demands.

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The True Cost of Turnover

High turnover is costly, with construction facing turnover rates around 57% in 2023. Replacing an employee can cost up to twice their annual salary, and project delays from turnover inflate costs by up to 20%. Investing in retention reduces these expenses significantly; reducing turnover from 32% to 14% can save around $320,000 annually.

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Prefab’s Unique Talent Advantage

Prefab offers intrinsic worker benefits, creating safer, more predictable environments compared to traditional sites. Companies like CRATE Modular highlight better labor retention due to consistent indoor work and improved work-life balance. Prefab reduces physical and mental stress, enhancing job satisfaction and loyalty.

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Attracting the Next Generation

Younger workers often view construction negatively, but prefab can change this narrative by showcasing cleaner, technology-driven environments. Highlighting advanced tools like BIM and robotics, and emphasizing sustainability and innovation, positions prefab as an appealing career path for Gen Z. Partnering with educational programs, internships, and pre-apprenticeships also builds a strong talent pipeline.

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Retaining Skilled Workers

Retention goes beyond competitive wages. Comprehensive benefits, including wellness programs and safety incentives, significantly improve loyalty and morale. For example, safety bonus programs have shown up to a 25% reduction in turnover. Clear career paths and professional development, like structured training programs, further reduce turnover.

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The Bottom Line

Investing in talent isn’t just good HR—it’s smart business. A stable, skilled workforce boosts productivity, reduces rework, enhances team morale, and ensures long-term profitability. Companies embracing strategic talent management are better positioned to deliver projects faster and more reliably, making prefab shops preferred partners in today’s competitive market.

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Prefab’s future belongs to shops that prioritize people, leveraging a strong talent strategy as their ultimate competitive advantage.