System Dynamics Analysis of Construction Workforce Development

Abstract

Abstract The US construction industry faces a significant workforce shortage, which is expected to increase due to the projected growth of this industry along with retirement of the current aging workforce. The workforce composition of the construction industry shows several demographic groups remaining an untapped talent pool despite comprising a small fraction of the current workforce. This study examines how workforce demographic composition parameters interact with project Key Performance Indicators (KPIs) and labor characteristics in construction from a systems perspective. A qualitative system dynamics model incorporating 42 variables was developed based on literature to analyze the complex interrelationships between workforce initiatives and industry outcomes. The study finds 11 reinforcing feedback loops focusing on indicators such as psychological safety, project profitability, sustainability, and team satisfaction. Furthermore, the analysis demonstrates how targeted recruitment and retention initiatives can create self-sustaining cycles that enhance both workforce composition and project performance. The findings provide construction industry decision makers with an overall evidence-based picture of workforce development strategies that can address labor shortages while improving project outcomes. This study provides the foundational causal structure linking workforce composition dynamics and project-level outcomes, from which targeted interventions can be systematically designed and evaluated.