Six Months In: Why 2026's Workforce Gap Isn't Going Away

The Hiring Paradox of 2026 | Caroline Burgreen, President & CEO

We're six months into the year, and the data is telling two different stories at the same time, and it's playing out almost identically across two of the industries we spend a lot of time in.

Manufacturing:

Job openings climbed to somewhere between 440,000 and 510,000 through Q1, up from the 394,000 to 426,000 range we saw at the end of last year. Wages crossed a threshold that's been a long time coming too: production workers are now averaging over $30 an hour for the first time on record. Reshoring announcements keep stacking up, and capital is moving into new facilities at a pace that should have every plant manager excited about what's next. But filling those roles is just as hard as it's ever been. NAM's Q1 survey put the average unfilled rate at 4.1%, with one in four manufacturers reporting vacancy rates above 5%. That number hasn't moved much since last fall. It's not a spike. It's friction that's settled in and decided to stay.

Construction:

While a related version of the same story we're seeing in manufacturing, construction is telling a little bit of a different story. Hiring actually slowed to start the year, with contractors reporting 231,000 open positions at the end of January, a drop of 14,000 from December and roughly flat compared to a year earlier. Firms are playing it cautious right now. But step back from the monthly numbers and the real picture shows up. The industry still needs to attract an estimated 349,000 net new workers in 2026 just to keep up with demand, a number expected to climb to 456,000 in 2027. And roughly nine in ten contractors say they're struggling to fill open positions. Construction has plenty of need. What's missing is workers willing and able to do the work, a different problem than the headline hiring numbers suggest. And it's a story we talk about at our own dinner table too, not just one we pull from a report.

The Common Thread:

The investment is real. The construction spending is real. The reshoring jobs are real, on paper. But announced jobs and filled jobs are two completely different metrics, and the gap between them gets measured in years, not quarters. Companies are building the factories before they've built the workforce to run them. Contractors are bidding on data centers and infrastructure projects with crews they don't have yet.

We're also watching the nature of the hiring problem shift in both industries, just in opposite directions, and we're seeing it firsthand across a lot of the searches we're actively engaged in right now. In manufacturing, it used to be "we can't find anyone." Now it's increasingly "we're drowning in applicants and still can't find the right one." Screening volume, candidate verification, and unfilled higher skill roles like maintenance techs, machinists, and engineers are eating recruiter bandwidth across the board. The constraint moved. Quantity used to be the problem. Now quality is.

Construction's version of the same shift is demographic. Close to 41% of the current construction workforce is projected to retire by 2031, and nearly 40% of skilled construction workers are already over 45, with almost one in five electricians over 55. Average tenure in the industry sits at just 3.9 years, so even the workers coming in aren't staying long enough to build the institutional knowledge the ones retiring are taking with them. The real issue is the pipeline, not a flood of applicants, and the clock on it runs on retirement dates, not market conditions.

As we're halfway into 2026, if you feel like the hiring landscape has changed this year without a lot of discussion around it, you're right. Manufacturing and construction got there by different roads, but they landed in the same place. More demand than supply, and a definition of "the right candidate" that keeps getting more specific.

What This Means To You

Here's what you can do differently in Q3:

The labor shortage is structural, not cyclical. In the skilled trades manufacturing depends on most, machinists, tool and die makers, the people running the equipment, the average worker is pushing past 50, and apprentices aren't entering fast enough to replace them. Retirements are pulling people out of the workforce at roughly the same pace reshoring is trying to add positions, and that math doesn't improve when the economy cools down.

"Buy" is getting more expensive than "build." With wages climbing and the right candidates harder to identify in a flooded applicant pool, the calculus on whether to recruit externally versus develop internally is shifting. The build, buy, or borrow framework is worth revisiting this quarter, role by role, not as a blanket policy.

Workforce planning has to happen before the groundbreaking, not after. OEMs surveyed in the 2025 USA Reshoring Survey said they'd bring back 30% of offshored production if the skilled labor existed domestically. Tariffs only moved that number to 23%. A weaker dollar got it to 21%. Tax cuts landed at 18%. Every other lever they tested trailed behind one thing: whether the workers actually exist.

A few questions worth asking yourself this week:

• Are we measuring success by how fast we filled a position, or by whether that hire is still there and performing in twelve months?
• If a key technical role opened up tomorrow, do we know how long it would actually take us to fill it, not how long we hope it would take?
• Are we screening for volume because we have to, or because our process was never built to filter for quality in the first place?
• Where in our org are we one retirement away from a real problem?

Where I See This Outside of Work | Kelly Gerritse, Chief Operating Officer

This was the first year both of my kids were in elementary school at the same time, and nobody warned me what that actually meant.

Daycare doesn't have spirit week. Daycare doesn't have student of the week, a diaper and wipes drive where the winning class gets to go play with baby goats, a walk a thon, a spring concert, a preschool graduation, and teacher appreciation week, all stacked into the same eight weeks. I found out about most of these the way you find out about most things as a parent: a flyer in a backpack, the night before, while I was also trying to close out a search.

I did not have a system for this. I had a calendar that was already full of client calls and candidate interviews, and now it also needed to hold goat field trips.

Something had to change, so I built what I now call my Big 3's.

Every day, I write down three things I need to get done for work. Three things I need to prepare for the kids. Three things the house needs. That's it. Not a list of forty. Three in each bucket, every day, so nothing important gets lost in the noise of everything urgent. I also keep a short list of daily habits that are just for me, because none of the other three buckets run well if that one's empty.

It sounds almost too simple to mention. But it's the same lesson we're talking about on the operations side this issue. You don't get to wait until things calm down to build your structure. You build it in the middle of the chaos, with whatever you've got, because the chaos isn't going to politely wait its turn.



If you're in a season right now where you feel like you're white-knuckling it through one more event you didn't see coming, you don't need a perfect system. You need three things a day, in the buckets that matter most, and the rest can wait.