People pressures top global risks for construction firms

A shortage of skilled workers and rising labour costs are now the biggest risks facing global construction and infrastructure companies, according to the latest Corporate Risk Radar from international law firm Clyde & Co.

The report – based on insights from more than 400 senior business leaders – found that “people challenges” have overtaken other concerns such as inflation and cybersecurity, with firms under pressure to attract, train and retain staff amid growing competition.

Clyde & Co said the issue is particularly acute in Europe, where an ageing population is pushing construction firms to recruit outside the region. Once trained, however, many employers struggle to retain skilled staff as rivals offer higher pay and new opportunities.

The survey also revealed that 60% of global executives believe deglobalisation and political uncertainty will pose a “serious risk” to business growth over the next five years, while an equal proportion expect new market entrants, technology and AI to cause major disruption.

James Roberts, partner at Clyde & Co in London, said resilient companies were adapting through more flexible workforce models. “Volatility is a feature, not a bug. The more resilient companies will redesign workforces with automation, flexible resourcing and agile structures,” he said.

Other findings point to increased regulatory pressures, with 64% of leaders reporting that compliance obligations are constraining growth. Many are now investing in centralised “regulatory intelligence hubs” to track fast-changing rules across markets.

Cybersecurity remains a major concern, cited by 67% of respondents. Clyde & Co noted that firms are embedding cybersecurity into company culture and running simulations to strengthen defences against ransomware and data breaches.

The report also highlights a shift in attitudes toward AI, with leaders focusing on productivity rather than innovation. Ben Knowles, partner and chair of the firm’s Global Arbitration Group, said: “Leadership will provide the tools, but each department is expected to figure out how to use AI. The focus is on efficiency over innovation, and this efficiency drive is probably trumping concerns about risks.”

Clyde & Co’s research suggests that construction firms face a complex mix of labour, regulatory, and technological pressures — but those that invest in training, governance and digital risk management will be best placed to navigate the next phase of industry change.