The AI That Earns Its Place on a Job Site | Opinion

The construction industry is one of the most labor-intensive sectors, yet remains one of the least digitized. Hours, costs, and paperwork are still often communicated via text messages, phone calls, and spreadsheets. Many AI systems being marketed to contractors today offer little to no improvement in this area. Contractors primarily care about payroll accuracy rather than AI.

Over the next few years, the impactful AI will not replace workers but solve previously infeasible problems due to cost or labor constraints. Labor costs for construction projects range from 30% to 50%. However, nearly 40% of contractors still rely on paper time sheets to log hours. Tracking labor expenses is the most expensive line item, but with the most unreliable method.

Labor shortages and rising wages are major concerns for 32% of contractors, with the industry estimated to be missing 349,000 workers by 2027. Growing up in a family of tradespeople, the author witnessed how much back office time was spent correcting improperly recorded hours. Over time, the same scenario played out with contractors spending Friday afternoons verifying hours, entering them into spreadsheets, and reconciling with payroll.

AI has the potential to revolutionize this process, capturing hours automatically (e.g., GPS-verified) and ensuring accuracy. Reliable labor tracking can protect businesses against wage claims, improve budget management, and ultimately lead to higher margins. Contractors who leverage AI to save hours, catch errors, and protect margins will likely outperform competitors in the next five years.

The key question is not whether AI will replace people, but how it can augment them to deliver significant value.