Construction industry wages are expected to grow at a rate greater than inflation, but at a slower rate than seen in previous years, according to a 2024 Construction Industry Salary Report published by Moss Adams.

Most employers are looking to remain competitive in this market through comprehensive benefits packages in lieu of salary increases, the report states.

Tricia Galvano, Spokane-based partner at Moss Adams, says highlighting the alternative benefits that are available to workers is a priority for construction companies here to attract and retain employees. 

Many employers also are touting other nonmonetary benefits such as culture, flexibility, community engagement, and social responsibility at the workplace as a recruitment strategy, and have plans to increase medical benefits, paid time off, and ownership opportunities for workers as a result, she says.

Average construction wages in the Eastern Washington, Idaho, and Montana region are about 6% higher for employees in 2024, compared to 2023 wages. Projected regional wages in 2025 are expected to rise 4.5% overall, the report shows. 

In 2024, over 80% of 275 survey respondents said they're covering 75% to 100% of the medical premiums for nonmanagement employees, and 85% of companies are offering paid holidays for all employment levels, she says.

Succession planning strategies also are shifting with some companies that are opening up next-generation ownership opportunities to key employees outside of a family-owned structure. Employee stock ownership plans are gaining popularity as a way to incentivize workers to buy into the business for the long term.

"The owners of these companies are also aging, and they're looking for that next generation to take over their companies," Galvano says. "Over my 20 years doing this, it was always passed down generations, but now they're having to look at key employees and not necessarily keeping it within the family."

The salary report includes compensation trends from 40 companies with operations in the Eastern Washington, Idaho, and Montana region. Compensation trends include 89% of companies that plan to offer bonuses as an incentive for reaching performance and productivity goals, down 1 percentage point from 2023.

Retention bonuses specifically are gaining traction among construction companies that are trying to keep their current employees, while signing bonuses are losing momentum, with 37% of companies planning to offer a signing bonus, down from 40% in 2023, according to the salary report.

The percentage of companies that plan to offer cost-of-living salary adjustments next year has increased 6 percentage points from last year to 61%.

"For the last several years, people have really thought about the different benefits they can provide, and of course, there's the bonuses," says Galvano. "But people also are thinking about retirement plans or deferred compensation."

Retirement benefits in the salary guide include 401(k) retirement plans, profit-sharing plans, union pensions, and deferred compensation.

The salary report shows roughly 90% of all companies surveyed offer a 401(k) to all employees, and more companies are showing interest in profit-sharing options than in 2023. Additionally, the percentage of companies that offer union pensions has increased to slightly above 10%, while fewer companies are offering deferred compensation plans this year.

"The industry has really faced persistent labor shortages for years ... that comes and goes with different economic pressures," says Galvano. 

Total compensation for construction employees next year likely will fluctuate based on a company's profitability and project backlog, she says.

A steady flow of work has been maintained in the industry overall in 2024, however pressure from interest rates and other economic factors is causing many companies to reevaluate compensation strategies, she says.

Moss Adams' salary report highlights current and projected compensation trends to help construction companies stay competitive in a market that's struggling with labor shortages, she explains. 

Galvano has helped prepare the salary guide since its inception in 2000, she says. 

"Our report focuses on the quantitative aspect of attracting and retaining talent, but there's also the qualitative factors to be considered," says Galvano. "People look to companies that provide opportunities for advancement, a positive workplace culture."

Salary trends in the report are provided for a range of positions including executive leadership, finance and accounting, human resources, project management, safety professionals, marketing, engineers, architects, administration, and skilled trades people. Salary data also is broken down by the type of construction, contractor types, and company revenue.

Some of the largest salary gains included in the report are for executive salaries in the region, where CEO salaries have grown about 13% to $172,788, from the average executive salary in 2023.

Average laborer salaries have risen about 10% in the region to over $56,700, from the average salary of $51,300 last year. 

Safety director roles, superintendents, and some administrative positions had declining average salaries this year, the report shows.

Fewer construction employers are indicating interest in changing the compensation offered to workers in 2025, Galvano adds.

Looking ahead, construction salaries in the new year are expected to continue attracting younger workers with decent wages, who don't want to spend time and money on a four-year college education, she says.

"Labor shortages in the industry continue, but we need to do all we can to promote the industry so the younger generation realizes what good salaries are possible," says Galvano.