ENR Top 600: AI Boom Tests Talent Pipelines

An employee of Primoris Services Corp. unit ARB Underground tests a 30-ft natural gas pipeline at the Port of Long Beach in California. The process checks pipe coatings to ensure there are no pinholes or cracks. Six heavy cranes and six side boom tractors were needed for underwater pipe installation on an on-dock rail facility project.
Photo courtesy of Primoris

Keith Wayne, CEO of Wayne Brothers, ranked No. 189 this year, calls navigating the data center market’s “uncharted waters” one of the firm’s greatest achievements in the past year.

“We have been engaged in this sector for 20 years while it was first maturing as a standalone sector and now has exploded to become the leader of year-over -year growth rates,” he says, noting that the design-build firm “sometimes struggled to keep up” with intense project schedules and productivity demands from owners.

Wayne adds that he expects “significant pain” as contractors compete to guide projects across the finish line first. “To borrow the terminology of a prior contractor friend, ‘Sometimes the project you don’t win may be the most important one of the year for your company,’” he says.

Of specialty contractors that filed surveys this year and last year, 65.6% reported higher revenue on this year’s list. Yet the percentage of firms reporting a year-over-year increase has been sliding for the past few survey cycles, since 2023, when 73.1% of firms reported an increase on the survey. When looking only at firms ranked in the bottom quarter of the list, however, that number falls to 43.8%.

With increased demand for specialized skills tied to data center construction, the percentage of firms reporting a shortage of craftworkers also increased this year—with 62.6% of contractors reporting a shortage compared to 57.4% last year. Three-quarters of electrical contractors reporting their craftworker status said they were short of workers, with 73.1% of utility contractors and 63.9% of mechanical contractors also reporting gaps.

“The difference today is the speed and scale of the projects,” says All 5’s Construction President Lee Mason about the labor shortages. He says the No. 246-ranked specialty contractor is focused on improving systems and processes so teams can operate efficiently as their operations grow.

Mason adds, “We need to build our workforce and leadership team faster while maintaining the same standards for safety, quality, and performance.” For many Top 600 contractors, that process begins with getting the right people to steer projects to success.

Shifting Gears

As much as data center hyperscalers such as Microsoft, Google, Meta, Apple and IBM are driving increased demand for specialty contracting services, Top 600 firms set the speed by ensuring jobsite safety standards and labor needs are adequately addressed.

“The challenge has evolved from simply finding workers to developing people who can perform increasingly technical work in demanding project environments,” says Lee Gros, president and CEO of the No. 223-ranked Penhall Co. He says the company has moved to address labor challenges internally via “stronger onboarding, in-house technical training, leadership development, and clearer career paths.” It also invests in specialized talent, project management and coordination across service lines, “enabling us to take on larger, more complex projects across the United States while continuing to deliver strong local service.”

At the jobsite level, project size and scale has “increased significantly” and locations have become “more remote,” says Mike Holmes, vice president of business development at Rosendin Electric, ranked No. 7. In turn, this has made attracting skilled labor “more challenging,” he notes.

“It’s about having the right experience available at the right time,” adds Eswar Burra, COO of American Structural Concrete, ranked No. 274. “When project starts shift, or multiple jobs accelerate together, maintaining continuity, productivity and quality becomes more difficult,” he says.

From an overall market perspective, site entitlement and permitting have been two of the largest challenges for Strack Inc., says Senior Vice President Jim Sams.

“Its common knowledge that the mission critical and data center markets have been plagued with these issues in Georgia of late,” he notes.

The state is also where artificial intelligence company OpenAI intends to build a $30-billion AI data center campus, known as Project Camellia, which has faced legal challenges over zoning approvals in Effingham County.

“We do what we can on the front end of the job planning for our clients, working collaboratively with the civil engineer to mitigate potential permitting hurdles that may show up during a review period, delaying the project start,” says Sams. “The value of collaboration on compliance coupled with constructability early in the planning and design process cannot be understated.”

Absent adequate labor resources backing decision-making, Airo Mechanical CEO Matt Baude says it becomes more difficult for specialty contractors to reduce risk and bake certainty into their scope of project deliverables.

“The most pressing challenge is creating certainty for customers in a market where project timing, budgets and priorities continue to evolve,” he says. Compared to previous years, the No. 308-ranked firm has taken to increasing coordination before construction begins and offering greater flexibility throughout execution, says Baude, explaining that competition among firms has also changed as they invest in outsourcing labor resources.

“General contractors are entering markets from other regions and bringing different expectations around technology, communication and project delivery,” says Baude. “Relationships still matter, but specialty contractors also need the people, processes and technology to perform consistently at scale.”

Digging Into Opportunities

Amid increased demand for specialty contracting services, Top 600 firms say there are also increased opportunities to shore up backlogs with work in markets in which they have less of a footprint.

At Ryan Fireprotection, ranked No. 210, CEO Dan Ryan says the firm is seeing its “most significant opportunities” in industrial—“particularly large-scale pharmaceutical manufacturing, as well as refining and petrochemical facilities.” The surge in data center construction has created a greater need for specialized expertise in fire protection, he adds.

“When you’re protecting infrastructure and technology representing billions of dollars in investment, the goal is to detect a fire at its earliest possible stage, long before you ever need to put water on it,” says Ryan. “Designing, installing, and maintaining systems at that level requires specialized expertise. As data centers become larger and more sophisticated, the demand for those skills is growing right along with them.”

Data centers have also been a boon for steel erection, says James Barlow, CEO at BZI, ranked No. 98.

“These [data center] projects require substantial structural steel packages, highly coordinated fabrication and erection and the ability to mobilize skilled teams and specialized equipment across multiple locations,” he notes. “That combination aligns closely with BZI’s integrated capabilities and experience delivering projects at significant scale.”

JRCRUZ Corp. President Peter Lauro says the firm has waded into trenchless construction as cured-in-place pipe lining projects are becoming a preferred method for rehabilitating critical underground infrastructure in densely populated areas. This is “particularly in densely populated areas where traditional open-cut construction can be extremely expensive, disruptive and burdensome to the surrounding community,” he explains.

“We believe municipalities and utility owners will continue to look toward trenchless rehabilitation methods as they address aging infrastructure while trying to minimize surface disruption,” he adds.

For Pacific Structures, ranked No. 219, subsidized affordable housing in California continues to be the concrete contractor’s most active market, says President Ron Yen.

“The state’s housing deficit is real, and while these projects are smaller, typically 60 to 100 units rather than 200 or 300, there’s steady volume,” he says. “Many use prefabrication or volumetric modular construction, and we’ve adapted how we deliver concrete to support those methods.”

As local governments address aging infrastructure, Associated Construction and Engineering CEO Larry Wombles says the firm sees its strongest backlog growth in water storage projects to serve expanding communities and address aging systems. The firm is ranked No. 297.

“Housing development requires supporting infrastructure. Before communities can accommodate additional residents, they need adequate water storage, pumping capacity, distribution systems, and wastewater facilities,” he says. “Those needs create opportunities for specialty contractors with the experience to build and rehabilitate essential infrastructure.”

Battling Rising Costs

Top 600 firms overwhelmingly reported that costs have steadily increased across labor, building materials and consumables such as fuel and construction tools. Such cost considerations are forcing many Top 600 firms to weigh risks against the resources needed to grow operational capacity.

“Depending upon the industry, cost pressures have become more significant and increased competition, while capital funding isn’t as strong,” says Dustin Stapleton, CFO at No. 269-ranked Olsson Industrial Electric.

Lithko Contracting CEO Rob Strobel adds that skilled trade talent remains a “scarce resource” in the same way that “lumber prices fluctuate, and tariffs can also impact project costs.”

One way the No. 25-ranked specialty contractor is addressing such challenges is by getting involved in projects earlier through design-build and design-assist relationships, says Strobel. “The earlier we’re involved, the more opportunity we have to influence how projects are built and reduce labor requirements,” he says, adding that the firm is also looking into near-site manufacturing and modular construction approaches due to reduced labor demands.

Adding to labor and material cost unpredictability, Optiline Enterprises CEO Leo Marchesseault says materials prices can also vary considerably depending on project location and timing. This puts added pressure for specialty contractors to keep to tight project timelines.

“The most pressing challenge is creating certainty for customers in a market where project timing, budgets, priorities continue to evolve. ”

Matt Baude, CEO, Airo Mechanical

At the No. 341-ranked specialty contractor, he says the approach has been to focus “less on trying to predict every cost movement and more on improving productivity, procurement discipline and visibility.” Such a strategy includes better forecasting, purchasing strategies, production tracking and early identification of project risk, allowing the firm to manage cost pressure before it becomes a field problem.

Marchesseault adds, “Productivity remains one of the greatest opportunities available to specialty contractors.”

International Asbestos Removal Inc. CEO Karen Grando says the firm is experiencing cost increases in “virtually every area of the business,” with insurance among its largest expenses.

“Health insurance for our employees continues to rise, as do general liability and workers’ compensation costs,” she says. “For contractors operating in New York, the liability environment associated with elevation-related construction exposures under the Scaffold Law adds another layer of cost and risk.”

For Select Demo Services, ranked No. 284, labor, insurance, transportation, disposal and equipment-related expenses continue to put pressure on project costs, says Vice President Sarah Marcone.

“Disposal can be challenging because pricing and available outlets vary considerably depending on the waste stream and project location,” she says. “Our approach has been to focus on planning and production rather than simply passing costs along. That includes detailed preconstruction planning, identifying recycling and disposal outlets early, maximizing material recovery, investing in equipment that improves production and using our own workforce across multiple disciplines whenever possible, Marcone points out.

The earlier a demolition contractor is brought into the project planning process, the more opportunity there is to identify those efficiencies and risks before they become field problems,” she adds.

Adapting Under Pressure

Bringing specialty contractors earlier into the project planning process has helped many evolve under pressure and take on new roles that expand on what is traditionally expected, say Top 600 firms.

“Owners want specialty contractors to act like partners on risk, not just subcontractors,” Suntec President and CEO Derek Wright notes. “That means more responsibility for schedule certainty, quality documentation, environmental performance and safety outcomes.” The firm is ranked No. 51. The “bar is higher” for specialty contractors amid more complex project deliverables, he adds. “We think that’s good for contractors who invest in their people and systems,” Wright says.

“Today’s specialty contractor is expected to do far more than perform work in the field. ”


Zack Cherry, President and CEO, Cherry Coatings

Zack Cherry, president and CEO of No. 209-ranked Cherry Coatings, agrees, adding, “Today’s specialty contractor is expected to do far more than perform work in the field.”

He says that the specialty contracting role has evolved from trade specialist to business partner.

“Clients expect sophisticated project management, real-time communication, technology integration, workforce development, safety leadership, schedule certainty, cost transparency and strategic problem-solving,” says Cherry. “Contractors that will thrive over the next decade will be those that combine exceptional craft expertise with strong leadership, technology and operational excellence.”

Top 600 specialty contractors say higher expectations of project stakeholders have increased collaboration across the value chain, leading to elevated roles in design coordination, constructability, procurement, scheduling and risk.

“At the same time, more risk is being pushed down to specialty contractors,” says Coleman Jones, chief business development officer at Pioneer Cladding & Glazing Systems. ranked at No. 333.

“When schedules shift or designs change, trades can sometimes be left absorbing impacts that were outside of their control,” he says. “As a result, we have to be more detailed in how we define scope, schedule assumptions, and responsibilities.”

Bond Civil and Utility Construction Senior Vice President Daniel Foppiano says the No. 113-ranked firm finds that owners want a partner at all levels of the project process, with the data to support decisions along the way.

“As projects become larger, more complex and increasingly mission critical, the specialty contractor’s role is moving further upstream,” he notes. “The bar has moved from executing work to helping shape how the work gets delivered.”

“Customers are pushing more scope and more risk onto the specialty contractor … that used to sit primarily with the GC.”

J.D. Oldham, Chairman, Great Basin Industrial

With more opportunities connected to the data center boom, Standard Drywall, ranked No.168, Chief Financial Officer Alicyn Taylor explains that these have also challenged the firm to quickly scale operations and strengthen local and regional trade partnerships and customer relationships.

The trend “has reinforced the importance of investing in our people, advancing production, managing cash requirements and strengthening partnerships with organizations that understand what it takes to successfully deliver a data center project,” she says.

Everus Construction Group President and CEO Jeff Thiede says the No. 10-ranked specialty contractor’s strong customer relations have opened the doors to more opportunities to get involved as a project partner.

“[This] benefits the delivery process—from preconstruction through completion—while allowing our customers to secure the best value for their projects,” he points out.

At Helm Group, ranked No. 57, CEO Brian Helm says company professionals see virtual design and construction models being used for more than trade coordination.

“Models are a big part of our preconstruction process where the model provides cost certainty as designs evolve,” he says. “We finally have seen the benefits of the fourth, fifth and sixth dimensions of the model where cost, schedule, and energy calculations are built into every designed element.”

According to J.D. Oldham, president and chairman of Great Basin Industrial, “Customers are pushing more scope and more risk onto the specialty contractor—schedule ownership, interface coordination, documentation and qualification requirements that used to sit primarily with the GC.” He adds that for the No. 278-ranked firm, “Our answer is multicraft self-perform. When one contractor holds tank, structural, mechanical, piping and electrical, the coordination risk doesn’t get handed off at every seam, and EPC, GC and end-user customers have responded well to that.”

Supporting Success

Amid intensifying labor demands, Top 600 specialty contractors say they have also moved to better pinpoint where they could most use support to successfully deliver projects.

“Specialty contractors need the most support in coordination between trades, proper sequencing of the work and getting timely answers when changes or conflicts arise,” says Erik Santiago, president at KHS&S Contractors, ranked No. 311. Its project trade partners are extremely dependent on one another, he says.

“A specialty contractor can have the [workers] and materials ready to perform its work, but if the preceding work isn’t complete, an RFI isn’t answered promptly, or the trades aren’t properly coordinated, it becomes very difficult to maintain productivity and the overall schedule,” he says. “We have found that the best projects are the ones where the owner, design team, general contractor and specialty contractors communicate well, coordinate the work early and make decisions quickly. When that happens, it gives everyone the best opportunity to complete the project safely, on schedule and within the agreed-upon scope.”

ICOP Inc. President and CEO Guido Pellegrino adds that “earlier involvement and better information” are the two areas that would deliver the “greatest benefit” for specialty contracting firms. ICOP is ranked No. 316 on the Top 600 list.

“Geotechnical work depends on subsurface conditions, yet specialty contractors are often introduced late in the process,” he says. “More comprehensive site information and earlier collaboration among owners, designers, contractors and specialty partners can significantly reduce risk and improve outcomes.”

Ten years ago, “construction activities were the schedule critical path item,” says Karl Braun, vice president at No. 230-ranked Clark Bros. Inc. Yet in today’s market, procurement lead times play a key role in determining whether a project will hit its target energization date.

“The industry is experiencing tremendous demand for electrical infrastructure, and manufacturers are having a hard time keeping up,” he says. “There is also a push for domestic content requirements on certain products, which further stress supply chains.”

The way forward to address industry challenges is together, says Greg Ayres, president and COO of Nox Group, parent company of ranked-No. 96 electrical specialty contractor Corbins.

“Specialty contractors want it to be a partnership, not to have the way work needs to go or how people are to be treated be dictated to them,” he says. “We are looking at ways to work into our contracts that our customers feed our people proper meals when on site, have temperature controlled (and clean!) restrooms, and have all walkways paved so there’s minimal mud—just to name a few examples.”

He adds, “It’s not a one-size fits all, as all workers and regions are unique in what their motivational factors are.”

Such accommodations can generate big returns in the long run when it comes to establishing good communication among craftworkers and deepening relationships, executives from the Top 600 contractors emphasize.

“Our greatest success has been continuing to build the company for scale without losing sight of what customers value at the local level,” says Robby Speights, CEO of Nations Roof, which is ranked No. 92 on the list.

“We have continued investing in our people, in leadership development and in the operating infrastructure needed to support customers across markets while giving local teams the ability to respond quickly and maintain strong relationships,” he contends.

“Growth by itself is not the measure of success,” Speights points out. “The real test is whether you can grow while becoming more capable, more disciplined and easier for customers to work with.”

The continuing evolution of construction technology has given contractors access to much more information than ever before, says Jeff VanderLaan, CEO of Kent Cos., which ranks at No. 58. He emphasizes that “the next challenge is turning that information into better decisions.”