When Shreesha Ramdas first started building tech companies in the early 2000s, he didn’t expect his path would lead him to one of the oldest industries in America: construction.

A seasoned entrepreneur and investor, Ramdas has had multiple successful exits to large corporations including SAP and Medallia. And with his latest company, Lumber, he is betting that with the right technology — and a new generation of workers — construction’s persistent labor crisis can be solved.

Backed by over $22.5 million in venture capital from Foundation Capital, Carbide Ventures, Arc180 VC, 8VC, FirstHand VC, Sure Ventures, and Converge Ventures, Lumber is tackling a sector that generates $2.1 trillion annually in the U.S. but is lagging in innovation.

“This is one industry where technology has not made a big impact yet,” Ramdas says. But the unique complexities necessitate intervention. The project-driven nature of construction work, frequent worker turnover, heavy regulations, union rules and the volume of credentialing for the craftsmen, are just a few reasons why labor management is challenging.

The construction industry is facing a convergence of several challenges: a labor shortage, an aging workforce, tightening immigration policies, declining productivity, and heightened demand from reshoring and housing crises.

“In researching this industry, I spoke to about 200 construction companies… and kept hearing one thing, which was: we don’t have enough workers. And it’s very tough to retain workers,” Ramdas says.

Demographics are a key driver. Over 20% of construction workers are over 55, according to Census data, implying that a substantial portion of the workforce would retire in the near future. Ramdas shared, “41% of the workers are going to retire in the next 6 years… and for every five retiring, you’re getting one apprentice with a couple of years of experience.” Furthermore, compared to the workforce in all industries, construction has a relatively smaller share of younger workers. The chart below shows that, as of 2021, only about 10% of construction workers were 16-24 years old, less than the employment share of this age group in all industries.

Another major constraint: immigration crackdowns. Undocumented immigrants make up between about 15 to 23% of the workforce in construction, according to research by The Pew Research Center, Center for American Progress, and the American Immigration Council. And the industry is feeling the effects of immigration restrictions and stricter policy environments. The escalation in ICE arrests is having a chilling effect on labor throughout the migrant community, according to Jim Tobin, President of the National Association of Home Builders.

Even when workers do enter the industry, inefficiencies abound. Time is lost to credentialing errors, training gaps, and manual payroll processes. Most tradespeople juggle 20 to 30 credentials — from OSHA certifications to state licenses and union cards. When any lapse, projects stall.

Meanwhile, construction productivity has stagnated. Unlike agriculture and manufacturing, which have seen 10-15x productivity growth since the 1950s, construction remains flat. In fact, according to McKinsey, U.S. construction productivity is lower than it was in 1968.

Despite labor constraints, the demand for construction work is climbing.

The U.S. is in an affordable housing crisis. According to a March 2025 report from Brookings, the intensity of housing production has declined substantially over the last half century, from 4% annual growth per year in the 1950s to 0.64% in the 2010s. The report elaborates, “Twenty years ago [we were seeing] high rates of housing production in Sunbelt markets (Atlanta, Dallas, Miami and Phoenix) and extremely low rates of housing production in America’s large coastal markets (e.g., Boston, New York City, Los Angeles and San Francisco).” But after 1998 and especially after 2010, the Sunbelt housing production slowed to match those levels on the coast.

In addition to the rising physical costs of materials in construction, Tobin explains, “It's harder to find construction labor, period. And then, when there's a lack of labor, costs go up, it takes longer to complete a home and that just increases the cost of the finished product.”

Simultaneously, the reshoring of manufacturing — bringing production back to U.S. soil — is creating a spike in demand. Companies are constructing U.S. manufacturing facilities at a higher rate than any other property type, and most acutely across the following industries: electrical equipment, appliances, and components; computer and electronic products; chemicals; transportation equipment; and medical equipment and supplies. Such spending rose to an annual rate of $114.7 billion in 2022, according to the U.S. Census Bureau — a 40% increase year over year and a 62% increase over the past five years.

Moreover, the Infrastructure Investment and Jobs Act of 2021, the Inflation Reduction Act of 2022, and the CHIPS and Science Act of 22, which authorized $1.2 trillion over five years, including $550  billion in new infrastructure funding, have fueled 60,000 projects across the country, including transportation infrastructure (roads, bridges, public transit, airports, and ports), water and energy infrastructure and broadband internet. Many of those projects are already delayed and without a coordinated workforce strategy, may not be realized.

The question remains, can Gen Z workers step-in to fill all of this bubbling construction demand? Is the digitally native generation willing to trade-in their laptops for hard hats?

Historically, “only 3% of younger workers have been interested in construction,” Ramdas says. But the cultural zeitgeist is shifting for young folks - both men and women.

Enrollment in vocational training programs is surging as overall enrollment in community colleges and four-year institutions has fallen, rising 16% in 2023. National Student Clearinghouse data also shows a 23% surge in students studying construction trades in 2023 compared to the year before, and a 7% increase in HVAC and vehicle maintenance and repair programs.

According to the WSJ, Gen Z is the “toolbelt generation,” citing debt-free education, hands-on work, and job security as top reasons. Skilled construction workers now earn an average of $30/hour nationally, with higher rates in urban markets and for specialized trades. Many reach six-figure earnings without ever stepping foot on a college campus.

The rise of AI is also a contributing factor. In a survey of high school and college-age people conducted by software firm Jobber, reported by the WSJ, the majority of respondents said they thought blue-collar jobs offered better job security than white-collar ones, given the growth of AI.

Anthropic’s CEO Dario Amodei didn’t mince words when discussing the dire impact of AI on future job opportunities with Axios: “AI could wipe out half of all entry-level white-collar jobs — and spike unemployment to 10-20% in the next one to five years.”

“Given how AI is moving, there will be more appreciation for people doing work with their hands,” Ramdas adds. “Construction will need more labor than other industries, no matter how much automation comes.”

Ramdas explained how Lumber streamlines back-office and field operations at scale, with its AI-powered workforce management tools.

In addition, Lumber recently acquired BuilderFax, a digital credential management platform for construction craft workers, and through this partnership, the company can now track specialized credentials in a digital wallet.

In the field, workers can clock-in via facial recognition and geo-fencing, while back-office teams manage multi-rate, multi-state payroll, union rules, and certified reporting. One user on Reddit wrote: “We barely need an hour weekly to clear payroll now. Used to spend hours chasing down time cards.”

Time tracking view inside Lumber app Courtesy of Lumber

When it comes to Gen Z, and bringing a new generation of workers into the industry, Ramdas believes interactive training is key. The company’s multilingual learning management system delivers custom safety and compliance courses, simulations, and AI-guided modules to onboard workers faster. Ramdas further elaborated, Lumber is developing an AI companion bot that captures “tribal knowledge” from experienced workers — using wearable tech to document tasks and train new hires with real-world data. The goal: to preserve institutional knowledge and reduce ramp time for apprentices. “We have electricians with smart glasses and crews wearing hard hat cameras. Our AI is learning how great workers operate,” Ramdas says. “That lets us turn experience into structured training.”

Lumber also wants to bring more mental health support into its platform in future product releases, given the high rates of depression and suicide in the industry.

As blue-collar work sheds its poor image, and technology makes trades work “smarter” and more safe, a new image of the American worker may be emerging.

“The stigma has been that you go into the trades if you have no other options,” said Shelly Bell, VP of workforce development at Tallahassee Community College. “But now we’re seeing it as a strategic, proud career path.”

Firms are going all out, “really rolling out the red carpet” to attract and retain talent including PTO benefits, Ramdas says. So for Gen Z, blue-collar work in fields like construction could become the new greenback grind - as long as there is growth potential and job security. And for companies like Lumber, it’s also a data-rich, AI-enabled, opportunity to rebuild the backbone of America’s economy.

This lumber app seems like a sham. Using AI to train new employees about the trades doesn’t seem logical and thus guy raised almost $25M to develop this application. But the construction industry does have a problem with an aging workforce. When I read this it confirms my thoughts that construction is not going to get any cheaper any time soon. AI and robots are way too expensive to be economically viable and the growth numbers reported with Gen Z are abysmal. Plus 1,000 people per year die on construction sites meaning construction still has a long way to go for being a safe option for the masses.