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By Nic De Bonis
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Construction is one of the most labor-intensive industries in the economy, but one of the least digitized. The hours, costs and paperwork that decide whether a job makes money still move from the field to the office by text messages, phone calls and spreadsheets, and much of the AI being sold to contractors today does nothing to change that.
Contractors don't care about AI; they care whether their payroll was right last week. Over the next few years, the AI that matters will not be the kind that replaces people, but the kind that solves problems that was never possible before, either because the cost was too high or because no person could realistically do the work.
Labor accounts for 30 percent to 50 percent of total construction project spend, according to the Construction Industry Institute. Yet nearly four in 10 contractors still log those hours on paper time sheets. The most expensive line item on the job is tracked with the least reliable method available.
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The pressure on labor is only growing. The CBIZ 2026 National Construction Industry Survey found that labor shortages and rising wages are the top concern for 32 percent of contractors. The Associated Builders and Contractors estimates the industry is missing an estimated 349,000 workers, a deficit projected to reach 456,000 by 2027.
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Payroll Efficiency
I grew up in a family of tradespeople, and years before I started building software for the construction industry, my sister and I ran a small staffing business for contractors. That experience showed me how much of the back office’s time goes into piecing together hours that were never properly recorded in the first place. In the years since, I have watched the same scene play out, contractor after contractor.
It’s Friday afternoon. A worker texts his hours to the office. The payroll administrator reads the texts, reenters them into a spreadsheet, checks the rate against the cost code, and sends it to payroll. By the time the invoice goes out, the numbers have passed through three hands and two systems, and nobody is certain they are correct.
The construction industry has heard a great deal about AI, and much of what it has been offered adds work instead of removing it: a chatbot to ask, a dashboard to check, another login for a superintendent who already has too many. The most valuable work AI can do in construction is not the work people already do. It is the work no contractor could afford to pay for today, or that would take so much labor that no one has ever seriously attempted it.
Consider what it takes to get a crew’s hours exactly right. Checking every clock-in against where each worker actually was, catching the worker who clocked in from the road and the one who forgot to clock out, splitting each day across the right jobs and cost codes, and confirming that every break was taken when the law requires.
Doing that by hand for a large crew is close to impossible, so most contractors settle for good enough, overpaying for hours that were never worked, spending days each pay period cleaning up the rest and paying fines when their break records don’t hold up. An AI agent can do all of it, for every worker on every shift, as the day unfolds.
Accurate Hours
The difference shows up quickly for the payroll team. When crew hours and locations are captured automatically GPS-verified, nobody has to chase texts or reenter spreadsheets, and the hours are accurate because they were recorded at the source rather than reconstructed from memory at the end of the week.
The payroll admin is not replaced, they simply start the week with numbers they can trust and spend their time on work that needs a person rather than on decoding a stack of texts.
The same records also protect the business. For example, in states with strict break rules, a log of when each worker actually took a break can defend a contractor against a wage claim that paper time sheets would have lost.
The value reaches well beyond payroll. Labor is one of the largest costs a contractor can actively influence during a project. When tracked in real time, an owner can see a job running over budget while there is still time to act, rather than discovering the overrun at month-end when the only option left is to absorb it.
Contractors who come out ahead over the next five years will be the ones who judge AI by the hours it saves, the errors it catches and the margins it protects, rather than by the promises of the hype cycle.
The question for construction is not whether AI will replace the people in the field or in the back office, but what it can do alongside them to deliver meaningful value to the business that was never possible before.
Nic De Bonis is the co-founder and CEO of Workyard, a construction operations platform whose AI agents handle the work between the job site and the office. The views expressed in this article are the author's own.
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