PurposeArchitecture, engineering and construction (AEC) industry is one of the vast industries with a lot of productivity issues within. Teams as an integral part of the industry face many problems, of which social loafing is considered as a barrier. This research deals with a few barriers that contribute to social loafing leading to productivity challenges in the AEC industry. There are three major barriers identified as contributors to social loafing which also induces productivity challenges in the industry, from the literature study: cultural diversity, task invisibility and distributive justice.Design/methodology/approachThe study adopted the quantitative questionnaire survey method approach, for which the respondents were selected globally through snowball sampling and a total of 443 responses were gathered. Different analysis approaches like the correlation coefficient, and structural equation modeling (SEM), were taken to analyze the survey data.FindingsThe SEM results showed that mediation factor, social loafing, is directly related to AEC productivity challenges and acts as a mediation for barriers like cultural diversity and task invisibility. Distributive justice was not found to have a direct relationship with AEC productivity challenges or even through social loafing.Originality/valueThis study could be beneficial for the CEOs, general managers and directors as they can use this study to encourage an employee friendly environment. Also, industry experts like engineers, architects, project managers can access this study to further improve the organizational culture and instill better employee values.