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So alongside my house they are building a building so they had to do some excavation and left a deep (hole?). Im not sure if hole is the correct term and right now they are people there so i wasn’t sure if saying “oh look there’s people in the hole” is correct

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As you indicated, I would call it an excavation:

  1. a hole or hollow made by excavating.

So maybe:

Look, there are some people in the excavation.

Informally, you could also call it a "hole in the ground".

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A hole is fine, though without context it could be man-made or otherwise. So for clarity, I would simply add that it is a "hole for a building foundation".

Excavation would also be good as @user3169 mentions, though the first thing that comes to mind is a archeological dig, as in digging into the ground to uncover or reveal, which isn't quite the case here. Still, it makes it clear that it is a man-made hole.

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