Hire You Own Crews or Hire Subcontractors?

There is always the question that you need to decide whether you should subcontract the work out or hire your own crews. This can be a dilemma and the decision will need to be made by the general contractor sooner than later. I have done both and I see there are pros and cons to consider.

So let’s talk about the reasons you should not subcontract your work out for your construction projects. The subcontractors have control of your project schedule, the quality of work and the material used. These are difficult areas to control when you subcontract out the work, you can try to control them when you are bidding out the projects but ultimately the subcontractor will control these items once the subcontract agreement has been signed. If a subcontractor is busy he may take an extra week or two to complete the project or longer as he knows you cannot fire him too easily and he has the ability to lien the property if you don’t work with his schedule. If there is even a very small change the subcontractor will charge an extra work order for the small change. You need to verify insurance, license and quality of work for the subcontractor before you hire him. So when you subcontract work on your project realize that you are giving up some control of your project to the subcontractor which can affect the project timing.

Now let’s talk about the reasons you should subcontract work on your project. One of the most important is the payroll, you have a payroll when you hire employees and this doesn’t stop if your crew does not have work to do, a subcontractor is only paid if he has work to do on one of your projects. There is no workers compensation insurance or payroll taxes due when you subcontract out the work. The subcontractor’s quality of work is much better because he specializes in the trade that you are subcontracting out to them. If your project is rather large you can subcontract out to a subcontractor who has many employees and special tools to be able to get the project done much quicker than you can with your own crews. Also since you are subcontracting the work out if there is a delay in the job due to weather, inability to access materials, or higher cost of labor, this cost will fall upon the subcontractor as he has usually agreed to a set price for the project.

These are the pro can cons of subcontracting the work out, I have found a happy medium with a combination of my own employees and subcontractors. Being a General contractor I have two framing crews who handle my framing work and also my finish work and punch list and the rest of the trades are subcontracted out to licensed subcontractors who I have confirmed their quality of work and their schedules.