Should I Use Subcontractors?

The debate between using subcontractors or in-house employees in the construction industry is one that has been ongoing for years. Many people have different opinions on the matter, but in reality, the decision to use either option depends on several factors. In a video by Brad with Home of Construction, he answers the question of whether it is better to use subcontractors or in-house employees when doing remodeling or construction work. He explains that the answer is “it depends” and gives examples of why.

Brad explains that the scope of the project, the project’s size, and the construction company’s management style are crucial factors that determine whether to use in-house employees or subcontractors. For example, a contracting company like Templar contracting runs a completely subcontractor-based operation, while Home of Construction uses both in-house employees and subcontractors. Brad notes that one of the main benefits of using subcontractors is that the customer’s investment is protected since the subcontractor is on the hook for getting the job done and getting it done to their standards before they get their money.

On the other hand, Brad points out that a benefit of using in-house employees is that the scheduling and delivery can be faster in many cases. With subcontractors, it can be challenging to sync their schedules, leading to gaps in the project’s progress. This is because subcontractors are running their own businesses, and they have to fit in your contractor as a customer, just like all their other customers. In contrast, contracting companies that use in-house employees can control the timeline to a large extent, and this is a significant advantage, especially if time is of the essence.

Another advantage of using a contracting company with in-house employees is that there tends to be more supervision and ownership up and down the chain of command in performing the job. This creates a sense of ownership all the way down to the lowest level. Brad notes that subcontractors may take less ownership of what they’re doing on your job because, at the end of the day, they’re running a business. Thus, they may not have the time or resources to ensure that your project is completed to the highest possible standard.

However, there are cons to using in-house employees, and one of them is that they may have less autonomy compared to subcontractors. Brad notes that if a contractor fails to pay their subcontractors, the subcontractor could put a lien on your home. With W-2 employee situations, this is not possible. Also, since subcontractors run their own businesses, they have their own insurance, which reduces your exposure to liability.

Another con to using in-house employees is that it can be expensive, especially for smaller contracting companies. Brad notes that while a bigger company with more employees can reduce the costs of the project, smaller companies may struggle to maintain the salaries and benefits of their employees. In contrast, subcontractors are not part of the company’s payroll, and this reduces the contractor’s expenses.

In conclusion, the decision to use subcontractors or in-house employees when doing remodeling or construction work depends on several factors. Brad notes that the scope of the project, the project’s size, and the construction company’s management style are crucial in determining whether to use in-house employees or subcontractors. While subcontractors are on the hook for getting the job done and getting it done to their standards before they get paid, in-house employees have more ownership and can control the project’s timeline. The decision ultimately depends on the customer’s preference, budget, and timeline.