It’s undeniable that COVID-19 has had a significant impact on the global construction industry. General Contractors have had to shut down projects and create new safety measures to protect their workforce. Though the future is optimistic for contractors, many firms are wondering what’s in store for the year ahead.
What about subcontractors?
The disruption brought about by the pandemic has understandably had a significant impact on the labor available to subcontractors. An increase in labor shortage for subcontractors has the potential to significantly impact the progress of projects. Subcontractor labor is often staggered throughout the project lifecycle as one task helps to inform the next. Any delays from subcontractor work can have a direct impact on project and resource schedules, as well as the overall quality of work.
Because of the disruption to labor availability and an increasingly competitive subcontractor market, many general contractors are scaling their self-perform teams to handle key construction activities. For more trends that will be influencing construction in 2021, read this article.
In this article we’ll dive into some of the pros and cons of being a self-performing general contractor.
The Pros of being a self-performing contractor
Being a self-performing general contractor means you have greater control over the work that’s being done, project schedules, and your firm’s flexibility when changes are needed. Most importantly, you have more control over the quality of the work on site. You have high standards for your projects and using your own team helps to ensure those company standards are met consistently.
Safety is always a top priority. Your self-perform teams will have a better understanding of your organization’s safety guidelines and you will likely have crews that have worked together on multiple projects. That understanding and familiarity with one another allows your team to enforce and maintain safety standards on the jobsite better than an external subcontractor team.
Whether you’re using subcontractors or doing self-perform work, it’s your company reputation on the line. By taking on more tasks and project phases internally, you’re better equipped to respond to clients faster and more clearly. You also have a better understanding of materials needed, vendor options, and costs. Making recommendations that are in your client’s best interest allows you to add continued value to the relationship straight through to project completion and beyond.
Being a self-performing general contractor allows you to lower costs through the entire project lifecycle. Having a clear understanding of the work that needs to be done and the labor required to complete it allows for more accurate budget information. You’re also able to create a more efficient resource strategy. If work falls behind schedule, you’ll have the full support from your organization to re-strategize your project resources to keep progress moving forward.
On top of that, you’re able to streamline planning by eliminating the subcontractor selection and onboarding process – saving money and time.
Everyone is trying to make a buck. You have your margins, subcontractors have their margins, and clients aren’t necessarily looking to break the bank for their project. Self-performing some (or all) of the activities involved in your project allows you to cut out the middleman and provide your clients with a more competitive project budget.
The Cons of being a self-performing contractor
Location can be a limiting factor
There aren’t many negatives to doing self-perform, but location can play an important role when it comes to cost. Depending on the location of the project, you may need to consider using subcontractors. The travel time and cost for your self-perform teams alone may have a significant impact on your profit performance in the long run.
Depending on the systems you have in place to manage resources, adding your self-perform team can add to the complexity of the planning process. Managing project resources requires weekly, sometimes monthly updates, whereas self-performing contractors are dealing with labor requests on a daily basis.
Keeping your self-perform team informed of schedule updates on a daily basis can also be tedious if there aren’t efficient communication channels in place. For more information about resource management, check out our ultimate guide.
Construction resource management tools, like Bridgit Bench, can help to consolidate project and field operations and streamline labor requests and project assignments for your self-perform teams. You’re also provided with a holistic view of your entire workforce strategy. Superintendents can make requests right from jobsite with the Bridgit Bench mobile app, and specify the required skills and experience. From there, Bridgit Bench will filter your self-perform team and let you know who the best fit is.