By Nathan | Posted on
If it "takes a village to raise a child", then it apparently takes several different companies to build a home. A recent study conducted by the National Association Of Home Builders indicates that many of the workers bustling around a residential worksite are subcontractors.
Subcontractors aren't exactly a new phenomenon at construction sites. Professional subcontractors have existed as a distinct professional entity since at least the 1920s and have lent their services traditionally in areas like painting, carpentry, and plumbing. But the NAHB report indicates that general contracting firms are relying on these specialists more than ever. Polled firms indicated that they employed as many as 22 different subcontractors over the course of a residential project. Subcontractor use increased for firms with many residential building projects. Firms who had 25 or more residential startups said that almost 90% of the workers employed at those sites were subcontractor employees.
Subcontractor hiring was probably at its highest at the height of the real estate boom in the earlier part of this century. And while overall subcontractor use has slipped somewhat since then, the percentage employed on residential sites has remained fairly consistent, staying at or just under 80%.
The reasons for all this subcontractor use? There are several. One is the resurgence in new home building after an extended dry spell. The second would be the need to fill the dearth of qualified general construction workers that has been plaguing the industry since the Great Recession. And the third is the demand for the specialized skills that subcontractors bring to residential construction projects.
The NAHB report indicated that contractors most frequently bring subcontractors aboard to do mechanical work like installing HVAC systems, and flooring projects such as carpet installation. Less common subcontractor assignments included door and window and exterior siding installation. While general contractors once had in-house electrical departments and routinely handled roofing work, these assignments are now often handled by subcontractors as well.
Subcontractors have now become such a presence on residential sites that some industry experts speculate that they could be doing as much as 95% of the home building, with general contractors largely functioning as project managers. Since subcontractors are increasingly hiring subcontractors to help on projects, hiring firms must be increasingly diligent. These firms are reminded that they are ultimately responsible for the behavior, practices, and welfare of all workers on a site. They therefore need to pay attention to the reputation, actual results, and needs of any subcontractor firm that they hire in addition to the prices charged.