Forum Discussion
Subcontractors vs Direct Labor
Would you consider hiring subcontractors instead of hiring direct labor when talent is hard to find in your local market? My business has had a lot of success partnering with other companies to compl...
for the past 5 years we had relied heavily on subcontractors. Not all SC are bad, matter of fact some can be very good. We managed to have a small group of outside labor that we would use and it worked out pretty well. at the time maybe 5-10% was in-house labor. Fast forward to 2024 I had a goal of 80/20 in-house/SC, and it turned into a disaster. Although our profits were way up, the work load became too much and that added profit quickly dissolved because we couldn't handle as many jobs in a work week. We realized that a 40/60 split was much more manageable. To keep QC we reduced our SC pool to a select few who provide the best service and "don't just show up". We found this to be a sweet spot. It allows to keep work going with our SC crews and while we continue to build our in-house crew. Our goal for 2025 is to flip it to a 60/40.
This is brilliant, I love it. I want to do the same thing based on the workload at a later date but start off with in-house and eventually have some work we contract out if it makes sense.
