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Construction: Subcontract or Direct Hire?

Subcontracting work or hiring permanent employees in the trades was the topic discussion this week among several different construction owners and professionals. More often than not, employers tend to prefer subbing out, is that the smarter thing to do?

The skilled trades industry has changed throughout the 20th and 21st century, particularly the demand labour and workforce. As Canada witnessed an influx of immigration from many European countries, there was an increase in available workforce for skilled/unskilled labour in the construction industry. As generations have passed, the skilled trades industry has not appealed to everyone and instead sought out different opportunities. This results in a high demand for a particular trade and can prove to be difficult to attain such an individual. Unions also played an important role in history as it romanticized the trades worker and also assisted with safety concerns on the job site. 

Although the unions have played a role in Canadian history, there is a group of thought that unions have created their own enemy- whereby they are overpaid and in such cases they are perceived to be less flexible and more costly. In addition, they have their own rules and mission they stand by - which may not agree with employers. Such factors can impact a business and its profitability. 

On the other hand, subcontracting may appeal to employers as it may be the more efficient method to attain labour. One must remember that there has been and increase in the types of skilled labour that exist today. Such positions may require specific certifications necessary to accomplish such jobs. In addition, such workers may have their own insurance, which will also reduce some cost to employers. Flexibility and turnover among employer and employee is also evident. Employers may be able to eliminate poor performers sooner and attain better skills. In addition, employers can hire based on demand of labour. Overall, the construction industry is high paced and requires a specific labour force -- One that is flexible, reliable and affordable.