For the high-end, custom and spec homebuilder…there is a sweet-spot compromise between maintaining a mix of economical subcontractors plus in-house, self-perform tradespeople…as opposed to manning the jobsites with the optimum number of workers in order to complete each house on schedule.
I once worked for a homebuilder who maintained on the payroll over 50 people in seven different building trade specialties…plumbing, electrical, finish carpentry, painting, concrete flatwork, audio/video, and general labor…plus independent subcontractors in the other trades such as framing, drywall, HVAC, roofing, and flooring, for example.
The idea here…to self-perform some of the work…was to economize on labor costs, eliminate some profit and overhead that would otherwise go to subcontractors, maintain continuity of ways of doing the work and quality of workmanship, and exercise direct control over the self-perform crews in terms of scheduling and timely customer service repairs.
On the surface, these are in theory all excellent reasons to build and maintain a large self-perform workforce…but in practical application it is very difficult to keep self-perform crews busy for a 40-hour a week paycheck…and at the same time keep all of the jobsites manned at the optimum rate to complete the construction on time…within the tight constraints of a fixed and rigid numbers of detached houses being built at one time.
The duration lengths of time and the move-ons and move-offs for each building trade differ radically over the course of the construction of any house…but is especially complex for high-end luxury houses…spec or custom.
The only way to keep everyone busy yet also fully manned on every jobsite would be to have tradespeople who are capable of working in two or three or even four different specialty trades…which is not realistic.
The result of not being able to fully man each jobsite every day using mostly self-perform work crews…because of their specialization and the differing time durations needed for each construction activity…produces a result that some jobsites will sit empty for several days or more waiting for the needed crew to finish on another of the homebuilder’s houses a few streets away.
What seemed economical at the front-end of building the homebuilding company may not be so economical if construction loan interest costs for not completing houses on time…or dissatisfied customers must wait for their house to be completed two or three months late…as a result of the practice of the impossibility of fully manning every jobsite using predominantly self-perform crews that are inadequate to successfully fill the daily jigsaw puzzle of pieces needed.