One of the common methods of mitigating risk in construction is to transfer that risk to a party that is better suited to handle it, also known in construction as hiring a subcontractor. In this video, learn how subcontracting may shift some risks to the hired party, but there are also inherent risks. Look at these risks and methods to mitigate them while continuing to evaluate risk vs. reward.
- Part of the reason that we hire trade contractors … is to transfer risk to a more capable party. … Now, sure, I could self-perform … all the electrical work, for example, … in a building project, … and if I did it really well, I could save money, … because I would get to keep the markup … being added by an electrical subcontractor. … However, think about the risk involved … and the things that could go wrong. … I would have to hire a supervisor that knew the work … and skilled labor to perform the work. … But what happens if I can't find these people? … And how much risk is there … in bringing on a new supervisor … and hoping that they can manage the work efficiently? … Also, this is a typical construction project, … which means that there are going to be periods of time … where there is no work for these electricians. … Since I don't have anywhere else for them to go, … will they quit? … Will they be available when I need them again, … or will I have to go hire new ones all over again? …
- Defining risk
- Identifying the role of the construction manager
- Analyzing risk
- Controlling risk
- Managing challenges: scope, safety, communication, and more