Causes of Cost Overruns due to Outsourced Labour – Subcontractor’s Perspectives

Project cost overrun is a significant concern in construction. Statistics reveal that more than 80% of construction projects have not been completed on agreed time or budget due to numerous factors. In the context of the UK construction industry, the subcontractor led approaches are highly encouraged to absorb their expertise and knowledge into the field, which will help projects to complete on time, cost and quality. However, most of the subcontractors are highly reliant on outsourced/external labour. Literature acknowledges the conflicts between main and sub-contractor as one of significant causes for cost overruns and further explains these are mainly due to the issues of sub contractor’s labour. However there is limited research on the impacts of outsourced labour in subcontractor’s cost overruns. Therefore, this research aims to bridge this gap by identifying the causes of cost overruns due to external labour. Apart from the literature review, the data was collected from a case study of a drywall subcontractor. As part of the case study, six construction professionals of the selected subcontractor were interviewed and thematic analysis was adopted to analyse the data. The results revealed; high wastage, poor workmanship and frequent rework, low productivity, issues with buildability and dayworks as the main causes for cost overruns due to outsourced labour. Moreover, subcontractors are averse to enforce strong performance measures on the outsourced labour due to the fear of low retention.