With any new commercial construction project, it is important to have the right project manager and consider hiring in-house vs outsourced teams. Budgeting, scheduling, reporting and monitoring scope are all important facets that need to be properly managed. While many different job roles overlap these responsibilities, it is the role of the project manager whether in-house or outsourced, is to ensure they are done in a timely manner. With a demanding schedule or during labor shortages it can be challenging to assign or hire the right person for the job. Every commercial real estate organization has to make their own decision whether to hire in-house staff for project management or to outsource the responsibility.
When evaluating whether to use in-house vs outsourced project management teams, there are two main items to consider – priorities and expenses.
Priorities and Goals
When considering hiring a project manager, you need to evaluate whether this will help make projects successful. Examine the priorities of your existing staff and see if there is enough support for an additional manager. How many projects do you have in queue and is this a short-term or a long-term need? In addition, how quickly do you need this project to be completed? Multiple projects that need to be expedited often require additional personnel to ensure completion on time.
Ability to Increase Expenses
Anytime you add staff it can be a significant expense. Weighing the productivity needs of the business versus cost controls can certainly be a balancing act for any construction company. If your company is in expansion mode, then it can be a simple decision to hire an in-house project manager. But if you are cutting back or watching your expenses, then it would make more sense to outsource on a limited term basis. With outsourced managers you can control the costs more precisely and use the resource on an as-needed basis.
Before determining whether to proceed with outsourcing a project manager, the benefits and disadvantages should be weighed as well.
Benefits of Using an Outsourced Project Manger
The biggest benefit of hiring an outside project manager is that you receive experience on-demand. Contract project managers have worked with numerous clients and have learned best practices that can be applied to future projects. Another major benefit is objectivity. A contracted project manager is removed from office politics and existing relationships and can provide focus and direction without any pre-existing bias or preference. They are able to provide objective and transparent advice to all shareholders in order to drive the project forward. As mentioned earlier, hiring on a contract basis allows you to control costs much easier than with employees.
Disadvantages of Using an Outsourced Project Manager
Some companies have distinct cultures which can make it difficult for outside people to be effective. Employees can be resistant to coordinate with the project manager making it more difficult to keep operations moving smoothly. Another potential disadvantage of hiring an outside project manager is over dependency on them. The vendor may provide so much value, that the company is unable to replace them and end up paying more for their services over time.
Other Considerations
In some cases, the owner will act as the project manager or will designate one of their own staff. Ideally they will have some experience in construction management, but they may lack direct building experience. In these instances, the main issue will be to coordinate with this type of project manager and understanding the type of support they need.
