A price war is raging amongst construction contractors, at the expense of everyone

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The construction industry is uniquely seen as a place where cheaper often means better.

Quotes for tenders aren’t looked into with as much depth as they possibly could, and there tends to be a race to the bottom amongst contractors’ pricing in the slightest hopes that they win work.

In an exploration of this burden on construction workers, Hayley Roberts of Cube Lighting & Design explains how her LED lighting company is often picked as the premium choice chosen only after the cheaper contractor fails to deliver, what this means for the wider industry as a whole, and what can be done to stop this from continuing.

Its a fact in any industry with independent traders that there will always be someone out there willing to undercut the competition to win work”, Roberts says. “Its happened to the best of us, you need the work so charging a little less to get your foot in the door seems like a tempting offer.”

According to price checking websites, the average hourly rate of electrical labour is around £30, whilst the call-out fee itself should be somewhere along the lines of £55 – many independent traders are selling themselves way under these rates in a bid to win work.

Despite this temptation, Roberts believes that charging less than what is needed for the job will only put the trader and the customer out of pocket eventually.

“The fact is, when were called out on a job whether were the primary choice or were cleaning up after someone else, we know that people are paying us for our experience and our growing list of certifications and accreditations.”

On the Cube Lighting and Design website, Roberts explains how fixed pricing on work could provide a better standard for subcontractors across the board as well as encourage strong relationships between them.

“It’s worth working with other companies and actually becoming a subcontractor to your competitors instead of undercutting their costs”, Roberts says.

She also believes that if customers check various traders on verified websites and make sure their quotes are presented appropriately and professionally, this will help them screen those who are likelier more reliable.  

According to the Federation of Master Builders, signs of builder reliability include clear and frequent communication, punctuality, minimising of noise and disruption, and proof of appropriate training such as an CSCS card issued by the Construction Skills Certification Scheme.

Roberts added, “It comes down to customer confidence in the contractor. These smaller things are what their quote is worth. They’ve understood where they’ve priced themselves in the market and they understand what they’re good at.

“There will always be room for cheap labour. There will always be someone who for one reason or another will choose the cheaper option, but as long as they come to know why that worker was cheaper in the first place, then maybe that isn’t an entirely bad thing.”

There is some evidence that subcontractor earnings were actually on the up in 2019, by as much as 7% - or three times above the annual rate of inflation. 

Unfortunately, this is marred by some subcontractors creating a lose-lose situation by selling themselves short. Not only do they miss out on potentially more earnings, but it decreases the value and reputation of the industry as a whole by underselling and creating subpar work for customers.

To read more from Hayley, find her at Cube Lighting & Design

Since 2015, Cube have been supplying and installing LED lighting across a variety of sectors, schools, corporate offices and power stations. The Cube team have a vast amount of combined knowledge of the lighting industry and have access to a huge variety of LED products to suit your requirements.

Cube take a value engineering approach to all of our LED lighting projects no matter how big or small – if we have ideas or products that can reduce your outlay, we will take you through these options in order for you to make an informed choice