The decision whether to use union or non-union contractors should be addressed at the beginning of the process as it impacts the firms the you invite to make proposals. It’s not common to have union and non-union contractors propose on the same project. People and organizations can have different ideas on the union/non-union issue. There can be a personal or institutional preference or even demand for unions. Your staff may be union members. On the other hand others may not feel that way and may argue that it’s fiscally irresponsible to use more expensive union contractors. These positions can be firmly held and hotly debated, at times, potentially fracturing your team.
How much more do union contractors cost? It’s hard to evaluate the union/non-union dilemma, except on a case by case basis. Here are some of the factors involved
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- Wages, benefits and working conditions are definitely more costly with union contractors but that difference varies. It is a challenge to quantify that into a definitive cost difference.
- When there is a high demand for labor, this difference narrows. Non-union firms have to bid up wages, sometimes close to union rates, to attract workers.
- Your organization or your lender may demand union contractors. On one of my projects, the lender was a union life insurance company. Every single worker on the project had to be union.
- In some areas, like the center of big cities, it’s hard for non-union contractors to work.
- There is a tendency for union contractors and subcontractors to be more highly skilled, mitigating the higher cost in a way that is almost impossible to quantify.
- Some general contractors employ union carpenters and laborers and use both union and non-union subcontractors for other trades, which can provide a useful compromise.
- Where the work of some trades is very complex or the scale of the project is large, there may not be non-union subcontractors who can do the work.
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