Over-Resourcing: How Good Intentions Erode Subcontractor Margins
For subcontractors, wages are the single biggest controllable cost. On most projects, they account for 50–70% of total expenditure. Get them right, and your job runs lean and profitable. Get them wrong, and your margin disappears overnight.
The truth is this: most wage blowouts aren’t caused on site, they’re caused at tender. If you don’t build the right labour model and supervision structure into your estimate, you’ll spend the entire job chasing margin that’s already gone.
The “More men means faster” Myth
Many subcontractors fall into the trap of thinking:
“If we put more men on, we’ll finish faster. The client will be impressed and give us more work.”
In reality, it rarely plays out that way:
Output doesn’t double. Extra men create congestion and downtime. You might only gain 20-30% more productivity.
Costs double. Wages rise instantly, and they’re your biggest expense.
Clients aren’t impressed. Instead of seeing extra effort, they think you padded your tender or lost control of your job.
The result? You burn wages, achieve only slightly more progress, and weaken your credibility in negotiations.
Practical Example
An estimate allows for a four-man crew, working 2 shifts of eight hours - 64 man-hours total.
However, the subcontractor increases the crew to six men, hoping to finish faster.
The job doesn’t finish in less time. Productivity increases slightly, but nowhere near enough to offset the extra wages.
Labour cost increases from 64 to 96 man-hours.
The margin is reduced.
Instead of looking efficient, the subcontractor looks inflated and uncommercial. Worse still, the client may assume your estimate was padded or that you lack resource discipline.
This kind of decision should never be made in the field. The right crew size and structure should have been determined before the tender was submitted.
When Escalation is Necessary - and When It’s Not
It’s important to separate justified resourcing from avoidable over-resourcing, and this analysis must happen during estimating, not once boots are on the ground.
When the Estimate Is Light
If the estimator under-allowed labour, the project is on the back foot before it starts. You’ll either need to add men (and kill margin) or renegotiate scope.
The smarter move is to stress-test your labour assumptions before the bid goes in.
When Site Conditions Demand It
Late possession, sequencing issues, or client delays may force acceleration.
There has been an increase in the scope that can be covered by Variations.
If this wasn’t considered in your risk allowances at tender, you’ll end up paying for it out of margin.
When Site Staff Push Too Hard
A frequent mistake is site staff adding men without analysis - “just to get ahead.”
This is almost always a sign of poor planning at estimating stage. If the project had been modelled correctly from the start, the site wouldn’t be chasing its tail.
The Role of Supervision and Management
Wage control doesn’t just depend on how many men you have, it also depends on who’s leading them. The level of supervision must be chosen before tender submission, not improvised mid-project.
Working Supervisor: Works for small crews, where leadership and labour contribution go hand-in-hand. But if the job is larger or multi-fronted, estimating for a working supervisor will leave you under-resourced.
Site Supervisor: Necessary when coordination, logistics, and safety demand full-time oversight. If you don’t allow for this in the estimate, it becomes an unrecoverable overhead.
Site Engineer / Project Engineer: Essential for complex or technical works, where documentation, QA, and client reporting are non-negotiable. These are high-cost roles, if you haven’t priced them in before tender, they eat straight into profit.
Every escalation carries cost. If it’s anticipated and priced into the tender, it forms part of your commercial strategy. If it’s added after the fact, it’s a margin killer.
Why Wages Management is Critical
Every extra man-hour reduces profit. Doubling resources without doubling output destroys margin.
Idle time is invisible without records. Men waiting on access or sequencing are still paid. Without diaries and timesheets, wasted wages slip by unnoticed.
Data beats gut feel. Adding men “to get ahead” is almost always a losing play unless backed by hard productivity data.
Margins live or die at estimating. Wage models, supervision levels, and escalation triggers should all be decided before the bid goes in, not when the project is underway.
How PillarPoint Helps
PillarPoint supports subcontractors by helping them get wages and supervision right before the tender is submitted.
Labour modelling at estimating stage: Stress-testing crew sizes against productivity benchmarks.
Supervision planning: Determining when a working supervisor will suffice, and when a dedicated supervisor, engineer, or project engineer is necessary.
Independent analysis of recoverability: Identifying when additional labour can be claimed, and when it’s a margin drain.
Outsourced staff: Giving subcontractors access to supervisors and engineers on demand, without fixed payroll overheads.
With PillarPoint, subcontractors can bid confidently, knowing their wage costs are realistic and their resourcing strategy won’t collapse their margin once work starts.
Final Thoughts
Over-resourcing often comes from good intentions, a belief that more men, more hours, or more management will impress the client and accelerate delivery. In reality, it usually erodes margin, damages credibility, and sets dangerous expectations.
The subcontractors who succeed are those who:
Build realistic labour and supervision models into their estimates, AND THEN STICK TO THEM.
Escalate roles only when justified, and only if priced.
Use records and analysis to keep labour aligned with assumptions.
At PillarPoint, we give subcontractors the tools, people, and commercial support to manage wages with precision. The result: tenders that protect your bottom line and projects that deliver margin, not just turnover.
