Hiring a Construction Manager: What to Consider?

Kevin Mire, Partner, 39Forward

Procurement of a Construction Manager (CM) for a project is one of the most critical processes within a project. Construction costs can account for up to 70% of the costs in a project pro forma; therefore, the decision should not be taken lightly. Many variables should be considered, such as expertise, team, workload, and, of course, cost.

Expertise is essential as it will directly impact schedule, cost, and quality. A CM with expertise in a project type can execute the project more efficiently than others who do not because they understand the complexities and will have the foresight to plan for them before they affect schedule and cost.

How well will the team work together?

Team is frequently ignored but extremely important, if not the most critical, variable to consider. The team and their experience will directly affect the project positively or negatively. The overall cost of the construction manager is only 8-10% of the construction cost; the other 90% is subcontracted work which the construction manager manages. The right team is essential to ensure the subcontracted work is handled well, leading to better bottom-line results.

Workload (of a CM) is vital to evaluate during the procurement process. While larger projects will have dedicated staff from the CM, smaller projects typically do not. Large or small projects should have dedicated staff, but not all projects can justify that return on investment. Understanding the workload of non-dedicated staff is essential to ensure our project gets the right attention.

Budget for resources?

Cost (of a CM) is an important variable to consider in the procurement process. Remember, though, that the CM’s cost is only 8-10% of the construction cost, with the other 90% being subcontracted work. Most CMs should have similar costs, if there is a variation between CMs, it is likely in their staff costs. It is extremely important to evaluate staff costs to ensure the project is getting the right staff to manage it. The variation in CM cost typically is within the subcontracted costs. Evaluating the subcontractors to ensure the CM recommends the most qualified subcontractor, not just the ‘cheapest’ subcontractor, is also extremely important. More often than not, the most qualified subcontractor will lead to better schedule results, quality, and cost at completion. Don’t be fooled by the proposed cost, as that could vary significantly from the cost at the completion of the variables described above, which are not fully vetted.

Expertise, team dynamics, workload, and cost will significantly impact your project, but there are additional factors to consider. During the initial discussions of your project, you will need to address your approach, safety measures, sustainable initiatives, and DEI (Diversity, Equity, and Inclusion) strategies. These elements are all important but will vary depending on your project's specific circumstances.