Last edited 28 Oct 2020

Builder vs contractor

Traditionally, a contractor has been considered to be an organisation that co-ordinates the resources necessary to undertake construction works, including contracting a number of trades required to carry out the actual works. This use of contracted trades allows them to vary the workforce on projects depending on the nature, scale and location of the works required without having to employ, or lay off direct employees.

A builder on the other hand, directly employs workers that undertake all of the roles necessary to undertake construction works, they do not have to contract trades. Typically this has been associated with domestic construction, as housebuilding is a relatively repetitive process, for which the workforce required is predictable and so direct employment of the workforce does not limit the builders capability.

However, this distinction has become blurred since the 1960’s, when builders 'de-risked' labour problems by sub-contracting more and more work. As a result, most builders will now contract some construction work to trades.

Similarly some contractors may have an element of direct workforce. Civil Engineering Procedure, 7th edition, published by the Institution of Civil Engineers defines a 'general contractor' as '...a contractor who undertakes the whole of the construction of a project, but usually in turn sub-letting parts of his work to specialist or trades contractors and others as sub-contractors'.

Today, housebuilding is generally associated with ‘builders’ even where they contract other trades, whilst other types of building may be associated with ‘contractors’, even where they a significant direct workforce.