Hire vs. subcontract: when to bring field work in-house

Should you hire a tech or subcontract the work?

Hire when the work is steady and core to your business; subcontract when it's spiky or outside your lane. That's the whole framework, and most owners get in trouble by ignoring one half of it — either carrying payroll through slow seasons for work a sub could absorb, or feeding their best margin and their customer relationships to subcontractors doing work that clearly justifies a full-time seat. The honest test is utilization: if you could keep a tech busy 30-plus hours a week in that trade, every month, the seat pays for itself and then some. If you can't, the sub is the right call and there's no shame in it.

This is a business-model decision before it's a hiring decision, so let's take it apart properly.

What each option actually costs

The hourly comparison is misleading in both directions.

A subcontractor's rate looks expensive next to a tech's wage. The BLS May 2025 medians put HVAC techs at $61,010 a year, plumbers at $63,800, and electricians at $63,190 — and a sub billing you hourly will typically run well above the wage equivalent. But the wage is not the employee's cost. Add payroll taxes, insurance, benefits, a stocked truck, tools, training time, and the cost of the hire itself — SHRM's average is about $4,700 per hire — plus the roughly 56 days it takes to fill a skilled-trades seat while the work waits. We've broken down the real cost to hire an HVAC tech elsewhere; it's more than the ad spend.

The employee's advantage is that all of that cost is fixed, so every additional booked hour makes him cheaper. The sub's advantage is that his cost disappears the moment the work does. Which is why the deciding variable isn't the rate — it's utilization. An employee at full utilization beats the sub on cost comfortably. An employee at half utilization is the most expensive labor you can buy.

What you give up when you sub

Cost is the visible half of the tradeoff. The invisible half is bigger:

• The customer relationship. In service work, the tech at the door is your brand. A sub's tech in a different shirt, doing work to a different standard, is building his reputation on your customer list — or damaging yours. For one-off installs this matters less. For maintenance agreements and repeat service, it's the whole game.
• Quality control. You can inspect a sub's work; you can't train it. An employee gets better on your dime and stays better. A sub's crew changes without asking you.
• Scheduling priority. When the July heat wave hits, your sub's other customers are calling him too. Your employees answer to your dispatch board. Subs answer to whoever pays best that week — and during peaks, everyone is paying.
• Compounding capability. Every hour an employee works, your shop gets slightly better at the trade — process, tribal knowledge, a bench of people who can train the next hire. Subcontracted hours build that asset for someone else's company.

None of this means subs are bad. It means subs are a tool for work you've decided not to own.

When subcontracting is clearly right

• Demand you can't smooth. If a trade only fills a truck four months a year, a full-time seat means either winter layoffs or paying techs to wash trucks. Subs turn a seasonal spike into a variable cost.
• A trade outside your license or core. The HVAC shop that occasionally needs an electrician for a panel upgrade should not hire an electrician. Sub it, mark it up modestly, keep the customer.
• Testing a new service line. Thinking about adding drain cleaning or standby generators? Run it through subs for two quarters. Real demand data beats a projection, and if the line fizzles you haven't hired anyone into a dead end.
• Overflow above a healthy base. The best-run shops staff employees to roughly their reliable base load and keep two or three trusted subs for the peaks. That keeps utilization high on payroll without turning away peak-season revenue.

When hiring is clearly right

• The utilization math already works. If you're consistently buying 30-plus hours a week of subcontracted labor in one trade, you're paying a premium for a full-time tech without getting a full-time tech. Run the quarterly numbers; the answer is usually obvious in the invoices.
• The work touches recurring customers. Maintenance agreements, service memberships, anything where the same homeowner sees your company twice a year — put your own people on it. Retention lives in that relationship, and so does the review pipeline.
• You're growing on purpose. Subs cap out. You can't promote a sub to lead tech, can't build a training pipeline out of subs, and can't staff the second location with someone else's crew. If the five-year plan involves more trucks, the bench has to be yours.
• Margin is getting squeezed. The sub's markup is margin you're donating. At steady volume, bringing the work in-house is often the single largest margin lever available to a mature shop.

One warning on the middle path: the answer to "hire or sub?" is never "hire them but call them a 1099." Worker classification is a legal test about control and independence, not a label you pick to save on payroll taxes — if you set the schedule, supply the truck, and the person works mostly for you, that's an employee. We've covered the W-2 vs. 1099 rules for field techs in detail; read it before you sign anyone as a contractor.

The hidden constraint: hiring speed

Here's the part of the decision most owners miss. The hire-vs-sub choice isn't made in a vacuum — it's made against your actual ability to hire. If filling a seat takes you two-plus months of scrambling, subbing starts to look attractive for work that should clearly be in-house, purely because the hiring process is painful. That's letting a fixable weakness make a strategic decision for you.

The fix is to make hiring fast and cheap enough that the real tradeoffs — utilization, brand, margin — decide the question. That means a standing pipeline of pre-screened techs so an open seat is a phone call instead of a search, and a clear picture of what actually predicts success in a field tech so the confirmation is quick. It also means knowing your options for running the search itself — we've compared recruiters, staffing agencies, and doing it in-house if the seat is open right now. Note that staffing-agency temp labor is really a third lane here: employee-style control at sub-style pricing, useful for bridging, expensive as a permanent answer.

Run the numbers, then commit

The practical process: pull last quarter's subcontractor invoices, sort by trade, and convert dollars to hours. Any trade sitting at full-time-equivalent volume for two straight quarters is a hire you're already paying for — start the pipeline now, hire deliberately, and keep the best sub on speed dial for overflow. Any trade below half-time utilization is a seat you should not create, no matter how annoying the sub's scheduling is.

And notice what makes the whole decision easier: a bench. When hiring is a two-month emergency, every staffing question gets distorted by dread. When you keep a warm list of pre-screened techs — which is the heart of how we think about recruiting at HireAligned, as a year-round sales function rather than a fire drill — you get to make the hire-vs-sub call on the merits, and change your mind cheaply when the business changes. If you want that bench built and maintained without adding it to your own plate, that's what we do.