Contractor Tiers, where do I start?
Before we delve into the different tiers, let me explain the importance of contractor tiers.
Contractors / Builders are trusted by stakeholders to produce reliable, fit-for-purpose buildings and residences that are free from material problems. These stakeholders range from builders to bankers to government agencies, as well as landowners, homeowners, investors, developers, and subcontractors who carry out work under their direction. Each stakeholder relies on the builder with whom they have a contract or from whom they buy a property. These stakeholders benefit from better transparency and an awareness of a builder’s capacity, expertise, and (to a lesser extent) financial status if there were a well-defined, managed tier structure that could be implemented consistently. A tiered system allows parties involved in contracts or purchases to make an informed decision.
What tier is right for me?
Depending on your experience and or qualification, particularly if you are at a junior level it is important to understand some of the key differences, as this can have a lasting impact on the direction of your career.
Now we have that out of the way let’s talk you through the various tiers so you can be better informed of where you would like to be.
As you may have expected Tier 1 builders are the largest builders, they are very likely to have an international presence with annual turnover in excess of $1b. They will have 350+ employees and work across all sectors (residential, commercial, industrial, infrastructure & mining)
Working for an international builder might sound exciting and it can open doors, however with more than 350 employees, more often than not you will find yourself involved only in one trade package at a time. If it is exposure to the entire process from structure to finish you are after this might not be the tier for you
Tier 2 may also work on international projects. They will have a lesser turnover of somewhere between $250m – $1b. Their headcount will be less, ranging from 150-350 and will also work cross-sector however, will generally have less exposure to mining and infrastructure.
With tier 2 the cons are similar and again you may find yourself stuck on the one trade package for an entire project. Again if you are in search of additional exposure you may not find it here either.
You are unlikely to find an international presence here. With a turnover ranging from $50-$250m. As you go down the tiers you will be working with less employees. Typically there will be 50-150 employees within a Tier 3 builder. Generally they will only work across residential, commercial and industrial projects.
As you move into a tier 3 builder you should start to see more opportunities for yourself to gain experience, as you will be exposed to more of the process from start to finish, allowing you to be more hands on.
This is generally regarded as the smallest tier with 15-50 employees. They will have turnover ranging from $10-$50m and usually only work on residential projects. With projects here being much smaller in scale you will typically get the best all round exposure across all areas of the project as you will get called on for support in different areas at different times. If you are looking to boost your experience and your career this is the option for you.
It is worth mentioning that any builder with less than 15 employees would be regarded as tier 5, this will again be much smaller on scale but come with the same benefits as tier 4.
Picking your tier.
Only you can decide what is best for you. You need to weigh up your current experience and abilities and decide where you believe you will be challenged most and get the development you deserve.
If you would like to talk it through and understand the different project types then contact Martyn Aitken. He will be more than happy to give his recommendation on suitable projects for you.
Like what you’ve read?
Subscribe to our blog by adding your email address to the form on the right. You’ll be the first to hear about our updates.