Author: Nicholas Cross*, LLB (Flinders University), MBA (University of Adelaide)
Subcontractors deliver most of Australia’s construction work, yet they remain excluded from early decisions, burdened with risk, and undervalued in project delivery.
Subcontractors deliver most of Australia’s construction work, yet they remain excluded from early decisions, burdened with risk, and undervalued in project delivery. New research from the University of Adelaide reveals that the industry’s biggest opportunities for improvement don’t rely on new technology or legislation, they depend on trust, fairness, and how people choose to work together.
The Australian construction industry is facing a productivity plateau, a looming workforce shortage of 229,000 workers by 2027, and disputes costing the economy over $7 billion annually. Beneath these headlines lies a quieter, cultural issue, the breakdown of relationships between principal contractors and the subcontractors who carry out more than 85 per cent of on-site work.
Rather than strategic partners, subcontractors are often treated as commercial shock absorbers, engaged too late, handed incomplete documentation, and expected to assume risk without input. One subcontractor put it simply, “We’re given half the information and all the risk.”
What the Research Shows
As part of my MBA research project, I interviewed senior industry professionals, managing directors, project managers, asset managers, and subcontractors, across South Australia’s commercial construction and facilities sectors. Seven themes consistently emerged as the key determinants of sustainable relationships and project success.
- Trust is earned through behaviour, not contracts.
Trust was universally described as the most valuable currency on a project. Not as a legal clause, but as “turning up when you say you will, being honest about problems, and not hiding behind emails.”
- Risk without input creates resentment.
Subcontractors are frequently asked to price, deliver, and absorb risk based on design documents they had no part in developing. The result: inflated contingencies, defensive behaviour, and adversarial contract administration before the job even starts.
- Poor documentation = poor relationships.
Incomplete or conflicting drawings, especially in government projects, erode confidence and cooperation. Subcontractors warned that “we spend the first three weeks fixing paper instead of building the job.”
- Fairness drives discretionary effort.
When variation claims are treated fairly, payments are timely, and communication is respectful, subcontractors go above and beyond. “If we’re treated fairly, we’ll push hard to get it done. If not, we protect ourselves next time.”
- Communication is the real project manager.
Problems escalate not because they exist, but because they are ignored. Clear, early dialogue was seen as more impactful than any formal dispute mechanism.
- Government policy is not reaching site level.
While the SA Code of Practice promotes fair payment and early engagement, participants observed that enforcement is minimal, resulting in cynicism rather than behavioural change.
- Shared values mean more than shared contracts.
Subcontractors choose to return to contractors whose teams show integrity, accountability, and respect, even when margins are lower. Culture, not cost, determined loyalty.
What Needs to Change
The research identified four clear and achievable actions the industry can implement immediately:
- Subcontractors must be engaged earlier in the project lifecycle. Rather than being brought in after designs are finalised and tenders are issued, trades should be involved during planning and design development. Their insights prevent costly design issues and improve delivery certainty. Where pre-construction advice is sought, subcontractors should be compensated for their contribution.
- Subcontractor risk must be aligned with decision-making authority. Subcontractors should not be forced to absorb risks stemming from design decisions they did not make. A fairer approach involves staged procurement or collaborative contract models where risk is shared based on who can best manage it.
- The industry needs to return to using Australian Standard contracts in their intended form. Excessive amendments and one-sided clauses erode trust and introduce unnecessary legal complexity. Standard contracts provide a known, balanced framework that supports transparency and reduces disputes.
- Policy must be enforced, not merely written. Frameworks such as the South Australian Code of Practice promote fairness and ethical contracting, but without independent audits, public reporting, and consequences for repeat breaches, they remain largely aspirational. Enforcement is essential to rebuild credibility and trust.
This is not about being ‘nice to subcontractors’. It is about reducing risk, improving program certainty, attracting new talent, and cutting down on rework and disputes. Better contracts do not build better buildings…better relationships do.
The Future is Relational
With a looming shortage of 229,000 construction workers by 2027, the industry must become a place people want to stay , not somewhere they are to ‘survive’. If principals and subcontractors can shift from transactional behaviour to shared purpose, the gains will be immediate: less rework, fewer disputes, stronger retention, and higher-quality outcomes.
*Nicholas Cross is a legal and compliance specialist in South Australia’s construction and facilities sector, where he oversees compliance, risk governance, and integrated management systems at NSG Boffa. His MBA research journey focused on one of the industry’s most pressing yet under-examined challenges, the breakdown of principal-subcontractor relationships. His work explores how trust, fairness, communication, and cultural alignment directly influence project performance, workforce retention, and long-term commercial success.
