Construction Manager vs. General Contractor: Which Is Best for Your Project?

Keeping your major home remodel or new build on track involves juggling multiple stakeholders, including draftspeople, architects, structural engineers, and subcontractors. When you don’t have the skills or time to manage a large project yourself, a construction manager or general contractor will pull all the elements together to help you achieve your dream design on time and within budget.

This guide breaks down the differences between oft-confused construction managers and general contractors to help you decide who to hire for your home renovations.

What Are the Differences Between Construction Managers vs. General Contractors?

Construction managers act as the coordinating cornerstone of major renovation projects, consulting with the homeowner and supervising other stakeholders from the design and planning phase to the end of the build. General contractors come in after the design is approved to offer more hands-on management of the day-to-day activities of the project's construction phase.

Depending on the project's scope, a construction manager's and general contractor's roles and responsibilities can overlap. However, if you hire a construction manager for the project, the general contractor will usually report to them rather than directly to you.

Construction Managers vs. General Contractors: Roles & Responsibilities

Think of the construction manager as your collaborative, coordinating project partner, helping you to understand how to renovate a home smoothly, safely, on time, and within budget. They will help you determine design goals and work alongside stakeholders such as architects and draftspeople.

You may hire a construction manager near you and a general contractor for large projects, such as building a new home. In these instances, the general contractor often reports directly to the construction manager. When no general contractor is involved, you might rely on the construction manager to help with hiring subcontractors, such as electricians and plumbers.

Hire a general contractor near you to provide on-the-ground support during the project’s construction phase. They will work within a specific budget and timeline to purchase materials, manage subcontractors, and comply with local building code standards. While they are responsible for day-to-day on-site management, if there are any major decisions to make or problems to address, they will consult with the construction manager or homeowner before progressing.

Construction Managers vs. General Contractors: Timing

Construction managers come on board earlier than general contractors, during the early design planning months. They help formulate budgets, timelines, and required stakeholders. You’ll continue to work with them until the build is complete, inspections are done, and final payments have been made.

When working with a construction manager and a general contractor, the general contractor won’t usually get involved until the project's construction phase begins. However, hiring them earlier makes sense if you don’t have a construction manager on board. While they might not get involved in design decisions, consulting with a contractor at this stage helps better inform your budgets, timelines, and permit processes. They can also book required subcontractors in advance to avoid unnecessary hold-ups.

Construction Managers vs. General Contractors: Location

Unlike a general contractor, your construction manager won’t be on site every day supervising subcontractors and overseeing operations. Instead, construction managers monitor budgets, timelines, and overall progress from an office base. They only visit the site periodically and are the buffer between you and the general contractor.

Construction Managers vs. General Contractors: Cost

Construction manager fees typically fall between 5% and 15% of the total project cost—the higher percentage range is often reserved for smaller renovations. However, they can go up to 20% if they handle more day-to-day on-site management if no general contractor is on board. General contractor costs, on the other hand, are between 10% and 20% of the total project cost, or they charge a per-day rate between $300 and $500.

Construction Managers vs. General Contractors: Financial Risk

Be aware that construction managers have less financial risk when taking on your home renovation project than general contractors. In most cases, a general contractor receives a predetermined fee based on the percentage of the proposed project and as part of a bidding process. It’s in their best interest to not let the project go over budget when they choose a team, materials, and design details. If the cost of a home renovation or new construction goes over budget and stays within the scope of the original design, the general contractor will absorb the difference. Selecting a pro with a solid reputation reduces the risk of a bad contractor cutting corners to increase their profit margins.

Construction managers also work on a set fee but are not as affected by changes in the project's cost. They provide general oversight of the design and build and help homeowners hire and manage contractors who cover the day-to-day details. While they can advise you on how not to go over cost, they are not responsible for these changes.

Construction Managers vs. General Contractors: Qualifications

Construction managers don’t always need a license but should have solid industry experience and qualifications. However, you’ll want to work with a licensed professional if they need to approve building code work. Many construction managers have degrees in civil engineering or construction management. 

Alongside extensive industry experience, general contractors require a license to operate. Pick a bonded and insured contractor to provide you with liability and financial protection.