The Middleman Problem: Where Your Money Really Goes in NZ Trades
Why tradies lose 20-40% of every job to people who never lift a hammer
The Hard Truth
When you pay $1,000 for a plumber through an agency, only $600-$800 goes to the person actually doing the work. The rest? Phone pickers, admin staff, and shareholders who've never touched a pipe wrench.
The Numbers Don't Lie
New Zealand's trades industry is worth over $40 billion annually. Yet a significant portion of this money never reaches the skilled workers who actually do the jobs. Here's how the typical agency model breaks down:
Typical Job Cost Breakdown: $1,000 Plumbing Job
That means for every hour a skilled tradesperson works, they're effectively giving away 15-25 minutes of their labour to people who answered a phone call or clicked a button on a computer.
Who Are These Middlemen?
1. Recruitment Agencies
Traditional recruitment agencies charge 15-25% ongoing commission on every job. They argue they provide "vetting" and "quality assurance," but in reality, most simply match available workers to jobs through basic database searches. The same vetting a customer could do themselves with a few phone calls.
2. Lead Generation Platforms
Some platforms charge tradies $20-$100 per "lead" – just for a customer's phone number. No guarantee of work, no guarantee the customer is serious. Pay to even have a conversation.
3. "Booking" Services
Services that claim to "simplify" booking take 15-30% of every job. Their value proposition? A nicer website and a customer service line. That's a $150-$300 cut on a $1,000 job for answering a few questions.
4. Labour Hire Companies
In construction, labour hire companies often take 30-50% margins. A carpenter earning $35/hour might be billed out at $55-$65/hour. The difference goes to administration, "overhead," and profit – none of which involves actually building anything.
The Real Cost to New Zealand
For Workers
- • Lower take-home pay despite high hourly rates
- • No control over client relationships
- • Reputation belongs to agency, not them
- • Pressure to work faster, cut corners
- • Difficulty building independent business
For Customers
- • Pay premium prices for average service
- • No direct relationship with worker
- • Agency loyalty, not customer loyalty
- • Hidden fees and markups
- • Less accountability for quality
The macroeconomic impact is staggering. If we estimate that middlemen extract even 15% from the $40 billion NZ trades industry, that's $6 billion annually that could instead:
- Increase tradie wages and attract more people to the trades
- Lower costs for homeowners and businesses
- Be reinvested in tools, training, and business growth
- Stay in local communities rather than flowing to corporate headquarters
The NZ Housing Crisis Connection
New Zealand faces a well-documented housing crisis. Every unnecessary cost in construction and trades flows through to housing prices. When a builder loses 20% to an agency, that cost doesn't disappear – it gets added to the final price of homes.
Industry analysts estimate that agency and middleman costs add 5-10% to overall construction costs. On a $600,000 home, that's $30,000-$60,000 in middleman fees baked into the price.
This isn't just about fairness – it's about affordability for all New Zealanders.
Why Do Tradies Put Up With It?
Many skilled tradespeople feel trapped in this system:
- Time poverty: After a full day of physical work, who has energy for marketing and admin?
- Inconsistent work: Agencies promise steady jobs, even if the pay is lower
- No platform: Building an online presence and reputation takes time and skills many tradies lack
- Network effects: The biggest platforms have the most customers, creating a catch-22
- "That's just how it is": Acceptance of a broken system as the only option
The Direct Hiring Alternative
Technology has made it possible to connect customers directly with tradies without expensive middlemen. Platforms like FindYourWork are built on a simple principle: workers should keep what they earn, and customers should pay for actual work, not administrative overhead.
The Direct Hiring Difference
✓ Workers keep 100% of their quoted price
✓ Customers typically save 20-40% vs agency prices
✓ Direct communication means faster, better service
✓ Reviews and reputation belong to the worker
✓ Builds long-term customer-worker relationships
What You Can Do
If You're a Customer:
- Ask your tradie directly if they work independently or through an agency
- Consider the true cost of "convenience" – is a booking platform worth $200?
- Use direct-connection platforms that don't take commissions from workers
- Leave reviews for good workers so others can find them
- Build relationships with reliable tradies for future work
If You're a Tradie:
- Calculate how much you're actually losing to agencies annually
- Build your own reputation on commission-free platforms
- Ask satisfied customers for reviews and referrals
- Consider the long-term value of owning your client relationships
- Support platforms that support you – not exploit you
The Future of Work in NZ Trades
The gig economy has disrupted many industries, often to the detriment of workers. But it doesn't have to be that way. Direct hiring platforms prove that technology can empower workers rather than extract from them.
Every dollar that stays with the worker who earned it is a dollar that strengthens our communities, our trade industries, and our economy. The middleman era is ending – the question is whether you'll be part of the change.
Ready to Cut Out the Middleman?
Whether you're a tradie looking to keep 100% of your earnings, or a customer wanting to pay fair prices for quality work, FindYourWork connects you directly.