Most contractors have had to sub out work from time to time, and they can be a godsend when you get really busy, or when a job calls for some expertise that’s outside of your area of specialization. Even if they’re not your employees, they’re still an extension of your business. That means you’ll have to manage them effectively to make sure things go smoothly with your team and the end customer. Here are some tips to help you successfully manage your subcontractors so you can keep your clients happy and your bottom line healthy.
Do Your Research
Make sure to research each of your subcontractors before you hire them. It’s important to invest most of your time and money into finding the right subcontractors. Find out how long they’ve been in business, ask for references from previous clients and other contractors. If possible, check out their past work to get an idea of what to expect from them.
Sometimes you’ll end up establishing relationships with subcontractors by meeting them on the job. For example, if you’re working on an office building, your client may have already hired an electrician to install a lighting system. Take advantage of these meetings and make sure to get the contact information of contractors who do good work so you can reach out to them if you have a need for a subcontractor with their skills in the future.
Make Sure Everyone’s Insured
When working with a subcontractor it’s important that you require proof of general liability and workers’ compensation insurance before letting them start work on any projects. If a subcontractor isn’t insured and causes damage to a client’s home, you’ll be liable for the costs. Make sure you keep your subcontractors’ proof of insurance in your files based on job because usually you are audited by your carrier for workers’ compensation each year. If you don’t have subcontractor proof of insurance, you will be charged additional fees.
Define Clear Instructions
The contractor/subcontractor relationship can get complicated if they don’t understand your instructions. Before beginning work on the next project, make sure your subcontractor understands what’s expected of them. If your subcontractor doesn’t perform up to your client’s standards, it’s possible that you didn’t effectively communicate with them. Get everything down in writing so you’re both on the same page from the beginning of the project.
Don’t assume that subcontractor will know what to do because of their previous experience. Clearly assign responsibilities if you’re working with more than one subcontractor. Every project is different so it’s essential that you explain the project in detail and have the roles and responsibilities documented in writing. Proper instructions and clear communication are critical for having a successful project when working with subcontractors.
Establish Clear Roles
Your clients don’t understand that your subcontractors work independently. They just assume they’re working under you like your employees. If that subcontractor does something wrong, it reflects poorly on you and your business. But if they do something right, your client will want more work from them in the future and could remove you from the deal.
Establish clear boundaries and roles with how subcontractors interact with your customers. For example, you can let them know that you only want your subcontractors to communicate with your customer when you’re on the job site as well. It’s up to you to set clear roles, issue orders, and manage the relationship with your end customer. Defining your subcontractors’ role up front makes things easier for both of you.
Subcontractors aren’t going to work for free. They’re motivated by money just like the rest of us. It’s important to pay them as soon as a project is completed. This can turn into an awkward situation especially if your client is slow to pay on time.
Outline a compensation fee that includes all contingencies and possibilities, especially in the case that a client doesn’t pay on time. It’s important to pay each of your subcontractors a percentage of the project by a specified date, such as 30 to 60 days into the project. You should always pay your subcontractors, regardless of whether the client has paid you or not. You don’t want to burn a bridge with a good subcontractor, plus if word gets around that you don’t pay on time it will make it harder to get other subcontractors to work for you in the future.
Know Their Schedule
Some subcontractors work for one company while others work for multiple businesses. Your project may not be the only one that they have on their schedule. If your project has a demanding deadline, make sure that each of your subcontractors can meet those demands within the allotted time. Avoid scheduling conflicts by getting to know their schedule so you can reduce conflicts with your project.
Hold weekly meetings with your subcontractors so they can get to know your management style. During these meetings, you can address any scheduling issues, answer questions, and resolve problems. This is also a great time to discuss any upcoming projects where you might need your subcontractors so you can get on their schedule before they line up another job.
Pay Attention to Them
When you hire a subcontractor to work on a job for the first time, get them familiarized with the plan and project. Regardless of their references or the past work you’ve seen from them, it’s your job to pay attention to them and keep an eye on them as they perform their work for the very first time. Until you’ve established an ongoing relationship with a subcontractor, you’ll want to keep close tabs on them to make sure they’re following your orders and doing quality work. If you follow these tips, over time you’ll be able to build an established list of trusted contractors and both you and your subcontractors will benefit.