Relationships in the commercial construction industry are very important, especially between general contractors and subcontractors. In most cases, general contractors subcontract out work to qualified construction workers to more quickly and successfully complete tasks.
In turn, subcontractors rely on general contractors to provide them with work.
Subcontractors tend to specialize in specific areas, like equipment and furnishing. However, as a contractor, you will have to look at the bigger picture of your project to make sure that you are hiring the help you truly need.
Specifically, take time to understand things like the cost of doing business, financials, time invested in a project, profits and losses, and manage expectations on whether your customers are happy. Read on to understand more about the process.
7 Reasons why you should hire subcontractors
Being a general contractor is just like being a magician. You have to create complex three-dimensional buildings from two-dimensional drawings while managing other details – from ordering building materials from the best casework manufacturers and inspecting completed work, troubleshooting various problems to coordinating schedules and handling the paperwork.
Because of the various tasks you have to handle, you could benefit from hiring skilled subcontractors. The success and timeliness of your projects will heavily depend on them. Some of the reasons why you should hire subcontractors include:
1. Subcontractors can help you with your large projects
If your business consistently handles major projects, or if you are just about to take on a large project yourself, subcontractors can be a valuable resource. Finding skilled additional helping hands will allow you to take on new and large clientele.
What’s more, you will create a large and specialized team for every project.
2. Subcontractors provide expertise
In most cases, subcontractors can offer specialized services that your staff may not be able to provide. Subcontractors work in specific fields, and their years of experience gives them the opportunity to hone their skills.
Most importantly, they may have handled a similar task. This means they will complete your task quickly and efficiently.
3. It is cost efficient
When your commercial construction business needs more hands for a large project, hiring subcontractors is a more effective option than hiring full-time employees. Furthermore, it helps you to hire a safe and reliable firm. Such subcontractors know where and how to find cabinet manufacturers.
Subcontractors also don’t get benefits, equipment, or office space. Hiring subcontractors also relieves you of paying your employees’ salaries and paying their taxes.
According to Forbes, hiring skilled subcontractors is up to 30 percent more cost effective compared to hiring new employees.
4. Increased productivity
Hiring subcontractors can also increase productivity. Rather than assigning your employees simple and mundane tasks every day, you can outsource them to a third party.
Outsourcing your furnishing projects to skilled subcontractors will enable your employees to focus more on more important business. This will help in the quick completion of projects.
5. Subcontractors have specialized knowledge
There will likely come a time when your commercial construction business takes on a large project that will require the services of qualified subcontractors that also know how to find casework manufacturers.
Such subcontractors can add value to your client. Subcontracting is more preferable than hiring a full-time employee.
6. No long term commitments
Hiring subcontractors for your commercial construction project will give your business more flexibility than if you hired permanent employees. Rather than hiring employees for long term work, you can hire subcontractors to work on various projects–then you part ways.
However, when you find the right subcontractors, you might decide to offer them a more long-term position.
With permanent employees, ending your work relationship can be a bit more complex. Not to mention, it uses up your valuable time plus costs (severance, unemployment, etc.), and sometimes it can lead to legal disputes. You may be forced to pay someone’s salary, although you no longer need their services.
7. Fewer legal obligations
The law considers subcontractors as the owners and operators of their businesses. Therefore, they aren’t entitled to similar legal protections like employees.
This means that you will have fewer legal obligations to subcontractors than your employees. Additionally, you won’t have to send deductions and payroll taxes to the government.
As a commercial construction contractor, you have to be selective when hiring subcontractors. Imagine hiring a subcontractor to furnish your next project.
Upon checking their work, you discover that they have done a poor job, and the client won’t accept it. Such a contractor may try to defend their work, but your relationship may sour.
Eventually, you will lose your time and money as you will have to hire another person to clean up the mess. Other dangers and pitfalls of subcontracting include:
Sometimes subcontractors may abandon work or display other unprofessional behavior, and since they aren’t employees, you won’t have any means to discipline them. Additionally, firing a subcontractor may be considered a breach of contract, and in such a case, you may have to hire another subcontracting firm to complete the task.
When hiring a subcontractor, always remember that they represent the image of your business when working on your client’s property.
The construction industry is steadily growing, with projects becoming even more sophisticated. Therefore, it becomes difficult for subcontractors to stay on schedule.
However, most subcontracting firms have taken measures to combat this problem by using project management technology.
This technology allows subcontractors to save time as they work on your project by streamlining the day-to-day processes. Real-time data entry and streamlined communication have enabled subcontractors to achieve more with less.
Speed vs. quality
Most furnishing and equipment subcontractors are competent and highly efficient at their trade. But sometimes they may use cheaper materials or work faster while cutting corners, thus producing substandard work.
Avoid this by hiring reputable subcontractors that know how to find lab casework manufacturers. Discuss your quality concerns and specifications in your contract.
Skilled labor shortage
The skilled labor shortage continues to be a major problem as commercial construction project demands increase. This is a major concern among contractors.
Despite the use of construction technology, The U.S. has an ageing workforce, and the industry isn’t able to recruit skilled workers that can satisfy the rising demand.
The rising cost of raw materials
As a contractor, you bear the risk of changes in the cost of raw materials due to fixed price contracts. The cost of raw materials and land can change rapidly.
The rapid changes in price can affect your commercial construction business. However, you can partner with subcontractors who can locate commercial cabinet manufacturers near me.
In most cases, subcontractors tend to have a tunnel vision. This means they focus more on their work, and they won’t always see what is around them.
To solve or totally avoid this problem, always plan ahead. Discuss your project with your subcontractors at the job site.
Ensure that you communicate all requirements, including access to the work-site, cleanup, and protection of surfaces.
With furnishing subcontractors, always ask how they plan to assemble furniture. Inquire if they anticipate any problems and whether they will need to drill or cut any framing.
In case there is excessive notching contact your structural engineer or an experienced framer.
Not showing up on time
Subcontractors are not the best schedulers, and in case of any conflict, you won’t be on top of their list. Additionally, sometimes they may be handling another project when you need them.
To avoid such situations, inform them a week in advance of a project. Also, communicate to them in case of any schedule changes.
When you pay them promptly, they will be more likely to show up next time.
What to consider before hiring subcontractors
As a building owner, general contractor, or a construction manager, you are responsible for work handled by subcontractors. All your subcontractors should be experts in their specific niche and have enough certified professionals to complete the work.
Before you hire subcontractors, there are some things that you should consider, including:
Ask potential subcontractors about their existing safety plans. Go ahead and inspect their injury incident rate and Experience Modification Rate (EMR).
This is a number that insurance firms use to gauge the cost of injuries and their probable future risks. This means that a low EMR indicates lower work compensation premiums.
The industry average EMR is 1.0. Consider subcontractors that have strong safety practices and that have written safety policies.
You need subcontractors that have the proper equipment to use on the job. The right equipment will ensure that the job is done safely, correctly, and efficiently.
Subcontractors may not always own all equipment. They sometimes opt to lease.
Additionally, the subcontractors should have trained and certified employees that can operate the equipment.
Don’t choose only by price
While it’s important to compare estimates from different subcontractors, you shouldn’t necessarily choose the subcontractor with the lowest price. Subcontractors submit their estimates based on the specifications of your project.
Therefore, providing a clear description of your project, including the materials to be used and equipment needed to complete the project will enable the subcontractors to give you fair estimates.
As you compare their estimates, check their price differences. If you note a significant difference, ensure that they are bidding for the same scope of work.
All estimates won’t be priced equally, so if there is still a significant price difference, ask why. A subcontractor may have overlooked using a specialized material or didn’t understand the full scope of the project.
Such minor details may have a major impact on the final cost and quality of your project.
While you may be searching for a subcontractor to complete your current project, you will hopefully create a business relationship where they will help you handle many more projects. Therefore, don’t just choose a subcontractor who can fit your lifestyle. Instead, choose one that has a good reputation.
The ideal subcontractor should have a reputation for:
- Having been in the business for a long time
- Have qualified tradespeople. This will reduce your risk of delays, reworks, quality, and safety problems.
- Helping clients find affordable materials by having the right networks with the best lab casework manufacturers near me.
Where to find subcontractors
Finding subcontractors to handle your project isn’t rocket science, and you don’t need any special skills. In fact, you will follow the same process you used in finding your accountant or dentist.
To find subcontractors, start by:
The first and most obvious strategy is to ask your close friends and neighbors for references. You can also ask around your neighborhood if anyone knows of any subcontractors.
Ask your former schoolmates in the commercial construction industry
You may have even better luck by asking someone who knows the difference between average and exceptional services: that is, people you’ve gone to school with or have even worked with in the past. Today, you will discover that other contractors don’t give out the name of their best workers due to the high competition.
However, depending on how close you are, other people in the commercial construction industry may be willing to lend a hand.
Scout the surrounding area to find where other similar projects are currently in progress. Introduce yourself to those on the worksite and request their business cards.
This will also give you the opportunity to look at the work they have done. In case it’s not easy to see from the outside, you can request the owner to let you have a view of the work done.
Current or past subcontractors
You can ask subcontractors that you have worked with in the past, or those you are currently working with, for recommendations. However, put it in a way that it will seem like you are gathering information so that they don’t think you are skirting around to get work done.
To do this, give specifics about your project but don’t explain the nature of the entire project. Subcontractors that you have worked with in the past can offer you with go to recommendations.
Work with previous subcontractors
Since relationships are key in the construction industry, it is always advisable to work with a subcontractor that you have used in a previous project. Regular interactions create trust, which in turn makes obtaining future services very easy.
If you have finished looking for subcontractors, check online for sites like Craigslist as well as Angieslist. It may take a few days to get a good hire, but these online industrial websites are worth your time if you have a short deadline to complete your project.
Your material suppliers know and have worked with the best subcontractors. Chances are that some of them shop for materials at their stores. Ask the supplier if he knows the right subcontractors to help you complete your project.
How to find qualified subcontractors
Hiring the wrong subcontractors can create a lot of consequences; additionally, there is a lot that goes into hiring the right and qualified subcontractors. In many cases, the quality of the final project greatly depends on the heavy workmanship of the subcontractors. Therefore it is very important to hire a good subcontractor.
Tips to finding good and reliable subcontractors
Solicit bids from subcontractors
Lobby bids from your subcontractors. Make sure to give them a well-drawn plan and specifications of your work.
Take bids from various subcontractors and check them on an apple to apple basis. Additionally, make sure to review the bids and choose the best subcontractor for your project.
Don’t forget to ask for detailed payment terms. Do not hire subcontractors that ask for a large sum of money even before they start the project.
This might be a red flag. Instead, if the materials needed to be ordered, another option is to order them yourself.
Be selective when hiring
It is very important to get ahead of time to avoid a subpar subcontractor. Never rush to find subcontractors.
It is important that you consider the following questions before hiring one
- Do you both share the same goals?
- How ambitious are the subcontractors
- Are they reputable?
- Are they capable?
- Can they follow directions?
Screening subcontractors is an important part of the hiring process. Make sure that you ask them for the number of years they have been working, the number of projects they have completed and check their references.
Look at their upcoming projects and make sure that they are capable of meeting the demands of your job in the specific time frame given to them. Additionally, hire subcontractors that know how to find cabinet manufacturer to work with.
Define the range of work
Defining the scope of work is an important part of assessing the subcontractors. Give a clear, detailed scope of work to your subcontractors.
Additionally, have a set of requirements that are well set to check the subcontractor’s qualification. You must determine the size of the scope being contracted out as well as the resources that will be required to get the job done.
Upon the realization that the subcontractor’s scope is too wide, you have the liberty either to break the project into smaller components or analyze it to make sure that it is the right projects for your company. Speaking verbally to the subcontractor leads to some crucial information being left out since they can nod their heads and say that they can complete the project on time.
Therefore, it is important to get the scope of the project written down on paper to serve as a record. Always remember to talk about the proposal to work out any potential conflicts.
Complete pre-qualification evaluations
This is the process of assessing the subcontractor’s ability to complete your project. Some standards for evaluating subcontractors include:
- Technical skills
- Safety record
- Quality of work
- Proposed team member
- Execution plan
You want to hire a meticulously safe subcontractor; therefore, always ask for their safety information in the bid. For instance, ask if the subcontractors have been inspected by OSHA and ask for a copy of the inspection report.
Confirm that the subcontractor is licensed
Ask the subcontractor to share copies of all applicable licenses and confirm that they are licensed. You can do this by contacting your state licensing board or permitting agency.
Ask for proof of insurance
Subcontractors should be able to provide you with proof of insurance. Make sure that the coverage is enough.
A subcontractor should have the following insurance policies:
- general liability insurance
- Workers compensation insurance
Draft a subcontractor agreement
Use an appropriate contract that clearly defines the scope of work, the projects price, and the payment schedule. A contract should be signed before the project begins.
The contract should also include all the services and the materials the subcontractors will provide, warranties for the defective product of workmanship, as well as expectations like the removal of debris and cleanup.
You can have your lawyer draft the agreement or submit the agreement to him for review and evaluation before you sign. Also, it’s important to consult with your insurance provider to get advice on which clauses you can include in the contract.
Subcontractors can be useful in helping you complete your project on time. However, they can bring some risks on the site if they are poorly managed. Manage your subcontractors by:
The subcontractors should understand how they fit into the projects. It can be very hard to get subcontractors to show up to work on time.
The schedule should include due dates for deliveries and should show contractual and other milestones that will help you reach your goal within the specified timeframe.
The schedule highly depends on the size of the project. Bigger projects might include schedules that require a more extensively documented schedule on how critical parts of the projects will be done.
Make sure that all the subcontractors know how you want the work site to be run and the standard of quality needed.
Communicate often and early
Each subcontractor should be issued with a copy of the contract. Subcontractors should also communicate among themselves effectively; therefore, you should establish and include good communication channels.
Good communication between you and the subcontractors will lead to an organized project. Subs should have all the information they need before doing their jobs.
Make sure that they have access to all the information ahead of schedule and that the information is quickly updated whenever a change occurs.
Use construction management software
Construction Management Software is a tool that helps you manage subcontractors effectively. It aids in scheduling, keeping a paper trail of all the communications and enables you to see the subcontractors working on the project.
Subcontractors need to keep up with any changes in the project, always be approachable and be ready to listen to any suggestions and feedback they give. Give them clarifications on anything they inquire about and remember that you are all working as a team.
Some applications are integrated with accounting software to ease payment and invoicing tasks.
Show the subcontractors how to do your work
Do not assume that your subcontractor is ready for work immediately after you have signed the contract. You need to show them how you want them to work.
They should be oriented on how to handle clients who visit the work site. Therefore, you should teach your subcontractors on how to engage with the clients.
Hold regular meetings
To get the most out of your subcontractors, make sure you engage them in safety talks and workflow planning. Always keep everyone informed by holding meetings regularly.
Meetings will give you the chance to express any concerns on matters regarding the safety, quality of work, and other general project issues and possible disputes.
Follow the golden rule
Always treat others how you would like to be treated. Pay them how you would presumably want to be paid.
Sub-contractors like to be paid on time and to be treated like genuine members of the team; inspire them and make them feel engaged on the job site.
Get it in writing
Don’t be one of those contractors who begin working with subcontractors without a written contract in place. A contract protects both parties.
Work should begin when the contract has been understood by both sides. Avoid hiring a subcontractor who believes that a handshake is enough to seal an agreement.
A contract will also help you enforce accountability and set out expectations. The contract should contain vital information, including:
- Provisions in case a breach of contract occurs
- Rights and responsibilities of each party
- Terms of payment
- Due dates for work
Other information that might be contained in the contract include:
- Change orders
- Default clauses
- Insurance Clauses
Pay good attention
When you hire a furnishing or equipment subcontractor for the first time, make sure that they familiarize themselves with your plan. Also make sure to keep an eye on the subcontractor as they perform their work.
Establish progress reporting
Make sure that you establish a formal reporting structure that includes
- description of any problems faced
- An estimate of time remaining
- The milestone achieved
- Progress made
- Accounting of costs billed
Establishing progress reporting allows you to deal with problems as soon as they come up.
Show the money
Sub-contractors do not work for free. Make sure that you pay the subcontractors on time. Nothing motivates them more than money. Sometimes it can be hard to pay them on time, especially when your client fails to pay you on time.
In this case, structure a compensation plan that includes all the possibilities and contingencies. Pay them enough money so that they would be able to manage their jobs and complete your project.
Safety records change with time, and so do insurance policies. If this is the case, then the subcontractors you hire no longer meet the standards that were set up in the beginning. Make sure to confirm the needed licenses and insurance once more. Make sure to requalify the subcontractors by checking for expired insurances and any changes in their safety records.
Qualities of a good subcontractor
From unpredictable clients to financial pressure and deadlines, contractors face a lot of responsibilities. Here are some qualities of a good subcontractor that will help you ease the process of getting the right subcontractor for your project.
Have unique skills
Every customer has unique desires. To win over a proposal, you require team members that have the skills your clients demand. A good subcontractor has special skills like strong management skills, solid network development, computer and software expertise., and problem-solving skills
Good safety record
The key to completing a project successfully is by keeping the work site safe as well as preventing injuries. A good subcontractor has an excellent safety record.
To try new things and make adjustments, one needs flexibility. This means that the `subcontractor should be able to look at the bigger picture as well as long-range goal rather than the short term goals.
There are other factors to consider when looking for good subcontractors, they include, reliability, dependability, the ability to work together as a team and lastly, the skill to complete tasks in a timely manner. Managing your subcontractors is very important, always put your relationship with them as a priority by drafting proper contracts, orienting them on how to work, treating them well and making sure that you are compliant to the contract signed by the two parties.
Remember to keep the original copy of the contract safe, and give the subcontractors a copy as well as the client. Always bring onboard the right and certified subcontractors who can source furniture and equipment from nationally recognized suppliers like Onepointe Solutions.
Such employees can guarantee you timely completion of your project.