As a contractor, you will often bear the responsibility for some portion of a company’s functions as you do work that enables them to operate. While it is certainly easy to conduct your own resources and employees to best meet the needs of your client, this task becomes far more complicated as subcontractors are added to the mix. Once you begin to use a subcontractor, you have people representing your company who you do not have direct access to in the workplace, making them a bit riskier if you don’t manage them properly. To avoid such risk, you should learn how to effectively manage subcontractors and employ certain practices to ensure your subcontractors are aware of what they are doing and their purpose within the job.
3 Ways to Manage Subcontractors Effectively
While the following directives may seem common sense, it is easy to forget even the simplest concepts when you are knee-deep in a project so reminders are often helpful.
1) Clearly Outline Their Responsibilities in the Contract
An important foundational element of managing a subcontractor is, of course, a well-written contract. By providing more detail in the contract, you can put the exact parameters you would like for the labor into writing. If this is done well, the roles, responsibilities, interactions with the client and other things subcontractors should keep in mind, are clear. This helps to answer any questions as the terms are being created instead of across the contract’s duration. By establishing a baseline in this way, you create a reference for both your own business and the subcontractor’s if there is any confusion about the work that needs to be done.
2) Establish Communication Channels
One of the things that the contract could establish is a method of communication to be used between employees of the two firms. Additionally, roles should be defined on both sides so everyone is clear on where responsibilities lie. Now more than ever, we have various means of communication and points of contact when interfacing between businesses. While this is often convenient, there is room for inefficiency if either party contacts the wrong person or uses the wrong platform to communicate. This issue is eliminated by simply establishing a method of contact early. In doing so, you gain control over what platform would be best used by those working on the project and you ensure that people less involved with the subcontractor don’t have to spend any extra time on a project they may not be as familiar with.
3) Address Changes As They Arise
Although addressing changes as they arise may seem relatively obvious and self-explanatory, there are many factors to consider as the client’s needs or conditions change. Since you have already established contract terms and channels of communication, you certainly have the means to keep your subcontractor in the loop so they can do their job correctly and on schedule. These channels and, ideally, meetings held with the subcontractor should also be used if there are any meaningful changes to the labor they will be doing. This saves your business some trouble, but it is more important to keep a healthy relationship with the client who has a contract with your firm. If the subcontractor is out of the loop and does their work based on outdated information, the blame will ultimately fall on the people who didn’t promptly address the changes. This practice, while simple, preserves your company’s reputation among both subcontractors and potential clients.
In many fields of work, hiring subcontractors is an inevitability if you want to expand the scope of your business. Understanding the differences between managing personnel from the subcontractor and your own employees is an important aspect of achieving this growth while continuing to keep a professional appearance. By understanding how to effectively manage subcontractors, you can gain an important advantage over competitors by establishing your business as one that promotes ease and clarity for those who hire you and those who you hire.
Make Effective Subcontractor Management Easy with PaperTrl
Construction companies face unique accounting challenges not commonly found in other industries — from job costing to subcontractor management to contract retainage and many others. PaperTrl AP automation software provides the tools to help you take on many of those tasks and more with automated processes and supporting data that feeds directly into your accounting system. Start your free trial today.