For many in the industry dealing with a subcontractor is inevitable. However there are many pro’s and con’s to using a subcontractor. When work volumes surge, or when you simply have a project you don’t have the skillset for, hiring subcontractors is one path you may consider. But before hiring a subcontractor its important to know all the potential issues that can arise. To help, Remodeling Magazine has compiled a list of Do’s and Don’ts for managing a subcontractor. Check out quotes and tips from our very own Ryan Parsons, Chief Solutionist at The Brothers that just do Gutters.
“Subcontractor installers can be your best friend or your most recent nightmare. It’s all in the expectations set and the manner in which you follow through. Some do’s and don’ts from company owners and industry experts:
- DO check out an installer’s work before hiring them for a job. Jeff Head, owner of Head’s Construction, in Evansville, Ind., once had a crew that wanted work and “talked a good game.” So he gave them a siding job without looking. He got a call from the homeowner three days later. The crew had finished only one side of the house and what little was done was completed in a less than satisfactory manner. Head went to the site, saw the work, and, he says, “my heart dropped a foot.”
- DON’T wait to contact them the day before you need the work performed. Ryan Parsons, co-owner of The Brothers That Just Do Gutters, a New York company that installs gutters and frequently is a subcontractor for roofers, says that he can’t remember the number of times he has gotten a call from a contractor saying, “I just finished a roof, can you have a crew there tomorrow?” Parsons says that he learned to start saying no to such requests. Lack of planning makes for chaos.
- DO hire people like yourself. Lorin Miller, president of Miller Custom Exteriors, in Fredericksburg, Ohio, points out that home improvement companies often spend lots of time interviewing employees, including having them complete a battery of tests. Apply the same standards in your search for subcontractor installers. Do they represent you well on the job? “We look for [installers] based on the way they do the work, not on price,” Miller says. And if you want some guarantee of perfection in the work, find your pickiest customer and ask who they used to put on a roof or gutters, Miller suggests.
- DON’T hold back on payment. “Pay three days or less after completion,” Miller says. All good subs have worked for someone who stiffed them, he points out, and “paying well and quickly is the way to get good workers.”
- DO keep them busy. “Realize that when you give subcontractor s a lot of work, and not just hire them when it’s convenient, then they can make a living at it,” Miller says. Their loyalty — and preference for prioritizing your jobs over those of competitors — is in direct proportion to the volume of business you send their way.
- DON’T have installers show up at homes with their company’s signage on the truck. You sold the job, you’re paying them.
- DO have the salesperson who sold the job countersign the installer’s invoice. “That way,” Head says, “you make sure they’re not trying to stick it to you.” That is, that the installer is billing you for the price for which they actually agreed to do the job.
- DO make it clear that leads belong to your company. Any leads resulting from conversations with friends and neighbors while the work is going on belong to your company, not to the sub.
- DON’T pay in full, if you have any reason to doubt that the sub will not make good on service obligations. Instead, agree in the contract to put 5% to 10% in escrow for six months to a year to cover the cost should that crew not be available for service calls. If you don’t hold back some portion of the cost to cover service, “you’re at their mercy,” says sales and marketing consultant Grant Winstead. “All you can do is keep calling them because the customer will keep calling you.”
- DO have the jobsite prepared so that installers can do what they’re hired to do at the time you specified. “I hate it when I get there and they’re not ready for me and it screws up my schedule,” Parsons says. —Jim Cory is editor of REPLACEMENT CONTRACTOR, a sister publication of REMODELING.”
A big thanks to Remodeling Magazines Jim Cory for writing this article! All contractors, general contractors, and remodelers should know this information before hiring a subcontractor.