Subcontractors aren’t new in the workforce, but they’re becoming increasingly common, and any business can benefit from this flexible labor solution. Because they technically work for themselves, subcontractors are less expensive than hiring a full-time employee and are excellent resources for completing one-off projects and providing specialized skills you may not need 100 percent of the time.
As with everything in life, your mileage with subcontractors will vary. They’ll fall anywhere on the spectrum of “I’m so glad I never have to work with them again!” to “Wow, I wish I was hiring so I could keep them all to myself!”
Hopefully, you’ve had more of the latter than the former, but if you haven’t, there are ways to make sure the partnership is a positive experience.
Consider these tips for managing subcontractors.
Get it in writing
Don’t let a subcontractor start without a written contract. Contracts set expectations, spell out each party’s rights and obligations, and enforce accountability to protect you and the subcontractor.
Make sure you:
- Identify each party correctly. Use legal names and official titles, don’t forget the Inc. or LLC suffixes, etc.
- Spell out the details. If you discuss something but don’t put it in writing, it will be difficult to enforce.
- Specify payment terms. Will you pay in installments, when work is completed to your satisfaction, monthly, weekly, or on some other schedule? Do you offer payment via cash, check, PayPal, or direct deposit? And don’t forget to include the pay rate.
- Agree on resolving disputes. Consider using arbitration or mediation before taking disputes to court.
- Agree on contract termination. If one party fails to uphold their responsibilities, the other party must have the right to terminate the contract.
- Define the scope of work. Describe, down to what seems like ridiculously minute details, what the subcontractor is being hired to do.
- Identify rights, duties, and constraints of each party. Is the subcontractor responsible for their own liability insurance? Can they subcontract parts of their work? Will they provide their own tools?
We strongly encourage you to consult a lawyer to help you draw up contracts.
The contract may be signed, but that doesn’t mean your subcontractor can jump in with both feet. They need to know how you work, particularly involving communication.
- Who do they approach with questions?
- What is your primary means of communication?
- Do they need to download software (e.g., Zoom or Slack)?
- How often do you expect them to check in?
Subcontractors won’t necessarily need to “jive” with your team, especially if they work remotely, but they need to know your standard operating procedures.
Also, be clear about what you want and when. A well-designed brochure? New content for a website? Consultation on a research project? Friday? Next week? Whenever you have time? You can’t hold them responsible for what you don’t tell them.
Don’t be hands-off
Because they aren’t technically your employees and your work together is limited/finite, your relationships with subcontractors will differ from those with official employees. Sometimes, managers assume they don’t need to ‘tend to’ subcontractors as much, and while there is truth to that, steer clear of making your work with subcontractors purely transactional. Treating them like people will inspire them to do their best work and ensure they want to work with you again.
But don’t micromanage
Many subcontractors freelance for autonomy, so it’s essential to give them that freedom. If they complete their work on time and to your satisfaction and follow your standard operating procedures, give them space to work.
Many industries are subject to state and/or federal regulations, and failure to comply can cause penalties like fines and criminal charges. Hiring subcontractors with compliance in mind can be challenging, but it’s your responsibility to make sure your subcontractors follow regulations.
For example, if you’re in the medical industry, make sure they understand HIPAA. If you’re hiring drone pilots, make sure they have a remote pilot certificate with a small UAS rating. If you work in a manufacturing or distribution plant, make sure they’re aware of OSHA standards. Et cetera.
Follow the Golden Rule
As in all parts of life, follow the Golden Rule: Treat others as you would like to be treated. Pay your subcontractors on time. When you offer criticism, make sure it’s constructive. Offer positive feedback for a job well done. Respect their time. (You get the idea.)
Managing your subcontractors is as important as managing your employees. Follow our tips for long, happy, and productive relationships with subcontractors.
Don’t have the time to manage your subcontractors? Behind the Scene Online Business Manager specializes in team management. Schedule a free consult today.