Hiring skilled and reputable subcontractors can help you grow your construction business and boost your reputation
Whether you’re a large general contractor with many employees or a one-person business that focuses on remodeling, you will run into situations where you must hire a subcontractor. Subcontractors fill in the gaps for general contractors. Many contractors have small teams and don’t have trained professionals like electricians or plumbers on staff and must subcontract that work out.
But it's not just general contractors who hire subcontractors—homeowners often find they need a specialist to step in if they run into an electrical or plumbing problem they aren't qualified to fix. Regardless of your situation, this guide will help you determine when you need a subcontractor, as well as what steps to take to ensure you hire the right person or team for the job.
How to Determine If You Need a Subcontractor
You may bristle at the idea of spending money on outside help, but a subcontractor can save you a lot of money in the long run compared to doing it yourself.
If you have a general contracting business, here are some signs you should seek a specialist:
You need additional help to support your team in meeting a critical deadline.
It is too expensive to keep someone with certain specialized skills on staff because it makes up such a small portion of the work you do.
Your team could do the work, but it’s not your expertise and you have doubts about whether it would meet the quality standards your client expects.
Types of Subcontractors
There is a wide range of subcontractors. You can find a specialist for just about any job involved in a construction project, which sometimes makes the task of figuring out what subcontractor you need challenging.
It would be impossible to list all of the subcontractor types here, but generally, they fall into the following categories:
Heating, Ventilation, and Air Conditioning (HVAC)
HVAC subcontractors are licensed experts at ensuring a structure is comfortable and safe for human occupancy. They install systems and check airflow to heat homes in the winter and cool them in the summer.
Plumbing
These licensed subcontractors install and maintain pipes that ensure the flow of water and sewage.
Electricity
Electrical work requires a particularly high level of care, so it's important to hire a licensed subcontractor if you don't have anyone who is an expert in this work.
Masonry and Drywall
This is a broad category covering subcontractors who focus on the general structure of the home.
Roofing and Siding
Protecting the home’s interior from the elements is essential, so hiring a skilled roofing subcontractor is necessary.
Interior
Construction managers often bring in subcontractors to build out the interior, such as installing flooring or cabinets.
Foundations
A construction team that fails to do proper foundation work will face expensive repercussions down the road. Look for foundation teams who consistently do work on a daily basis.
Painting
While painting is something most construction workers can do, it's often more cost-effective to hire a paint crew to take care of this task than pull your team away from higher-priority work.
Benefits of Hiring a Subcontractor
So what are the specific benefits of getting a subcontractor? That will vary depending on the work you need done, the type of project, and a host of other factors.
But here are a few main advantages to getting a subcontractor:
Meet deadlines: No more missing deadlines due to being short-staffed.
Exceed client expectations: You’ll be able to complete quality work and offer more services by hiring subcontractors in an area where your team doesn’t have the experience.
Improve productivity: Keep your workers focused on high-priority tasks instead of pulling them off to handle miscellaneous items.
Save money: Hiring a subcontractor on an as-needed basis is much more cost-effective than hiring a full-time employee.
Risks of Hiring a Subcontractor
Subcontracting out work has many upsides, but it is not always the right choice for your company. You should consider a few factors before making a decision on whether to hire outside help.
Here are a few of the downsides of getting a subcontractor:
Not cost-efficient: If you need this work done a lot, you may save money by hiring a full-time employee instead of subcontracting out the work.
Potentially risky: If you don’t know a subcontractor well, you may get one that does work that isn’t up to your standards.
Hassle: You may find you’re spending a lot of time vetting subcontractors, pulling you away from more important tasks.
Liability: Make sure that your subcontractor is insured for injuries (liability).
How Much You Should Pay a Subcontractor
The cost of hiring a subcontractor varies widely depending on the type of subcontractor, the project, the work that needs to be done, and many other factors.
The average subcontractor salary is $76,932 per year or $37 per hour, according to ZipRecruiter, so that should give you some idea of what you'll have to pay. However, this rate will vary widely depending on the subcontractor's specialty, the technical expertise needed for the job, your geographic location, and so on.
For example, the average hourly wage for a roofing contractor is about $20 per hour, but the rate may fall within a range of $13 to $34. On the other hand, a bricklayer averages almost $25 per hour, but the full range is anywhere from $15 to $40.
Get quotes from several subcontractors and compare before making a selection to ensure you pay a fair wage.
Where to Find Subcontractors
For many general contractors, hiring a subcontractor is not as easy as simply posting on a job board and sifting through resumes. You need someone with expertise in the work and with the proper licenses, insurance, and other paperwork.
Here are a few places to find someone qualified to work on your project.
Ask for Referrals
Check with other people in your industry for recommendations of subcontractors they use and trust. Referrals are one of the best ways to find subcontractors because other contractors have seen that individual or team’s skills and work ethic firsthand. If a person refers a subcontractor who turns out to be great, consider paying that person a referral fee (such as $500 in the form of cash, check, or gift card).
Go to Trade Shows
Networking is a great way to find subcontractors. Attend any local trade shows where professionals in your industry gather and meet as many people as possible. Bring business cards or a pamphlet that breaks down the work you do and the expertise you bring to the table. By putting a face to the name, you build trust in potential clients, which is crucial in your industry.
Approach Subcontractors Directly
If you see subcontracting work happening locally, approach that subcontractor and pass along a business card. Take a look at the work they’re doing and tell them about your project. If they’re interested, describe the work you’d have them do for you and ask if they have the skills to do it.
Talk to Suppliers
Subcontractors have relationships with suppliers, so get recommendations directly from the companies that supply them. This allows you to target experienced subcontractors who work with specific materials or have specialized skills.
Solicit Bids
If you'd rather start from scratch, solicit bids and vet subcontractors one by one. While this may require more work, it may help you identify the perfect subcontractor for your team and lay the foundation for a long-term relationship.
How to Vet a Subcontractor
Even if you identify what you think is a good subcontractor, you're still responsible for proper vetting. Here are a few things you must do before having them join your team at the job site.
Ask the Right Questions
Don’t assume a subcontractor knows how to do the work. Ask specific questions designed to ferret out if they have the expertise for this job.
For example, while they may be a reputable flooring contractor, do they have experience working with the particular tiling material your client wants? You know what you need, so make sure the subcontractor can handle it.
A few other examples of questions to ask include:
Are you licensed (if applicable), bonded, and insured, and can you provide the paperwork to prove that?
How quickly could you realistically complete this project?
When are you available?
How large is your workforce?
What equipment do you have available?
What is your safety record?
Where can I view customer testimonials and reviews of your work?
Vet for Expertise
It’s not enough to determine if they’re a good contractor; you also need to know if they have experience with jobs specifically relevant to the work you need done. A specialist who excels at home remodeling projects may not possess the breadth of expertise needed for a new-build single-family home.
Ask the subcontractor for examples of previous jobs, so you can determine if they have the proper experience.
Check Licenses and Insurance
The necessary licenses depend on the state and locality. Failing to hire licensed subcontractors places you at risk of fines and lawsuits.
Your subcontractor also needs insurance to protect themselves, as well as you and your client.
Some common types of insurance include:
Liability insurance: Covers property damage and injuries
Errors and omissions (E&O) insurance: Protects from lawsuits for mistakes made
Surety bond: Protects the client if the contractor can't finish the job, covering costs to find a new contractor
Auto insurance: Protects subcontractors who use a vehicle to do their work
Workers’ compensation: Covers medical and disability costs for work-related injuries
Gather Correct Paperwork
All paperwork must be in place before the subcontractor starts work.
The subcontractor should provide the following paperwork to you:
Certificate of insurance
Completed Form W-9 for the IRS
A signed contract that describes the arrangement between you and the subcontractor (this should be prepared by a lawyer)
Subcontractor Hiring Checklist
This is a broad overview of the subcontractor hiring process. Check with a lawyer who specializes in construction in your region to create a more specific checklist of paperwork and other requirements for any subcontractor you hire.
However, the general hiring process looks like this:
Determine If a Subcontractor Is Necessary
The first step is to determine if you even need a subcontractor in the first place. Take a look at your team and determine whether anyone has the skills to complete the task.
For example, perhaps you have a worker with masonry experience who you’ve had working on foundations. You could assign that worker to masonry instead of hiring a subcontractor.
However, if you don’t have anyone with adequate experience, or are on a time crunch and can’t pull workers off current tasks without jeopardizing the project timeline, you should seek a subcontractor.
Identify the Right Type of Subcontractor
The next step is to identify the kind of subcontractor you will need to complete the task. This is obvious most of the time, but you should identify any additional special skills they will need, such as experience with specific materials.
Find Subcontractor Candidates
With a clear goal in place, it’s time to get a list of candidates. Networking and referrals are the best way to do this, either through other contractors or through suppliers, but you can also solicit bids to find new candidates. Put out a request for proposals and start collecting bids so you can examine which ones best match your project.
Vet Each Candidate
Before you even get an estimate from these candidates, start the vetting process. Ask them upfront to provide licensing documentation. If you find out later they’re not qualified to work on your project, it will set you back considerably.
Get Multiple Estimates and Compare
Now that you are confident the candidates are qualified, have them submit detailed estimates for your project. Compare the bids to ensure you’re getting a fair price. Don’t just choose the lowest one, as you want to ensure that the quality of their work will meet the client’s expectations and keep your reputation high.
Draw up an Agreement
Find a detailed subcontractor agreement template online, customize it for your project, and have a lawyer review it. Or, have a lawyer draw one up specifically for your project. Spell out what you expect of them and what will happen if they do not meet your expectations.
Grow Your Company With Subcontractors
Finding a good subcontractor doesn’t have to be complicated, but it’s not something you should take lightly either. The wrong subcontractor will set your project back and cost you money in the long run. But the right subcontractor can help you grow your company, build a stronger reputation, and book more jobs.
If you’re wondering where to begin your search for a subcontractor, you’ve come to the right place. Angi has a large directory of subcontractors near you with experience in a number of specialties. Begin your search today.
