What to look for when hiring subcontractors … and how to keep them

PUT IN THE SUBS

What to look for when hiring subcontractors … and how to keep them.

BY TODD ANDREW

In this line of work, we’re all too familiar with the worst-case scenarios that can develop between general and subcontractors. A quick scan of recent headlines reveals unfortunate conflicts in every corner of the industry.

  • In North Carolina, major road repairs came to a sudden halt when the primary subcontractor unexpectedly walked off the job. The company says it made the decision “pending resolution of sizable claims,” calling the payment process “broken.”
  • In Massachusetts, the courts ruled that a subcontractor was not entitled to partial payment after refusing to perform disputed asbestos removal. At the heart of the matter was whether such work fell within the scope of the contract.
  • And in Oregon, legal action is underway in a $3 million breach-of-contract case between a foresting company and its timber-management subcontractor.

Despite all parties’ best efforts, lawsuits and other dust-ups are often natural side effects of doing business. Bad things happen to even the most cautious, well-intentioned companies, regardless of industry.

The good news is, responsible general contractors can take steps to minimize risk and ensure optimal relationships with the crews who perform their specialty trades. Knowing what to look for in hiring the right subcontractors – and following best practices to keep them– makes everyone’s life a lot easier.

For starters, nobody needs the negative publicity. More importantly, it helps the bottom line … and the customer ultimately wins.

As a general contractor serving the Central Florida market, each day I utilize up to 100 general contractors on a variety of commercial projects. Here are a few things I’ve learned about this aspect of the business over the past 20 years:

The Selection Process

When selecting a subcontractor, consider these factors:

Character and Reputation: It all starts with word of mouth. This is the best way to separate the good from the not so good. Which subcontractors are regularly employed by friendly competitors? Who do trusted colleagues recommend? Our industry is full of people who over-promise and under-deliver – and word travels fast. Who has a reputation for earning repeat business – and for what reasons?

Quality and Aptitude: What are the subcontractor’s technical abilities? What does the finished product look like? Don’t just rely on a portfolio or website. Drop in unannounced on a construction site or two. Take a peek under the hood, so to speak, and check to see that things are being done the right way.

Experience and Potential: Certain jobs require more expertise than others, and proven credentials speak volumes in such situations. But don’t pass over potentially excellent subcontractors just because they are new to the trade. Try starting them on a small project and see if they earn your trust. Many times, these arrangements can turn into rewarding long-term relationships that deepen your pool of trusted partners.

Maintaining the Momentum

Once a subcontractor comes on board, follow these guidelines:

Pay Fairly and on Time: It might seem like a trivial matter, but this could be the biggest driver in keeping quality subcontractors on your team. Sticking to a weekly pay schedule, and not bouncing checks, will go a long way. If a small subcontractor is doing a good job but struggling financially, step up to the plate and write a check early. The goodwill this engenders is well worth the investment.

Always Show Respect: This advice should go without saying. Yet in certain circles of our industry, subcontractors are treated like they’re a dime a dozen. And that’s a shame. Operating from the vantage point of “I need them more than they need me” really puts things into perspective. Remember, respect is a two-way street. If you mistreat the people under you, word will spread. And it will probably come back to bite you when trying to hire for future jobs.

Recognize Their Needs: To make ends meet, all contractors – general or sub – need to complete projects as quickly and smoothly as possible. Few things are as frustrating as working on a site plagued by avoidable delays, inattention to detail and bad leadership. Delivering efficient on-site management and scheduling that allows subcontractors to efficiently “get in and get out” makes subcontractors want to grow the relationship. Top it off by showing everyday gratitude and appreciation – little things like dishing out individual compliments and treating the crew to lunch.

Communicate Clearly: Of course, the first and most important aspect of clear communication is having a contract that covers all the bases. The good GC/Sub relationships rarely ever have to enforce the contract verbiage or hold it over a subs head. Once on location, make sure supervisors and project managers are leading properly by constantly reinforcing expectations, spreading a shared vision and sticking to the plan. At the end of the day, a general contractor’s job is 90 percent about working with people and 10 percent technical. While it’s important to be a straight-shooter, it’s equally important to be a good listener. Good communication is essential in order to meet the project’s deadlines and budget.

Todd Andrew is president and owner of Andrew General Contractors, a full-service Orlando-based firm he started in 1996 after nine years of management and operational experience in the construction industry. Andrew GC specializes in commercial ground-up construction, interior buildouts and renovations. To learn more, visit www.AndrewGC.com or email tandrew@andrewgc.com.