How to Succeed in Construction Through Good Subcontractor Management

In the construction world, subcontractor management can either mean the success or failure of your project. So many different skills are needed, and each of them requires people who know what they’re doing in order for you to deliver the completed project that you’ve promised your clients.

Avoid the headaches that can come with managing subcontractors in construction by learning how to get subcontractors to see themselves as a valuable part of your team.

construction subcontract management

What Are Subcontractors In Construction?

Subcontractors are usually independent freelance workers who are advanced knowledge and ability in specialized trade skills within the construction industry. They are typically hired onto a project on an “as needed” basis since their contributions only make up a small part of the overall job.

Subcontractors in a construction setting take care of things like electrical, plumbing, HVAC, masonry, finish carpentry, drywall, painting, and landscaping, Even though they are not directly employed by general contractors, they often find themselves working with the same contractors over and over. Once a contractor finds a reliable subcontractor, they don’t want to let them go!

How to Get Subcontractors

As with most things, “it’s not what you know, but who you know.” The majority of the time, contractors find subcontractors through word of mouth or personal referrals. The construction industry tends to be a small community, so when someone is known for doing good work in a particular area, word gets around. Asking friends and people you know within the industry who they recommend is the best place to start.

Beyond that, here are several ways to find subcontractors in your area:

  1. Angi.com – formerly “Angie’s List”; it’s not just for homeowners. See prices, reviews, and book subcontractor services all in one place.
  2. Yelp.com – Get real-world reviews.
  3. Social media groups – Ask on Facebook groups and community forums.
  4. Active construction sites – Stop in where you see work happening. Look at what they’re doing, talk to them directly, and get their information so you can talk more later. (Just don’t hold them up too long, and definitely never steal them out from under the project they’re working on!)
  5. Specialty suppliers – If you’re looking for a [fill in the blank], what better way to find one than wherever it is that [fill in the blank] gets their supplies? Paint shops, plumbing suppliers, nurseries, etc. interact with the subcontractors you’re looking for on a regular basis. They’ll have a great sense of who has a good reputation. They can either give you some names or pass your information along to people they know.

Construction Subcontractor Management

Once you’ve found the subcontractors you need for your project, then comes the task of effectively managing them in order to get the results you need on time and within budget. (General contractors who have experience herding cats will be well prepared.)

The International Risk Management Institute has a great article on “Effective Subcontractor Management” that we recommend you check out after this post. In it, they refer to what we’ll call “the 3 C’s” of a good subcontractor. They should be:

  • Competent – Do they know how to do their particular job well?
  • Cooperative – Is working with them easy or difficult?
  • Capable – Are they able to get the job done when you need it done?

Before the work ever begins, you’ll need to be sure each subcontractor understands the “big picture” of the project and exactly what their role in it is. The better they understand what is expected of them, the better they’ll be able to deliver.

Be sure to go over the construction schedule, site safety requirements, and your process for handling any disputes as well as disruptions/changes that will inevitably come up due to scope changes, weather, supplier delays, etc.

Managing Subcontractors On-Site

Once work begins, the goal of the General Contractor (GC)–or Construction Manager (CM)–is to keep things moving. Subcontractors will arrive at the site hopefully prepared and well-briefed ahead of time. However, they are all going to be working with their own schedules and supply chain issues.

At the job site during construction, it is important that the GC stay in regular contact with subcontractors in order to stay as informed as possible as well as keep them up to date as well. IRMI recommends weekly subcontractor meetings, and we think that is a great starting point.

Even if you aren’t able to physically meet with the subcontractors you’ve hired, you should be able to at least talk to them by phone once or twice a week. Since a good GC will be making regular visits to the job site, it will be easy to track the progress of their work and help resolve any problems they may be having due to your crew or other subcontractors working in the same space.

You simply cannot over-communicate when it comes to managing subcontractors.

Subcontractor Management Best Practices

1. Due Diligence in Pre-Qualifying

Do your homework when looking at hiring potential subcontractors. Check references and talk to previous clients. Make sure they have a track record of actually delivering on what they promise.

2. Good Management Software

Trying to keep up with all the moving parts of a construction project when your own company is the only one working on it is tough enough. To think you can keep track of everything with several subcontractors in the mix is nearly impossible! Take advantage of the incredible advancements in subcontractor software that make it easier to keep everything in order.

3. Strong Communication

It can’t be stressed enough. Good communication with your subcontractors is essential to the success of your project. Without it, you will face countless mistakes, unnecessary setbacks, and failure. Be clear about what you expect from them and what they can expect from you. Follow up regularly. And repeat.

4. Details in Writing

The old adage is true: “if it isn’t written down…it didn’t happen.” Make sure that everything you agree to with a subcontractor is in writing. Even if it is a simple email to recap a conversation you just had about changes at the job site. That way you have a paper trail to point back to when things get confusing, and you have a way to maintain accountability with the people you hire.

5. Professional Ethical Environment

As much as you expect subcontractors to act professionally and deliver great results with the work they do for you, they should be able to expect that you will treat them professionally as well. Never take advantage of the position you have over them, or use the leverage of “you won’t get paid until I’m happy” to be unreasonable. Treat them like you’d want to be treated, and you’ll have someone who will be glad to work hard to make you look good for your clients for years to come.

subcontractor management best practices

We Can Help With Your Subcontractor Management Issues

At CRS CPA, we go way beyond taxes and bookkeeping. Our team of business development professionals provides CFO Consulting that includes things like new business formation and strategic business planning (among many other things).

Check them out. Expect more from your CPA. Schedule a call today!

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