9 Best Practices in Hiring and Working with Subcontractors

• October 21, 2022
• Rock Creek Consulting Group
• no comments

The employment environment is constantly changing… as workers consider their options and businesses look for flexible, cost-effective solutions.

Let’s look at some ADVANTAGES of working with independent contractors (or subcontractors).

Independent contractors help you quickly fill skills gaps in your team. They enable business growth without taking on employee costs such as taxes, benefits, training, onboarding, equipment, and office space.

Furthermore, since many subcontractors have worked in a variety of companies, they often gain broad knowledge and experience through dealing with different people in different situations.

You can also hire independent contractors on a project basis, meaning that you part ways once they complete a job. That means no ongoing payroll commitment.

Finally, an independent subcontractor might expose you to their network, so you gain access to additional skills and resources.

Now for some BEST PRACTICES when engaging independent contractors.

1. Most important is to clearly define the tasks, the skills, and the commitment you need. Develop a detailed project description, including what you need to be done and when it needs to be completed. Knowing what is required will help narrow your search, saving you time in recruitment and training.

2. Follow a simple hiring process. It starts with publishing your job description in an appropriate job forum. You can post in the same forums that you would typically post in. For example, you may want to post on LinkedIn. Remember, you are NOT looking for an employee, so you don’t need to emphasize the company benefits in your post, like vacation, or health insurance. Instead, you can focus on the actual work and whether the candidate will effectively complete the job you have defined. Many experienced sub-contractors will have a website, social media, reviews, and a portfolio. Review them in detail and assess how the individual presents themselves as a potential business partner. Generally, you won’t need multiple interviews for this.

3. Establish any ground rules in addition to the Scope of Work. These could include legal requirements such as confidentiality, intellectual property ownership, and non-solicitation. You might explain how they will communicate with your team, who they will interact with, meeting schedules, ongoing communications, activities, or milestones. Most important is to agree on the price, payment terms, and any contingencies or performance-based metrics.

4. Get started – and set your subcontractor up to succeed. Identify some small wins they can accomplish early on. Help them build confidence. Check-in frequently and provide feedback. If they fail, you fail, which means wasted cash and time. The best subcontractors will appreciate your efforts and try to make an excellent first impression – that’s the beginning of a successful interaction.

5. Monitor Progress and take quick action. Not every project will go exactly as planned, and you may need to modify terms. Speed is of the essence, especially in the early stages, whether amending or canceling the engagement. Don’t allow things to linger because problems generally get bigger the longer they’re left.

6. Where possible, leave the subcontractor to work autonomously. Many subcontractors have chosen NOT to be employees to avoid the micromanagement they could experience in full-time employment.

7. Facilitate teamwork as required. Some of your employees will be intrigued and very optimistic about subcontractor relationships. Others may be dubious or even hostile. Take the time to explain things to your team, so they support the direction. In many cases, they can learn from subcontractors, and a ‘fresh perspective’ will be valued.

8. Build a feedback loop. At the outset, there should be frequent feedback meetings, but these can become less frequent over time. The purpose is to ensure things are on track or take action quickly when they’re off track. Keep a written record of important discussions, so there’s a paper trail later in the event of disputes.

9. Consider Longer Term arrangements, if appropriate. Perhaps the first project will spawn an additional project. If you work well with a subcontractor, engage them for additional work to avoid going through another lengthy hiring and training process.

As you see, there’s no magic to working with independent contractors… but you can gain access to valuable skills on attractive terms. Follow these Best Practices for the best results!