Subcontracting is when, as a company or individual, you enter into a contractual agreement with a third party to perform a task, shift or job of work. This third party may be a person or corporate body. In an arrangement like this the third party is known as a subcontractor.
Many SME’s including security companies, event companies, contract caterers and attractions management companies commonly hire subcontractors to assist with a wide variety of functions.
These days a company’s workforce is a much more flexible unit. Through the recent recession companies have shed any possible excess staffing with a view to changing the nature of their employees’ contracts, hiring new or part-time staff. Therefore, the use of subcontractors or temporary staff is much more common than it used to be.
Managing and using subcontractors can present a unique variety of business challenges and issues not normally found when dealing with your own in-house staff.
Some advantages of using subcontractors
Potential advantages to an SME of using subcontractors are that they are:-
- more financially responsible or accountable for their actions than members of staff
- more likely to turn up because there’s no sick pay for them
- less expensive and less risky that hiring a full-time staff member
- able to free up time for key staff that are undertaking necessary but boring, repetitive or mundane tasks to focus on more revenue generating or key matters to the overall benefit of the SME
Unless the subcontractors and their work are properly managed there can be some disadvantages. These could stem from the fact that there is sometimes:
- potentially less redress with the subcontractor for things that go wrong with the work after they have left
- a feeling that they are less accountable than you and your staff for your company’s relationship with your customers
- less influence on them by you, as opposed to staff, and therefore you and your business can suffer some potential loss of control and punctuality of work
Look to technology to help you manage them
There are many systems out there that you can find to manage your workforce or employees. There are also some systems that let you manage subcontractors but I haven’t found many, at all, that let you do both.
The advantage of using one “total staffing” workforce management solution is that if you didn’t, you could be wasting resource, increasing the potential for management mistakes and communication errors. Therefore it is best to find one that manages both. So in terms of the management of manpower it would be useful to have an overview of your staffing as total workforce (in-house and third party) as well as being able to see both separately. This would be especially useful in situations where subcontractors and staff are interchangeable or you are using subcontractors to cover for staff on agreed absence or sickness.
Whatever person you are selecting for a job or shift of work they will be representing your company and therefore you have to make sure you have the correct individual for the job, shift or event. A way to help with this is to have all of their training, certificates and work experience to hand and easily accessible. It helps if this is all online because you can access it wherever you are whenever you want. Make sure all your staff know the importance of keeping up to date with training and ensuring their certificates are up to date and valid.
Here’s a couple of useful links where you can find documentation relating to subcontractors whether you are a subcontractor yourself or are a company or individual using subcontractors
Here is a good article from Business Scene explaining the differences between subcontractors and contractors. It goes on to name some of the advantages and disadvantages of using either type of labour.
Examples of Subcontractor’s agreement templates can be found at –