What Is a Subcontractor? Understanding Subcontractor Management


Projects aren’t a one-man show. They require professionals with an array of skills, and the more complex a project is, the more skills they require. Because of this, owners hire contractors to manage the project, and contractors use subcontractors to fulfill niche roles.

Construction projects are complex in nature. They demand extensive planning, manual labor, and they call for various specializations. Realistically, no individual on the team has all of these specialized skills and, even if they did, it would be impossible to do it all themselves. This makes construction subcontractors, a necessity for most modern construction projects.

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What Is a Subcontractor?

A subcontractor is a free agent employed on a job-by-job basis when their skills are needed. Usually, these skills are specialized, rather than generalized. Subcontractors are oftentimes self-employed and choose the jobs they wish to take, which can make it difficult to find work when they don’t already have a large network of clients.

Even then, if these clients don’t have projects to complete, there is no demand for a subcontractor’s skills. One solution to this problem is finding contractors to work for, rather than independent clients.

Subcontractor vs. Contractor: What’s the Difference?

To fully understand the relationship between contractors and subcontractors, we must define what a contractor is. Contractors are people or organizations hired by owners to “build” a project, or at least some part of it. More often than not, contractors are used for construction projects where they are responsible for physically building something.

Subcontractors are then hired by contractors to work on a project when the contractor doesn’t have the time or expertise to do the tasks themselves. Subcontractors are hired and paid by the contractor.

The ideal relationship between contractors and subcontractors is a symbiotic one. Contractors need subcontractors for their skills and hard work, and subcontractors need a contractor’s large network of clients. This network ensures there is always work to be done. It also allows subcontractors to focus on their role in the project, rather than finding projects in the first place.

While this relationship has proven to be effective over the years, that doesn’t mean it’s always perfect. It’s common to see projects where the project owner, contractors and subcontractors argue due to a lack of planning and poorly defined contracts. It’s very important to have solid contract administration guidelines and procedures in place so that you can manage your contractors or subcontractors effectively.

Examples of Contractors

The most common example of a contractor is a construction contractor. Generally, the party who needs to execute a construction plan won’t be able to complete the work themselves. For example, a company opening a new office will hire a contractor to manage the project.

Examples of Subcontractors

Subcontractors are individuals with special skills. In construction projects, contractors will hire subcontractors who specialize in different aspects of the project, such as plumbing, electricity, painting, etc.

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Why Do Contractors Use Subcontractors?

Contractors and subcontractors aren’t unlike agents and the talent they represent. If contractors want to continue expanding their network of clients, they must take on more jobs. The scope of these jobs will typically necessitate the hiring of subcontractors.

Note that subcontractors aren’t just hired labor. Subcontractors are stakeholders hired for their expertise, which makes them valuable. Electricians have a unique skill set that others working on a construction project do not. This is a specialized trade, and someone without training would not be able to complete the work up to code.

So, ideally, hiring subcontractors and effective subcontractor management increases output and improves the quality of the work being done. This allows contractors to grow their business and increase profits, and ultimately it can mean being able to take on projects with greater size and scope. Subcontractor management isn’t about just hiring an extra set of hands: it’s about ensuring that specific outcomes for a project are achieved.

The Risks of Using Subcontractors

Ideally, subcontractors make life easier for contractors and improve the quality of the end results, but there are risks that come along with using them. Subcontractors represent contractors. When they complete quality work, it reflects positively on the contractor. But this goes both ways.

Because subcontractors are autonomous parties, bringing them onto a project is a risk. A few examples of this include subcontractors showing up late to a job, not showing up at all, completing unsatisfactory work or acting unprofessionally. If this happens, it can be difficult for contractors to fire subcontractors, depending on the terms of their contract.

So, if contractors continue to hire subcontractors, what steps are they taking to protect themselves? Two good ways for contractors to protect themselves are being selective when hiring subcontractors and practicing good subcontractor management with daily construction reports.

How to Hire A Subcontractor For a Project

Finding a trustworthy subcontractor for a project is absolutely critical, but that doesn’t mean it has to be difficult. A good place to start is establishing set criteria that every subcontractor should meet. This takes the guesswork out of the process and allows you to focus on the highest quality candidates for the job. These criteria can include references, work samples and more.

Once a contractor finds the right subcontractors for their project, they will agree on the terms of a contractor-subcontractor contract, a key document for subcontractor management. This holds both parties responsible for fulfilling their end of the bargain. Subcontractors are held accountable for doing quality work on time. Contractors are accountable for providing a safe work environment and paying wages. A solid construction estimate can help ensure that enough of your budget is set aside to pay subcontractors.

What Is Subcontractor Management?

When contractors hire subcontractors, they must practice subcontractor management in order to keep projects running smoothly. This begins by identifying the project owner’s needs and choosing quality subcontractors accordingly. Creating the criteria we mentioned previously can be part of this process.

Once contractors hire subcontractors, it is their duty to fill them in on expectations and employer policies. This establishes communication and ensures everyone is on the same page. With practicing good subcontractor management, this debrief will be structured the same way for every project to ensure all information is addressed.

When everyone is on the same page, the bulk of subcontractor management begins. The contractor must constantly monitor subcontractors and the status of the project in order to be sure everything is running smoothly and subcontractors are meeting expectations. Subcontractors must also make sure that work conditions and communication remain top-notch.

Examples of Good Subcontractor Management

Almost all construction projects use subcontractors. In fact, subcontractors do the majority of the labor. Using subcontractors can be extremely advantageous, but it necessitates skilled subcontractor management to avoid organizational issues and lapses in communication.

Keep Documents Organized

Hiring and managing subcontractors means lots of incurred paperwork. This begins with the construction contracts subcontractors agree to and extends to timesheets, expense records, safety standards and many other documents. Because there are so many documents, they need to be found with ease.

Related: 8 Free Excel Construction Templates

Create and Share Schedules

Communication is one of the most crucial aspects of stakeholder management. This starts by creating and sharing a project schedule with the entire team. Because subcontractors will be most involved in the project, they should be able to see the big picture, rather than only knowing due dates for individual tasks.

Assign Tasks Clearly

Throughout construction projects, tasks will crop up and need to be assigned to subcontractors. When this is the case, contractors should use a purposeful method for creating, assigning, tracking and communicating about tasks. Relying solely on conversations or informal documentation is a recipe for miscommunication and, ultimately, incomplete tasks.

Focus on Quality Communication

Contractors and subcontractors must be in constant communication throughout the lifecycle of the project. This is the only way to guarantee everyone is collaborating effectively. Contractors, in particular, need a system for these communications. Contractors are managing multiple subcontractors, often working on different projects, at the same time. When this is the case, casual communication won’t cut it. Instead, document communication and make sure everyone can access the information afterward.

Use Construction Project Management Software

As you can see, successful subcontractor management comes down to creating systems and making sure everyone is abiding by the same processes. Otherwise, monitoring projects and making adjustments is inconsistent and creates confusion. Using construction project management software is the best way to implement the most effective strategies and ensure all team members are doing tasks the same way. Project management software creates this structure, and contractors can then teach subcontractors exactly how to use the tools.

How ProjectManager Helps With Subcontractor Management

ProjectManaager.com is a user-friendly, construction project management software that can be accessed from job sites or anywhere else you get work done. It’s important that subcontractors use the project management tool as it is for contractors. With our software, all subcontractors can view information, make updates and communicate with contractors on the go.

Successfully managing subcontractors requires a project management solution that puts all the tools you need in one place. With our Gantt charts, project managers can create timelines that layout their entire project in one view. Create milestones, link dependencies, and give your whole team a window into the project’s progress.

ProjectManager's Gantt chart

ProjectManager allows you to see all project details and check project status from one real-time dashboard that can be customized to a contractor’s liking. Check task progress, key metrics, upcoming deadlines and more. Then, create project reports in seconds that can be shared with the entire team.

ProjectManager’s dashboard view, which shows six key metrics on a project

ProjectManager is online project management software that has the tools you need for subcontractor management. Our features make planning, monitoring and reporting on your project more efficient and effective. Try ProjectManager free with this 30-day trial offer.

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