A large number of company owners couldn’t function without the help of subcontractors.
You may take on more projects than you would be able to without the help of a reliable subcontractor. When compared to the expense of recruiting full-time workers, the employment of subcontractors may significantly reduce a contractor’s overhead. When working with a subcontractor, the general contractor is exempt from covering the subcontractor’s costs for equipment, workers’ compensation, liability coverage, and taxes. A construction business may seek out a subcontractor for a wide variety of tasks, such as excavation, carpentry, flooring, wiring, drainage, and more. For steady employment, subcontractors may form partnerships with general contractors.
Independent contractors – a rapidly growing piece of the workforce – can often achieve the best quality of life. They can choose where they work, whom they work for, and for how long.
Maynard Webb, Founder (Liveops)
With the increasing shift of the global market towards the gig and freelance economy that provides more freedom and opportunities to the workforce, it has become essential for construction organizations and subcontractors to forge and maintain long-term relationships with subcontractors. They both need to build a framework that allows them to ensure effective communication, work visibility, and complete transparency. KanBo construction project management software digitizes the processes enabling subcontractors to reduce ‘work about work’ and focus on business growth and project deliverables. This puts them in a better position to gain a competitive advantage in a challenging economy.
The Role of Subcontractor in Construction
In construction, a subcontractor is an individual or business that works under the supervision of the general contractor. Subcontractors usually operate as freelancers or small businesses and charge for their skills. A contractor is someone who knows their way around a job site and has a thorough grasp of the big picture, whereas a subcontractor is someone who knows their way around a particular aspect of the job.
Their services will be sought out by contractors that need help with specific aspects of a larger project. In a new construction project, for instance, the contractor could hire a separate crew of electricians to handle all the wiring. Even though subcontractors aren’t officially workers, if they do an excellent job, you’ll hire them frequently. Subcontractors are like normal employees in that they require direction and payment on schedule. Therefore, you usually need a system for efficiently dealing with them.
No formal schooling is required to be a construction subcontractor since the term covers such a broad range of skilled laborers. For instance, painters might learn their craft on the field, whereas plumbers can participate in an internship or a trade school. However, subcontractors in the construction industry who have obtained appropriate licenses in their chosen profession may negotiate for and earn higher rates of compensation. The majority of general contractors only consider proposals from qualified, insured subcontractors.
The need for a license varies not only from one state to the next but also from one municipality to another. A competent subcontractor in the construction sector should be capable of comprehending blueprints and have a general understanding of building practices outside their area of expertise. To succeed as a subcontractor in the construction industry, you’ll need a basic familiarity with business management. The reputation for trustworthiness and integrity must be maintained when developing and keeping work connections with other workers and construction firms.
The subcontractor is supposed to be accountable for organizing and handling the job that has been given to them. The subcontractor has to have previous experience collaborating on contracts that need an in-depth understanding of construction processes and construction project systems to meet business requirements. Detailed job tasks include:
- Offer help with many aspects of contracting, such as projected costs and timetables.
- Help laborers and workers understand how to accomplish their tasks in a manner that complies with the company’s policies as well as regulatory requirements.
- Conduct site assessments using approaches that have been authorized.
- Evaluate the terms of contracts with the specifications.
- Carry out associated duties within the parameters of the area of duty allocated.
- Conduct a thorough review of all of the necessary paperwork from the suppliers.
Contractors and Subcontractors: Key Distinctions
Holistic versus Specific Expertise
Both contractors and subcontractors serve businesses and individuals as clients, but that’s not the whole story. Contractors are responsible for the entirety of a project, whereas subcontractors focus on a specific aspect of it. Therefore, contractors may be well-versed in a wide variety of fields. To efficiently oversee a construction project, a construction contractor, for instance, has to have some basic knowledge in a wide range of related fields, including electronic wiring, drainage, wall assembly, and more. In contrast, subcontractors are experts in their field. They will likely have a thorough understanding of a narrow topic. The plumber may not fully understand plenty about electronic wiring, but they will nevertheless know all there is to know about the plumbing requirements for a building.
The Extent of Accountability
There’s also the fact that the contractor, and not the client, bear the burden of fixing any difficulties that arise during a large-scale project. If there is a problem, the customer wants someone who can take responsibility and explain what happened. Anything linked to a subcontractor’s work or involvement in the project falls under this category. As such, the contractor is still responsible for communicating any issues with the electrical engineer’s work to the customer and, if required, having the client make the final decision on how to proceed. Subcontractors are responsible to the main contractor, not the end customer.
It’s the same deal with money. In most situations, the contractor will be the one to pay the subcontractor, rather than the customer. When the subcontractor’s job is finished, the general contractor submits an invoice to the customer, including a markup to cover the extra labor required due to the contractor’s oversight.
Approaches to Acquire New Business
As a final point, contractors and subcontractors often use different methods to discover new projects. A contractor’s approach to acquiring jobs is entirely internal. They require a solid understanding of the future emergence of major projects, which might be government or private sector contracts. When a project is awarded, the contractor must be able to effectively manage their clients or employ a capable individual. Subcontractors rely heavily on their relationships with general contractors for business, thus they must participate actively in industry groups and develop their professional relationships.
How Subcontractors Can Perform their Best Work
The first step you must take is to make it clear what exactly you will be responsible for and what kind of level of service you anticipate providing them with. When you work as a subcontractor, you shouldn’t just trust that they’ll automatically know what to expect. Investigate the particulars of the project, including the deliverables that must be executed, the actions that must be completed, and the individuals who are responsible for the charge of each assignment. It is essential to prepare a contract that details all of your obligations as a subcontractor. This is the best way to ensure that they understand the scope and that compliance will be enforced. The following is a list of the most important components that should be included in the contract as a subcontractor:
- The phrase “scope of services” refers to an overarching explanation of the subcontractor’s function in the overall project (for example, drywall and HVAC installation, plumbing, electrical wiring painting, and so on)
- Obligations you have as a subcontractor, including communication with general contractors, management of experts, adherence to worksite safety standards, maintenance of equipment, and quick reporting of safety mishaps and risks
- Specifics about the deliverables, such as an explanation of the tasks for the subcontractor to complete, the specifications for the materials, and the deadlines
- Quality standards provide the specifics of the general contractor’s expectations concerning the security and technical aspects of a completed construction project.
- Other essential contract terms, such as payment, the start and end dates of the contract, and the appropriate handling of personal information, are also included.
Challenges of Subcontractors in Construction
Working capital issues, coordination with clients, and skills shortages are perennial challenges for subcontractors. It’s unusual for a general contractor to undertake all of the primary and secondary tasks involved in a construction project. As a result, many organizations rely on external parties, known as subcontractors, for the administration and execution of task-specific activities.
To be sure, this is more complicated than just outsourcing a single task. In reality, when a subcontractor takes on a subset of a project, they also assume the associated risks and obligations, such as those associated with maintaining a steady stream of funds, procuring the required resources such as workers, supplies, and machinery, planning out the project’s work process, managing employees’ time and salaries, ensuring compliance, and accumulating and arranging all relevant paperwork.
Incorporating Digital Technology
For continued success in today’s construction market, it’s essential to use portable and cloud-based technologies. However, combining these technologies is not without its difficulties. Instead of disrupting operational functions, the technology should help you streamline how your business does things. To avoid a backlash from seasoned workers who are skeptical of the value of technology, it’s best to phase in the new systems gradually rather than all at once. This remains one of the major challenges for subcontractors in construction.
Absence of Sufficient Labor Supply
While cutting costs by operating lean has its benefits, it may also cause delays in the completion of a project. It might be tough to hire unskilled workers while the economy is doing well. When a leading subcontractor in a craft finds himself short on experienced workers, even seasoned fill-ins might struggle with this at times. When this occurs, the work quality declines, the customer complains, and the general contractor has to bear all the responsibility. Keeping the general contractor satisfied is one of the major challenges of a subcontractor.
Breakdown in Communication
Maintaining open lines of communication is essential to running a smooth ship. When people are unable to express themselves, they are unable to collaborate effectively. Consequently, better communication may greatly simplify processes and boost precision. When subcontractors utilize digital and cloud-based technologies, they may better connect the field with the office, allowing for constant, up-to-the-minute communication between all parties involved in a project. Having this information at their fingertips helps project supervisors and managers keep their eye on the ball and make sure their projects are on pace to finish when they should. Improved project communication directly leads to having options without requiring up-front resources for initiatives.
Protecting People’s Health and Safety
Even though health and safety should always be a top priority on a construction project, they frequently take a back seat to cost overruns and missed deadlines. Accidents and illnesses sustained on the job might cause significant delays in completing a task. This creates difficulties and extra expenses on most projects. It is the responsibility of contractors to foster a safety-oriented culture and offer continual training for employees. Efficiency can be increased, and top personnel can be attracted by maintaining a well-functioning safety program that incorporates the most up-to-date construction safety practices.
Cash Flow Management
Your remuneration as a subcontractor can only be as reliable as the documentation allows. The subcontractor may have problems being paid for his work if he doesn’t keep complete and precise records of his efforts. Because of this, it’s crucial to retain extensive documentation that can be viewed and maintained in real-time, whether you’re in the office or out in the field.
It can be challenging for a subcontractor to keep up with the ever-evolving regulatory landscape to ensure that he is always operating lawfully. Subcontractors need to read construction-related articles and periodicals regularly to stay abreast of headline news that could have an impact on their operations. Subcontractors not only incur additional expenses due to the time spent trying to keep up with the regulatory requirements but also due to the time spent in the field complying with the legislation.
The subcontractor is accountable for a significant volume of paperwork and records, all of which may quickly become unmanageable if the subcontractor continues to rely on hard copies and outmoded procedures. Using a digital and cloud-based solution like KanBo, a subcontractor can have instantaneous availability to any memos, papers, images, and other data they may require. Using simple documents and, more significantly, swiftly monitoring the most up-to-date copies, could save them the hassle of any pause or rework which is a constant risk of conventional records management.
Limitations Imposed By Time Limitations
Subcontractors often fall behind the deadline because of the availability of more complex projects. Many have responded to this challenge by investing in project management tools that streamline routine tasks and save time. Subcontractors are now able to accomplish more with fewer resources thanks to improvements in project management brought about by simplified collaboration, real-time data processing, and user-friendly field technologies.
Construction Subcontractors Have to Meet the United Nations’ Sustainable Development Goals
The construction industry’s climate goals cannot be achieved without a shift toward more environmentally friendly production and consumption patterns. Construction firms as well as subcontractors need to prioritize climate and environmental concerns if they want to overcome the current obstacles and problems. This is particularly true when taking into account the fact that millennials place a greater emphasis on ecological and environmental issues than their older counterparts.
To reach decarbonization goals in the coming years, creative approaches will be needed even if the current infrastructure and economic models can drastically reduce emissions. The methods used for recruiting and terminating employees are only two examples of the numerous places where novel solutions are needed to maintain sustainability practices. The demand for high-quality, practically applicable digitalization will grow as more advanced technologies become more widely available.
The United Nations Department of Economic and Social Affairs established Sustainable Development Objective 9, and the building industry is crucial to achieving this goal. As a result, it inspires MNCs to put money into improving the world’s infrastructure so that more people may reap the rewards of economic growth and industrialization. Companies need to foster an atmosphere that welcomes and encourages innovation, so they’re taking steps to do just that. The following paragraphs detail some sustainability goals that businesses and individuals in the construction sector should strive to achieve.
- The development of environmentally friendly infrastructure via public-private partnerships (PPP) and other similar initiatives. Companies should have a larger role in planning and running new transportation infrastructure.
- Components of this program include • a growth in spending in healthcare-related property investment; the advancement of health and safety in the workplace; the delivery of medical treatment; and the facilitation of activities meant to encourage collaboration. To help improve the neighborhoods where they operate, construction companies should participate in corporate citizenship and sponsorship initiatives.
- Every working person should have the chance to help build and lead educational institutions. Corporate social responsibility and sponsorship initiatives, for example, may help businesses foster the next generation of top-tier employees.
- It is essential to coordinate the development of water supply infrastructure, wastewater treatment and disposal infrastructure, and flood protection and treatment facilities. Companies should make zero effort to harm the environment during construction.
- To lessen the environmental effect of energy infrastructure development, green building practices and sustainable materials should be included in the design process from the start. The construction industry must lead the way in envisioning and managing initiatives that make use of renewable energy sources.
KanBo Enables Full Construction Lifecycle Management for Subcontractors
KanBo is a comprehensive project management software that provides a system for the construction sector that helps subcontractors and their teams better estimate and oversee a wide array of projects, collaborate in real-time, create and implement action steps, produce documents and on-demand analyses, troubleshoot and fix problems, and incorporate a wide range of powerful construction software and tools for improved and standardized implementation.
Facilitate Projects that are Led by Solutions
Subcontractors are given full authority in KanBo, allowing for streamlined everyday reporting, centralized management of project documents, and streamlined collaboration. Subcontractors can accept orders only when it is feasible to carry them out, and all of these procedures can be handled centrally, providing real-time visibility into the condition of the firm.
Optimize Time Management and Planning Procedures
By using KanBo, subcontractors can coordinate and monitor the efforts of several departments, teams, and vendors toward a common goal. Any demands from the ground that may affect the project’s budget, timeline, effectiveness, or safety may be assessed and responded to by the team.
Increase Field Output and Ensure Accurate Projections
For megaprojects, KanBo’s rapid transparency and traceability allow subcontractors to speed launch and facilitate smooth project handover. They can streamline time tracking, improve the ordering process, address critical problems, evaluate and approve proposed changes, develop actionable strategies, and negotiate modifications. Thus, they are in a better spot to oversee the order process and verify price adjustments in a timely way.
Guarantee Productive Cooperation and Discussion
KanBo’s construction management platform facilitates efficient cooperation by serving as a two-way communication link between the project’s various stakeholders, such as owners, advisors, subcontractors, and designers. They can prepare and distribute reports (NODs, NCRs, EIRs, and CVIs) that focus on achieving a certain goal and discuss safety protocols, project scope, and any hazards before starting construction.
Coordinate and Streamline Design and Execution
Subcontractors can benefit from improved time planning and management thanks to KanBo’s centralization of ITPs. The ability to easily record, allocate, and retrieve concerns allows for stress-free design cooperation.
Supervise Quality Strictly to Avoid Any Threats
To avoid delays, it is important to anticipate potential problems, investigate them, and take corrective action. Using KanBo, subcontractors can reduce risk across the board, keep all insurance plans in one place and implement health and safety inspections.
Take Charge of Record-Keeping and Informative Reporting
By putting subcontractors in charge of all project documents, KanBo speeds up turnaround and maintains constant communication between the office and the field. With constant access to the most recent versions of project documentation, it’s possible to complete tasks with pinpoint accuracy. If you want to keep tabs on how things are going or need some insights for decision-making, KanBo has you covered.
Ensure Proper Construction Software Integration
To help subcontractors get an edge in a highly competitive market, KanBo supports native integration with a wide variety of construction software and equipment.
KanBo’s Construction Management Provides Subcontractors the Control They Need
The ability to handle all aspects of a construction project in one location is a major competitive advantage for not only construction companies but subcontractors as well, and KanBo provides that capability. KanBo’s project and data management system may be tailored to meet the needs of any size construction business.
As a result, construction companies no longer have to erect roadblocks for their employees to cross to share ideas and information freely and develop ground-breaking new products and processes. KanBo may be easily incorporated into existing organizations, even those with well-established structures and chains of command.
Using KanBo, employees may have quick access to company-wide information including goals and projects, jobs and employee skills, and company-wide announcements. Top management may establish an information and operations hub online, using a system that supports agile work and knowledge management. In the construction industry, top-level managers will now have instantaneous access to data and analytics presented in a highly visual format. A quicker and more precise decision-making process may help an organization’s innovation strategy.
KanBo Was Created to Help Non-Savvy People Become Programmers
We’ll focus on two benefits of low-code methods here: faster application delivery and less dependence on human coders. Non-developers like project managers and business analysts may now participate in the app development process. Non-technical employees may be able to have a greater impact if IT backlogs are reduced and shadow technologies are eliminated. Increased productivity inside the knowledge management system may be attributable to the use of novel technological techniques.
Neither expert programmers nor software novices need to know how to code to create their own applications. For business executives who lack coding skills, meeting their duties head-on might be challenging. In comparison to traditional coding methods, KanBo’s main benefit is a significant cut in the time required to create apps. Due to the scarcity of in-house software expertise and the rise of remote workers, more and more companies are turning to these platforms for assistance.
KanBo’s Workflow Management Is Commonplace in the Information Sector
An action is said to be a process if it can be broken down into smaller, more manageable steps that are executed one after the other. Human resources and employees may benefit from KanBo’s knowledge management features since they enable more effective project administration. Weighing the program’s features against their limitations, collaboration across teams and departments may be facilitated.
While some of the difficulties that subcontractors face have been there for years, others are only now coming to the surface. These problems have been around for a long time, but they are still relevant today and will have an impact on the way subcontractors operate their businesses. During the performance of duties, subcontractors are subjected to both external and internal influences, to which they are required to respond. They are accountable for their crew, the general contractor, and any demands from the outside world, including the environment, the legal system, and the authorities. This poses a wide range of challenges for subcontractors that they need to overcome.
KanBo provides subcontractors and their teams with a complete work and information management framework that helps them in maintaining proper work visibility and operational transparency. They can create a collaborative work environment where communication channels are always open so teams can stay on top of their game. With KanBo, subcontractors no longer need to rely on paper documentation as everything can be managed, stored, and instantly accessed from a central database. All in all, KanBo construction project management software gives subcontractors a competitive edge in a highly cutthroat economy.