Advantages and Disadvantages of Subcontracting: Essentials for Construction Market Players

Many entrepreneurs stay unsatisfied with the quality of service. It can be explained by the low-level subcontracting options ordered by general construction contractors. Therefore, before choosing a repair and finishing company, you should understand what types of subcontractors exist, as well as their advantages and disadvantages.

For more convenient work, many specialists use construction estimating software. It is the essential digital tool when it comes to business scaling up and implementation of new technologies, approaches, or attraction of numerous subcontractors.

But is it reasonable to opt for subcontracting in construction? There is a range of benefits and weak spots to take into account. Let’s start with the critically important aspects that characterize the relationships between contractors and subcontractors in the best way.

Benefits of Subcontracting in Construction

Consider what are the advantages of the device under such a contract. This will help everyone look at their work situation objectively and make the right decision. This way both parties (including contractors and subcontractors) can pick sides with the most optimal form of cooperation.

Benefits of subcontracting include:

• The subcontractor is not obliged to obey the internal labor regulations and other local documents.
• No medical examination is required. You can immediately begin your duties. This saves time and is relevant for those who want to earn here and now.
• The employer cannot hold the contractor liable for absenteeism or other violation of discipline, since, under this agreement, the employee should not obey them. Such an employee has a fee schedule.
• The contractor may engage subcontractors. Of course, it is difficult to imagine this in labor relations. But for example, you can ask another person to perform some duties for you, but the performer will still be responsible to the contractor.

To sum up, subcontractors can count on limited responsibilities and transparent legal backgrounds. At the same time, contractors can save time and meet all the specified deadlines.

Disadvantages of Subcontracting in Construction

The disadvantages of working under such an agreement include:

• If the work is poorly performed, the contractor himself must compensate for all losses. At the same time, there is rarely material liability in labor relations. Low-quality subcontractors’ performance is a headache for general contractors.
• The employer does not care about the workplace, materials, and equipment. If the parties have not agreed on this, then the contractor himself is looking for everything he needs for work.
• The general subcontractor is not obliged to pay twice a month for the work. Salary for the subcontractor after the completion of the entire volume.
• Payment is for a specific result, not for the hours spent at the workplace. 
• No security. An employee cannot be sure that he will have a job tomorrow. Accordingly, there is no possibility to build long-term plans.

Summarizing all the weak spots, contractors risk getting poorly performed work and losing time together with money. The reputation of the construction company suffers from incompetent hired specialists as well. At the same time, subcontractors usually have more benefits from signing contracts with GCs.

Is Subcontracting Worth It?

This type of relationship is suitable for narrow-direction specialists who do not want to be officially employed. The purpose of such a contract is to perform one-time work. It was designed specifically for short-term relationships. 

It is often beneficial to the employer because the employee does not have to provide the numerous guarantees that are required by the employment agreement. It does not protect the worker. The latter cannot apply to the labor inspectorate for the protection of their rights.

If you have entered into such an agreement, but in fact, you work as an employee, then you can retrain it into a labor contract by going to court. Usually, all doubts are interpreted in favor of the employee.

The choice is always up to the person to agree or not to such conditions. Often people sign such a document without knowing all the subtleties. It is more beneficial for the employee to formalize long-term relationships by the law.