Subcontracting vs. Direct Hiring
For some construction projects, you may wonder when it makes sense to hire an employee or subcontract the job out. Many models in the industry suggest that subcontracting can be easier and faster than direct hiring, but even so, there is no one rule that is right for every situation.
When is a subcontractor needed?
Subcontracts in the construction industry are the preferred method of doing business used when affronting complex situations. Although it will require some additional legal steps and precautions, using subcontractors is a great way to manage a job without adding personnel and overhead costs. The top benefits of using subcontractors are:
- Useful if the project scope is too broad for the contractor
- Can free up resources and time so that you can concentrate on growing your construction business
- Typically less expensive than hiring a full-time employee
- Can reduce the payroll taxes and benefits paid
- Payment can be used as a tool to negotiate for completed and accepted jobs
- Can be used as needed and contracts can be terminated easily
When direct hiring is best
In some cases, hiring someone directly for a construction job makes more sense. Typically, routine and simple construction jobs are the ones assigned to directly hired employees. Direct hiring for construction projects will give you assets – your workforce. There are plenty of benefits to hiring someone directly:
- Company will have immediate results
- The rules are set by the employer
- The employee will provide continuity to your ideas
- The employee can provide additional services and serve in different construction trades
- Employees can be trained to do specialized construction jobs
- A direct hire can provide great input knowing the specific needs of your construction company
Whether or not to direct hire or use a subcontractor will largely depend on your project, budget, and how much specialist knowledge is required. In any case, it’s important that you have the right construction insurance to suit your project. Ready to get started on the right insurance? For the easy and convenient construction insurance services that you need, contact the experts at Artisan Insurance Solutions today.