If you have more freelance work or you need to supplement your IT and Non-IT staff, the solution is to hire subcontractors. However, before you make the offer, read these five things that are essential to hiring experienced subcontractors.
1. Take Responsibility
The action or inaction of your subcontractor affects you directly. The rule of the thumb for those who hire subcontractors is that ‘Everything demands responsibility.’ Even if you have delegated a task to a consultant or agency, you can be held responsible if they fail or underperform.
You don’t need to stay on their neck, but it is perfect to have periodic reports of the progress being made on the project. The onus is on you, not the subcontractor.
2. Ascertain your Subcontractors are Insured
While the first step is to be sure your subcontractors have the requisite skills to solve your business requirements; it is also crucial to verify their insurance proof.
It is recommended that subcontractors maintain personalized business insurance. These include premises insurance, Workers’ Compensation, Errors, and Omissions Insurance. These are relevant in a situation where litigation arises as a result of their work. This will enable you to leverage their policy if you are sued over their mistakes.
3. Include Subcontractors To Your Insurance Policies
In some situation, there may arise the need of adding subcontractors to your insurance policies even if they possess one.
When you hire an individual to work for you, your name and reputation are at stake. It is better to include the sub to the coverage.
Nevertheless, this inclusion may make it difficult to affirm if the individual is a sub or an employee.
4. Don’t classify your Subcontractors as Employees.
It is better to check for situations that may blur the line just like we already stated. Don’t legally classify your sub as an employee.
This is possible by ensuring your sub has different clients and can customize their working hours. The recent changes made by the United State Labor Secretary that enables employers to classify workers as employees vs. freelancers.
5. Utilize Contracts When Hiring subcontractors
Utilize subcontractor contracts in setting project requirement and to avoid potential dispute regarding deliverables and payment. Read our blogpost on the 7 Fundamental Criteria of Contract Management.
You don’t have to be burdened with the formality associated with utilizing contract. Make it simple and detail the points!