How to Take on More Work Orders by Hiring Electrical Subcontractors
The electrical field service industry is a rather competitive sector. No matter where you are located, chances are you must keep up with more than one rival to establish your business. However, being an essential service to the community, there will be no shortage of clients if you can manage your operations properly. And one sure strategy to grow your business is to expand your customer base.
Learn how to hire subcontractors so that you always have the right number of technicians and subsequently, attend to all the service requests you might secure.
In this blog, we will explain the difference between employees and subcontractors, the benefits of subcontracting, how to find electrical subcontractors for hire, and also the most crucial aspect— how to manage your subcontractors with electrical service scheduling software to grow your business.
Table of Contents
1. Why Should You Hire Subcontractors?
Growing a business involves a lot of challenges. This is especially relevant in case you are just starting a new business. The major challenge in this regard is to maintain profitability. That is to say, you might struggle to pay off your staff and keep your profit margin at the same time. But if you manage to take on more work orders, all your problems will be solved.
This leads us to the central focus of this blog—how to take on more work orders? But remember, securing an increasing number of customers will not do the trick alone. You also must carry out the job perfectly. Naturally, this may not be possible for a new electrical com to meet all these requirements with their limited resources. The solution, therefore, is to hire electrical subcontractors.
By hiring subcontractors instead of your own technicians, you can take on more jobs with fewer overhead costs. This will eventually result in efficient job completion in less time. Furthermore, you can focus on acquiring more customers without worrying about whether you’ll have enough technicians to visit the job sites and get the job done in time.
2. What is the Difference Between Employees and Subcontractors?
Your employees are members of your team that works for you on multiple jobs. The wage you pay them reflects their total hours, regardless of the total work they do. This also includes paid vacations, health benefits, and sick time.
While working with your employees, you must also keep track of the cost of their supplies, the items they use on the job, and any untoward incident that might require compensation.
On the other hand, an electrical subcontractor is an agency or individual that you can hire to complete specific electrical installation and maintenance jobs. The catch is—you pay a subcontractor a fixed rate for the job instead of paying them a fixed salary or hourly wage as you would have paid your employees.
As you receive a work order, you hire a subcontractor instead of appointing your technician to get the job done. They will visit the job site on your behalf and carry out the necessary task. But it is you who will receive the payment from the customer. Then, you would settle their payment as per the discussed rate and keep the profit for yourself. Besides, the subcontractors typically pay for their own supplies and line items which they include in the final price. This means you will have fewer overhead costs to worry about.
Apart from the wage part, you don’t even need to pay the extra cost such as health benefits or paid time to your subcontractors. It is their employer’s responsibility to take care of the non-wage compensation. You only have to pay them for the specific jobs they have done, not the total hours they have worked for you.
While having your own employees could be a great thing as you can rely on them for the longer term, hiring subcontractors is an effective way to grow your business in a limited time, especially if yours is a new company.
3. What Are the Advantages of Hiring Electrical Subcontractors?
Hiring electrical subcontractors can help you overcome a host of challenges in running your electrical business. The most significant of them are the following:
- Cut back Business Expenses: Most subcontractors manage their own workforce, bring their own supplies, and support short-term projects. This means you don’t need to bear the expenses of supplying materials. You don’t even have to pay non-wage compensation. Besides, you will be paying your subcontractors based on individual projects, not the total hour they have worked for you. Evidently, there are fewer overhead costs you’ll have to consider if you hire subcontractors compared to working with your own technicians.
- Expand your Business: Efficient Electrical contractor scheduling is the key to your business growth. But if you rely on your regular staff, you may fall short to take on more work orders. By hiring subcontractors, however, you can expand your resource pool with the enhanced skill set they bring along to your business. As a result, you might take on a wide variety of work orders which would have otherwise been impossible for your limited expertise. Besides, you can also expand your service area by hiring subcontractors from different locations, thus extending your clientele even further.
- Balance Seasonal Workflow: For an electrical business, the workflow varies from time to time around the year. Now, if you are short on staff, you will have to let go of several business opportunities if there is an increased demand. On the other hand, if you hire more technicians to meet the increased demand, you will be overstaffed during off-seasons, with the risk of not being able to afford the extra cost. But if you hire subcontractors for specific jobs, you will always have the necessary resources to get the job done without spending extra money.
- Win More Contracts: Subcontractors tend to work faster than your regular technicians since they don’t get paid by the hour. Therefore, if they get the job done soon enough, they can move on to their next project. Naturally, you can also take on more work orders since one project will not take long.
All in all, hiring subcontractors for your electrical business will result in the increased capability of taking on more job orders at a time, efficient completion of tasks, and a growing customer base with excellent feedback, all of which translate into the most important aspect of doing business—more profit.
4. How to Hire Electrical Subcontractors?
It takes time and effort to find skilled electrical technicians. But if you approach the task strategically, you can easily find the best ones available in your area. Here is a step-by-step guide to choosing the right subcontractors:
1. Create the Perfect Job Posting: The first step to hiring the best resources is to let them know that you have a job opportunity. And the best way to do that is by writing a job posting with every necessary detail. Describe the job, mention the details, state your specific requirements, and of course, list the skills and experiences you are looking for.
Once you write the job posting, share it everywhere. But most importantly, don’t forget to share it on the most effective communication channels including
- Job portals like Monster, Indeed, etc.
- Your company website
- Your social media channels such as Facebook business page, Instagram, Twitter handle
- Job fairs and trade shows
- Community bulletin board
2. Network with Electrical Professionals: Don’t wait for people to stumble upon your job posting and contact you. Keep communicating with other professionals in the field. Talk to other electrical contractors and ask for recommendations, reach out to your industry contacts, ask your former colleagues, join Facebook groups where professionals in your area network, and talk to anyone you think might have the resources to help you out. The more people you communicate with, the more likely you will hear about the right fit for your job.
3. Shortlist Potential Candidates: Once you have successfully got the word out, applications will start pouring in. Of course, you must check if their estimate fits your budget. But there is more that you should consider before you finalize the contract. Apart from the obvious factors of quality and flexibility, look for subcontractors who
- Value your company vision and work principles
- Do not require additional supervision or training
- Provide their own equipment and materials
- Have relevant experience
- Accept job orders of all sizes and budgets
- Have a good reputation and excellent customer feedback
Once you find someone that checks all the boxes, go ahead and seal the deal.
4. Shortlist Potential Candidates: Verbal confirmation is never enough when it comes to doing business. Before your subcontractors start the job, make sure to have all the necessary agreements signed by both parties. A subcontractor agreement is a legally binding document that outlines how you and the subcontractor will collaborate and points out responsibilities to eliminate any further conflict. This agreement also protects your business in case the subcontractor does not meet the specified obligations
Along with the obvious agreements and specifications, make sure your subcontractor agreement also covers the following points:
- Scope and duration of the job
- Contact details of both parties
- Payment terms
- License and insurance details
- The course of action in case of any legal dispute
Avoid using templates found online to draft the agreement. Every job is specific and so should be its agreement. Also, refrain from writing it on your own if you don’t have the necessary legal expertise.
The wisest course of action here is to consult a lawyer and draft an agreement that protects the interest of everyone concerned.
5. Finalize the Payment Method: Most subcontractors ask for an advance payment to confirm the work order. Usually, you might have to pay 50%-60% of the amount upfront. Your subcontractors will use this amount to cover the expenses related to materials, equipment, and other supplies required for the job. While the amount may seem a lot, it is necessary to ensure a quality service from their end. Besides, you will still be paying less than what you would have to spend in terms of wages, compensation, and other overhead costs.
Make sure to finalize the amount that you’ll be paying as an advance. Also, make it clear how you are going to make the payment (e.g., online payment, cheque, bank draft, etc.).
5. How to Manage Your Subcontractors
Typically, your subcontractors will complete the task on their own without any training or supervision. But it is still wise to keep an eye on them to monitor their work progress. Besides, things might go out of hand if you are working with multiple subcontractors on multiple projects. It becomes imperative then to keep things organized.
In simpler words, you must make sure which contractor is working on which job, when they start, when they are likely to complete the job, etc.
This might sound like a handful. And if you are still running your business based on the traditional paper-based system, it would indeed become a mammoth task to manage. However, now you have advanced digital tools and technologies to help you in the process. You can take advantage of cutting-edge electrical service work order software to manage your work orders and keep track of your subcontractors.
The best choice in this regard is Field Promax. This is one of the leading field team management software that automates and streamlines your business process. It makes every step of your business easier.
With Field Promax, you can create estimates, turn them into work orders, schedule subcontractors, monitor work progress, and send invoices directly to the customer.
Hiring subcontractors is an excellent way to grow your electrical business. It effectively helps to increase your productivity and profitability. Knowing how to hire subcontractors will make more room on your calendar to take on more work orders, cut down overhead costs, and manage seasonal workflow. And if you have a smart electrical service management software like Field Promax at your service, managing subcontractors becomes easier than ever. So, don’t waste your valuable time second-guessing. Sign up for the free trial to get prepared for your next gig.