Take care of them and they will take care of you… that’s how it goes in the subcontracting world. If you subcontract out work to independent contractors make sure to treat them the way you want to be treated by your clients.
One of the biggest gripes that subcontractors have is not being paid on time. So if you hire subs yourself make sure to pay them on time. Once you create a corral of dependable sub contractors you can focus on growing your business. In fact using sub contractors can dramatically grow your business while keeping your costs low and leveraging your profit. But if you don’t keep your sub contractors happy and have a revolving door of staff, you can eat up any profits with retraining and having to follow behind unqualified helpers.
The key is to find excellent contractors, train them, and keep them. The longer a contractor stays with you, the more valuable they can become to your business. I’ve found these tips to keep subcontractors happy.
- Pay on time.
- Value their efforts.
- Give feedback and provide training.
- Be generous with your time on questions.
- Make sure you are paying a fair rate based on experience and effort.
If you’re a sub contractor, what do you hate most. Here’s my short list.
- Not being paid on time
- No feedback given on my efforts
- No training provided.
- Ideas and suggestions for improvement in services never enacted.
- No contact with the decision makers in the main office on policy that impact my work.
- Not being paid a fair rate based on experience.
If you have others leave them in the comments below I welcome you input.
Actually it is not really about the IRS, but about growing your business with contractors and keeping them happy to stick with you and grow your business together jointly benefiting, not about a legal issue. At least that is my point of view and how I treat my own contractors.
I just wish I would be treated by others the way I treat my own subs. I put them first and really work to build them, grow their income, and retain the right ones.
It appears that the concern is to keep the subcontractors happy so you won’t have to worry about the legal issues with worker misclassification. I see ongoing relationship written all over this. Many people have discovered that pay as an Independent Contractor is substantially greater and there is more flexibility, but how many companies truly check the business structure of subcontractors.
Your point about IRS clarification is well taken. You are right in that some sub contractors are really employees, so training to do a job in a specific way may move a sub contractor really to an employee class.
My gripe was really on no policy training, who to go to, who to ask, and how to improve the atmosphere in which a subcontractor works so that still leaves a sub as a sub and not an employee, but was not spelled out.
Thanks for your insight and input!
Hi Nancy,
Unfortunately, there is a fundamental flaw with a Subcontractor’s complaint about not receiving the proper training.
According to the IRS, training is a classic means of explaining detailed methods and procedures to be used in performing a task. Periodic or on-going training provided by a business about procedures to be followed and methods to be used indicates that the business wants the services performed in a particular manner. This type of training is strong evidence of an employer-employee relationship.
Granted, not all training rises to this level. The following types of training, which might be provided to either independent contractors or employees, should be disregarded:
• Orientation or information sessions about the business’s policies,
new product line, or applicable statutes or government regulations
• Programs that are voluntary and are attended by a worker without compensation