4 Tips To Hiring Quality Subcontractors In An Increasingly Competitive Market
Residential construction is a simple but complex industry, highly dependent on relationships. Think about the number of successful relationships it requires to build a single home — between builders and owners, builders and subcontractors, subs and other subs, contractors and suppliers, as well as suppliers and manufacturers. A failure in any one of these relationships can cost everyone time, money and opportunities for business growth and success.
Finding & Keeping Quality Subcontractors
One of the most important relationships affecting the quality and cost of a home is the relationship between builders and their subcontractors. Trades make a major difference in the overall process, quality, efficiency and cost of building a home. If you can hire great trades who are loyal to you, this makes your product better and improves your customer satisfaction.
Today, America is facing a serious skilled labor shortage and has been for some time. During the 2007-2009 recession, countless contractors went out of business and never recovered. Many were multi-generational family businesses. The trades lost many veteran workers plus years of potential worker training. Meanwhile, cultural pressures have increasingly emphasized college and stigmatized technical training. Younger generations are less likely than they once were to view skilled trades as the positive career choice they can be.
The trade partner shortage makes the process of finding, hiring and retaining top talent more challenging than ever. First, you need to have the right information to choose a quality contractor and — hint — that goes far beyond their cost estimates. Then, you have to make yourself into a “builder of choice” for these top trades.
Almost every builder these days has the business acumen to strategize the customer journey. But far fewer think carefully about their trade partner/subcontractor journey. Why is this important? With today’s sub shortage, you can be sure that every day, your best trades are facing choices. If your framer has two jobs they could be working on today, for two different builders, will they choose your job over another? That decision will affect the timeline and cost of your entire project, so you should be doing everything you can to make sure you are their top choice.
Tips For Hiring Quality Subcontractors
A recent Home Building Hero podcast featured a conversation between David Belman, President of award-winning Belman Homes, and Dr. Felix Vasquez, the Chief Executive Officer of Hyphen Solutions. In this podcast, Dr. Vasquez shared his tips for hiring and retaining quality subcontractors, with the help of cutting-edge technology.
Look For Online References
Several online databases or searches can identify subcontractors in the field, local to the communities and project locations that you need reliable trades. The Contractors Blue Book is a well-known example.
Builders on the Hyphen Platform have access to a feature of BuildPro called Hyphen Trade Finder, which provides a wealth of additional, valuable information. Trade Finder includes subcontractors’ and suppliers’ years in business, categories of service, contact information, relative size and number of completed projects, as well as references from builders they have worked with. These vendors are part of the BuildPro system, so you also have peace of mind, knowing they are well trained in current technology applications.
Don’t Just Take the Cheapest Bid
Look for a bid with the appropriate details first, so you know that you are comparing apples to apples. A good bid will clarify the scope of work and break down parts and quantities. It should also include language on warranty, service and replacement, showing that the sub is dedicated to ensuring a high-quality job.
Anything that can help you determine the quality of their workmanship is helpful. Today, many trades use Field Automation Tool Sets that include the ability to fill out checklists and take pictures of work in progress as well as completed work. This enables them to reliably document the high quality of their installation and service work.
Know that sometimes a cheap estimate will cost you more in the long run. Choosing a substandard trade partner can result in delays in construction, poor quality workmanship, improper installation or poor warranty and customer service. These problems cost more to fix than a quality subcontractor may charge to do the job well and efficiently from the outset.
Make Yourself the “Builder of Choice”
If you know there are more jobs out there than there are subs to perform the work on any given day, how do you make sure the best subs want to work on your jobs? Look at your internal processes, because your subs will be doing the same. As for-profit enterprises, they will be looking to see:
Do you offer good/up-to-the-second scheduling information? Subs want to see in advance if the jobs before theirs have been completed or if they are still in progress, so they don’t waste their valuable time waiting around.
Can they get this scheduling information on their mobile phones, in real-time? No one wants to waste time and effort driving to the job site to see if it’s ready for them.
Do you pay on-time, every time? These companies are trying to grow and paying consistently and reliably builds trust. It isn’t to their benefit if you’re holding on to their working capital.
Can your subs see approval and payment status for all the jobs they are doing for you on their phones? They want to know their cash flow outlook, and they want to be able to identify any payment problems or discrepancies immediately so they can work to correct them, preferably quickly and easily.
If your trade partner journey doesn’t include these key benefits, your subs will be looking for them elsewhere and picking other builders’ jobs to do first.
Perform Regular Check-ins With Your Trade Partners
Delays in construction, poor quality workmanship and improper installation are some of the issues that affect job timelines and cost. You need a system that not only alerts you to these issues but enables you to analyze if they occur rarely or more frequently; if they happen only with one particular crew or throughout a company; or even if they are occurring across vendors. Cross-vendor issues may imply that your own processes or designs need to be revisited, and a solution needs to be developed that works better for you and your subcontractors.
However, you need more than to have this information at your fingertips. You need to share it. If you aren’t meeting regularly with your most crucial subs, it’s likely someone else is. One good practice is to put out a regular vendor scorecard, so your subs know how you think they are performing. You can take your game up another notch by also sending them a builder scorecard that acknowledges your own issues. Ask them if there are things you are doing that make their jobs harder and how you can improve. All of this lets them know that you are working to improve your operational performance too. This strategy may sound unusual, but what would you think if someone gave you an unsolicited grade of their performance in a service to you? How would you feel if it was open and honest and reflected a desire to improve their entire supply chain?
People want to work with an organization that is self-aware and willing to improve. Even if the status quo is fine now, a learning organization will find ways to surpass the competition and continually improve their business. We know that a rising tide raises all boats, and the best subs will want to align with a company that is on an upward path.
Find The Right Trades With Hyphen’s BuildPro Software & Hyphen Trade Finder
Hyphen’s BuildPro solution takes construction scheduling and supply chain management online, providing real-time information with greater accuracy and efficiency. BuildPro enables home build projects to be executed in less time and with less effort than ever before.
As an included feature of BuildPro, Hyphen Trade Finder is built to help residential builders find good trades and subcontractors highlight their services to a broad base of home builders. Company profiles include information such as areas of expertise, area codes of operation, years of operation, number of employees, promotional statements and more.
A Hyphen product that can help you make yourself a “builder of choice” is Hyphen Wallet, an advanced invoice and payment management solution designed specifically for residential construction companies. Not only can Hyphen Wallet reduce costly and time-consuming processes for your company, it also offers your trade partners multiple benefits. These include choices in how they want to be paid and real-time information on the progress of their invoices and payments.
Schedule a demo with Hyphen’s professional services team today to learn more about all of our BuildPro products and features and how they can transform your business operations.