When work volumes surge, or when you simply have a project you don’t have the skillset for, hiring subcontractors is one path you may consider. However, before you do so, it is best if you know not only the advantages of hiring subcontractors but also some potential issues to watch for. To help you with this decision, here are some pros and cons to consider:
The Advantages of Hiring Subcontractors
Increased productivity is probably the main reasons you would opt to use a subcontractors. As practice shows, you can’t multiply your capacity with that of your subcontractors because the more people work on a project, the more communication overhead exists but the idea is that with their help you will be able to finish more work in less time.
Offer Clients a Broader Range of Skills
The diversification of skills you offer to your clients is another major reason to use subcontractors. Even if your skills are in many areas, almost always the skills you have in one area are sharper than the ones you have in other areas. For instance, if you are a designer who codes but coding comes second to you, it makes sense to hire coding help. It makes even more sense to hire help for stuff you are not good at all – for instance copywriting or SEO. This way you broaden the scope of projects you can take on and positions you better on the market.
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Working with Subcontractors is More Efficient
As I mentioned, you don’t necessarily hire subcontractors only for tasks you can’t do personally. You can hire them for tasks you can do but simply don’t have the time to do on your own. A good reason to hire subcontractors is if you pay them less than it would take you to achieve the task personally.
For instance, you can code but you aren’t very good at it and it will take you two days to write a simple script. You make $100 a day on average, so it means this script will cost you $200 in lost profit. Mostly, this is due to your limited experience as a coder because an experienced coder can finish the same script in just a couple of hours for $50. In this case, if you hire coding help, you will save the two days you would have lost in coding attempts, which means you lose only $50 but don’t lose the other $150 you would have lost, if you did the job yourself.
More Flexible than Hiring Permanent Employees
Another benefit of hiring subcontractors is that this gives you more flexibility than hiring permanent employees. You hire contractors for a project or two and after that everybody goes their own way. With employees it is much more difficult and you might end in some legal trouble if you dismiss them, thus leaving you with the option to pay them a salary even when you don’t need their services anymore.
Additionally, when you don’t hire help permanently, in many cases you don’t pay benefits, while with employees this usually isn’t the case. However, you do need to check this in advance because legislation varies extensively. Ask an accountant about what is applicable in your jurisdiction.
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Could Be More Beneficial in Terms of Taxes
Tax legislation varies worldwide, so don’t take for granted that the money you will pay to subcontractors will relieve your tax burden. But more often than not it will. An accountant who knows your applicable laws is the person to contact for answers to this question.
Disadvantages of Hiring Subcontractors
One of the first things you notice when you start hiring subcontractors is that this increases the time you spend communicating. Most often, you need time to answer your subcontractors’ questions, check their progress, and review their submissions. It may turn out that this takes up much more time than you bargained for. Your overall productivity might suffer.
You Need to Plan in Advance
You can minimize communication overhead if you plan the tasks in advance and give your subcontractors a detailed task description. However, this also takes time! Sometimes it is easier to do the task yourself than to plan it in details in advance and then pass it on to somebody else. If this is the case, subcontractors are of no use to you.
Quality Could Be an Issue
If you work with the same subcontractors over and over again, you will come to trust and rely on the quality work they do for you. But when you work with someone new, you just never know what to expect. I’ve had one or two cases where I was shocked by what I got. I did give detailed instructions, the subcontractor didn’t ask me any questions before the delivery and when I was presented with the deliverables, I was just speechless – we obviously had two very different visions of what quality is. It is true that I could never have imagined that a simple project could be screwed in such a creative way but when the deadline was pressing me, I definitely didn’t appreciate this kind of creativity.
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Might Not Be Available When You Need Them
Since subcontractors aren’t your permanent employees, it is possible they are not available when you need them. On the other hand, if you agree on some kind of schedule and availability, this will benefit both of you. So if this is possible, do it. For instance, if it is a long term project, you can agree to 5, or 10, or 15, or as many hours as the project requires. This you can plan in advance.
As you see, there are many factors to consider before hiring subcontractors. In some cases subcontractor help could be your best bet, in others this could be a decision that can literally bury you. Evaluate your situation, consult an accountant, if necessary and only after this decide if hiring subcontractors is good for you or not.