Is it good to sub-contract work or hire permanent employees?

Have you ever thought about providing PT work? The requirements for FT positions can be difficult for a small company to shoulder. Having PT employees removes the burdens from several state and federal requirements. We have also found that there is a larger pool of younger employees who are willing to pick up PT work, and if you get enough of them, you can fill any need you may have for scheduling.

Subcontracting is good if you’re busy and can trust them. If you hire someone, you are responsible to train and build that trust in them. So I would say the choice depends on who it is and how they work. Either way nothing like having a payday come in when you’re doing something else. 

Just make sure you sub it out to someone reliable it’s your name on the line make sure you stay on top of them 👍

it really depends on the type and size of company that you run. If its a new business, sub contracting everything and saving overhead is a great option, that works for residential very well. 

Even is commercial most GC contracting companies they subcontract most of the work. They have a good clientle and they only hire site super, Project Manager, Estimator, etc however most of the work is subcontracted.  

All depends on how your structure and operate your business. 

My business uses primarily W2 employees. I live in california so our restrictions for classifications is pretty gnarly but to try and think of it in terms of other places:

Advantages of W2s

• You can build more of a brand. Maybe the subs are willing to fly your flag, maybe not. But there's always the possibility of them advertising for themselves on your job which is no bueno.
• Scheduling - I feel like with W2s you have more of an ability to say they will show up at a specific time and that can happen (or you have more control over it). A sub can be getting there in their time. Now maybe that's just finding the right ones, but I'll have subs say they'll be there at 8am then show up at 10. They are good guys and do good work, just can't 100% rely on the start time which I think is kind of important in building a brand
• If you look at big successful companies - A1 garage door, large plumbing companies in your area, etc - all their people are W2. That should tell you something. Can you make a lot of money just doing subs? ya probably. If that's your goal, then do that. If you ever want to sell your company, I don't think that's the best option

Advantage of Subs

• completely transfer risk/ isolate cost. That's pretty nice
• Less training cost
• overall probably costs less I think

In my opinion there’s a healthy balance to accommodate not only you but most importantly your clients. Having at least a couple of in house people is imperative. Like others have said, building a brand and keeping your word to clients is definitely what’s needed for having a reliable and sought after brand. However, keeping a list of great subs that you can count on has been a key player in our success. Just remember it comes with a different set of responsibilities. Making sure their insurance and licenses are up to date is one of the most important aspects. Also, managing their work and the customer with regular; daily on site check-ins. So, it’s basically the same job with different responsibilities. The pros of having more subs outweighs the cons. With that being said, we are a full service business ranging all aspects of construction. If you are a single service business like plumbing, landscaping, electric, etc. I think W2 would be better from my experience with those subs.