We have 6 subs full time and it's burned us a few times. We go behind them on ~25% of jobs. We just got CompanyCam and that'll help operationally. But, I am considering going the employee route and paying hourly.
What do you feel works best -- to maximize profitability, ensure quality, and reduce headaches?
Depends on how you want to scale.
I have employees because I want to be able to train them to become leaders so I can step away. I 1099 when I need a specific job done that I know we can't do. But I also trust my subs.
We trusted our subs too much and they **bleep** us over. It's really my fault, as I was not on top of them. I paid them before seeing the final work and getting homeowner approval. And now we have to redo a bathroom and eat all of the costs.
What % do you pay your subs (of labor/material)?
So I'm extremely new to all of this. Take my situation with a grain of salt.
My concrete guy tells me how much the job is then I take 10%. I pay half up front then half when done.
I walk the job with them before, during, and after.
I also have a phenomenal relationship with my sub so my situation is definitely not one that everyone else has. I know this is probably the worst advice but it's how I operate and it works great for me.
This is a big decision and honestly one Rich Camacho would have a lot to say about. He's in the community this week answering hiring and recruitment questions. The employee vs. sub debate is very much in his wheelhouse! Worth dropping your question there:
Ask-an-Expert: Want advice on Job Posts, Interviews, Training, or Retention...send them!
Looking forward to hearing from other owners in this thread
I personally prefer subcontractors because of the flexibility, scalability, and lower overhead they can provide. They can be a great option for growth and taking on additional work without immediately increasing payroll responsibilities. However, I also agree that if quality issues or recurring problems start becoming common, more direct control may be necessary. At that point, moving toward employees can make sense because it allows for stronger training, accountability, consistency, and the ability to build a team around your company standards. I also believe systems play a major role tools like inspections, photos, checklists, and clear expectations can help improve quality regardless of which route is used.
I know it's a very tempting to use a 1099 contractor, but you have no control over their work. All you could tell them is I need this clean on this day and ask them what their rate is. You can't tell them what you're paying them. You can't provide any supplies for them. You can't dictate how they should be cleaning. I just don't want to mess with trying to manage all that. Personally I think having a employee is a lot better than having a 1099 contractor. Unless you are a solo cleaner and you're using a contractor for last minute sickness or whatever. Or maybe if you're going on vacation.
I'd start by asking where the quality issues are coming from. If it's training and consistency, employees may help. If it's capacity and flexibility, trusted subs might be the better fit.
