Running an internal exercise in your business to identify all the critical documents that are relevant to you, your business and your jobs now and into the future will be worth its weight in gold. This forms the foundation of whether your onboarding process is going to be successful or not.

The exact documents, their structure and how detailed they need to be will vary from industry to industry and even from job to job. It’s important to get professional advice if you are unsure of what your requirements are in any given scenario. That being said, here are some of the most common documents that need to be collected.

Subcontracting Documents

• Subcontractor business and contact details

The stock standard basic information to collect from a subcontractor include their business name, ABN, address and phone number. It’s also important to identify the primary contacts for the contractor for anyone who is going to be involved with your business. Also identifying the GST status of the subcontractor and doing a quick search on the ABN lookup to check it is valid and accurate can save some headaches later on. In some circumstances it can be worthwhile to store a copy of the contractors logo, business card and/or other advertising material for reference.

• Commercial contract

The contract spells out the terms and conditions of your arrangement with the subcontractor and is the most critical document of all. Failing to get a valid written contract signed and agreed to before work begins is opening your business to untold and unnecessary risks. It is also important to remember that a contract may also include several documents for larger projects and may be subject to change throughout the duration of a job when variations occur and are agreed by both parties.

• Scope of work

A scope of works is a thorough and detailed description of the work that needs to be completed. The size, scope and detail of your scope will vary depending on the complexity of the work involved. Be sure to get the subcontractor to sign-off on the scope to show they have taken in all the information and addressed any concerns ahead of time.

• Insurance certificates

Typical insurances include Public Liability, Workers Compensation, Professional Indemnity and/or Personal Accident & Sickness insurances. Insurance can extend to individual situations where specific insurances are required such as tools and equipment. When it comes to insurance, you need to get a copy of their ‘certificate of currency’ which details the insurance and triple check the contractor is covered for the level of insurance you require. Also important to note with insurance is that it can expire if the contractor misses payments, so you need to get updated copies regularly.

• Qualifications, licenses and tickets

Ensuring that your subcontractor has the correct skills and qualifications is important for your peace of mind that they’re capable but may also be a legal requirement. Allowing a subcontractor who is not adequately qualified or that has lapsed qualifications is a huge risk to your business and your clients. Licenses and qualifications expire and need to be monitored to be confident they meet their requirements.

• Right to work e.g. VISA, police checks, working with children.

Depending on your industry it may be important to check that the subcontractor has the right to work as a contractor in Australia. While their ABN is the most significant factor for a contractor to run a business in Australia it may also be necessary to get copies of their Visa conditions to stay within the law. Running background and police checks is a regular occurrence in industries where personal safety is paramount.

• Terms & conditions

When you sign a contract with a subcontractor spelling out the terms and conditions of the agreement, it may be worthwhile to check if the contractor has terms and conditions of their own. In some cases where a subcontractor provides their T&C’s attached to a quote or invoice, they can have a bearing on the engagement. Watch out for any inconsistencies and make sure they are dealt with in writing prior to work commencing.

• Safety documents e.g. SWMS, Site assessments & inductions

Safety documentation is another non-negotiable step to ensuring you are meeting your compliance requirements. Whether the subcontractor is working from home or working on a commercial construction site, there are important safety steps you need to address. Typical documentation includes Safe Work Method Statements (SWMS), location specific Site Assessments, General and site specific inductions as well as ongoing Tool Box Talks all contribute to a safe working environment. The checks and balances in a safe working environment are constant and need to be regularly addressed and updated.

• Payment documentation

The subcontractors invoice is the most obvious piece of payment documentation that you will need to collect. Once again, you need to scrutinise even an invoice to ensure that it meets minimum standards e.g. is the ABN supplied valid and current? You may also be required to or at least benefit from also collecting quotes, details of any negotiations and in NSW a subcontractor statement supplied with each invoice.

The main takeaway here is to thoroughly examine what documentation you need for any work you are hiring a subcontractor to complete. Understand that each piece of documentation is important for different reasons and any gaps in your paperwork may expose your business to unnecessary risks. If you would like more information on best practices for collecting all this documentation you can read on here.

The post What Documents Do I Need From My Subcontractor? appeared first on SubbieHub.

The key to having a clear overview of your contractors compliance, is to use metrics to test each of your subcontractors against, on an ongoing basis. The metric is simply what you are trying to measure, for example, is the contractor insured or not? By using a metric with a yes or no, we can now measure many contractors at the same time against a pre-set list of questions or ‘metrics’. This is what we call a metric-driven approach to compliance.

A metric driven approach is about measuring each individual subcontractor against a set of questions to better understand their compliance. Only then can you say with confidence, yes all my contractors meet their compliance requirements.

What is a Metric Driven Approach?

In a metric driven approach, we are identifying all the different aspects that go into a subcontracting relationship and breaking them down into individual steps. By doing so, we remove the confusion that often comes from trying to answer a question like “are your contractors compliant?”. It is unlikely you are going to be able to answer a question like that off the cuff, but a question like “does your contractor have a public liability insurance certificate?” is far easier to answer.

The result of addressing each individual question is that you will get a great high level overview of where your compliance is tracking with each individual subcontractor. Taking this approach does three very powerful things:

1. Forces you to collect the physical documentation you need to show proof of compliance.
2. Identifies gaps in your documentation that you may not be aware of.
3. Highlights your greatest weaknesses for achieving compliance.

Taking a metric driven approach will save you enormous amounts of time and money by focusing on what you can improve internally before engaging specialist professionals to assess your business.

The best way to think of a metric driven approach is as a heat gauge, with each metric providing a notch on your gauge that will give you a single point of reference to review your subcontractor relationships.

22 Compliance Metrics

Subcontracting comes in all shapes and sizes which makes it difficult to address compliance when there are so many moving pieces. To overcome this challenge we have developed a set of questions or metrics that can be applied to any contracting scenario.

Our metrics are based on legal principles that have been used in previous decisions by the courts to determine the nature of a contracting relationship (it’s called the ‘common law’). Almost all pieces of legislation contain one or more description based on these common law principles and they form the basis for which many laws have been built from.

After reading countless court decisions, we have distilled down a set of 22 metrics that can be used to measure the compliance of a contracting relationship. These metrics are not exhaustive, as the list of tests used by the courts over time would be far too overwhelming. However, this set of 22 metrics is the most comprehensive set of tests we have come across in the Australian landscape.

Some of these metrics are very simple, such as what is the structure of the business you are engaging, others such as safety, are more complex. In each metric, you are trying to gauge what you have documented, what the reality of the engagement is and where responsibility lies if something goes wrong.

Evidence is King

Because we use such a comprehensive set of metrics, we get to paint a vivid picture of the relationship you have with the worker you are engaging. A key point of using these metrics as a measurement tool, is that you must be able to prove your answer to each metric with physical evidence. I can’t tell you how many times I have asked a business owner if the subcontractor has their own insurance, the answer is normally always yes. When I ask can I see a copy of their certificate of currency that details their insurance, there are a lot less people that I would fit into the yes category.

Evidence comes in many forms and may be simpler than you think to collect. The primary goal here is to be able to support your answers with physical evidence of some description. Not all evidence is created equal and the act of having to produce documentation will allow you to review the quality of the evidence that you can produce for any given aspect of the relationship.

Applying the Metrics to Legislation

In Australia, there is a long list of legislation that affects subcontracting such as tax law, superannuation law, work, health and safety laws, workers compensation and much more. Each of these laws can be applied to contracting arrangement and each law needs to be followed with strict compliance.

Metric number 22 is ‘Statutory Entitlements’, that metric is specifically drawing your attention to the fact that these metrics need to be applied to each individual piece of legislation. The beautiful part of measuring compliance using these metrics is that if you have done the work to put them together, they can be applied largely as they are to each piece of legislation. Similarly, if you have all your documentation in place covering these 22 metrics, you will save a lot of time and money taking your situation to a legal professional to provide advice on whether you are meeting your obligations.

The post How to Reduce Contractor Compliance Risk appeared first on SubbieHub.

Why do I need to check up on my subbies?

Failing your responsibilities as a hirer of subcontractors often leads to crippling fines, penalties, and back-payments. With such a wide-spread range of laws affecting the engagement of a subcontractor, there is little room for error.

Each regulator and piece of legislation has a range of consequences that can be applied to non-compliance depending on its severity.

Because of the challenge of compliance and the overwhelming amount of work it would take to constantly review each piece of legislation and apply them to each individual subcontractor, compliance is rarely measured in small business.

To protect your business from being built on quick-sand, you need to ensure that you are meeting your minimum responsibilities for compliance.

What laws do I need to comply with?

Subcontracting is built on the foundations of a commercial contract, where two parties come together and make an agreement. This allows subcontracting to be one of the most flexible, productive and scalable forms of engagement, but it also means the laws that govern contracting are scattered.

Here are some of the most common laws you will come across in a subcontracting engagement:

• Workers Compensation
• Tax law: income tax, payroll tax and pay legislation
• Work, health & safety
• Commercial contract law
• Superannuation
• Unfair contracts
• Employee vs independent contractor
• Industry specific legislation
• Vicarious liability
• Payment specific legislation
• License specific legislation

Each of these laws comes with a substantial body of specific legislation and often has volume after volume of case law history attached to it. Complicated laws like each of these require expert advice from professional legal practitioners who in many cases will specialise in one of these areas of law. To get a thorough and comprehensive review of your subcontracting engagements, it may be necessary to get advice from several specialists.

How do I navigate such a labyrinth of laws?

One of the greatest challenges for small businesses trying to meet all these compliance requirements is that each law has its own little differences. In some cases two different laws can look at the same scenario and produce a different outcome. For example extended definitions under Workers Compensation might require you to include a contractor on your policy while tax law says the contractor is treated as an independent entity.

The biggest trick to navigating these laws is to ensure you have collected and verified all the documentation between you and your subcontractor. Typically this is going to be the first step when you see a legal professional anyway. Often times, the simple act of collecting and registering the existing documentation in the business will highlight gaps in missing documents or procedures that are not being followed.

We have developed a unique set of compliance metrics to give small businesses a tool they can use to get a high-level gauge over the general compliance of their subcontractors at any given point in time. You can read more about it here ‘how using metrics can help you achieve contractor compliance’.

Managing your risk

The primary goal with any compliance objective is to manage the risks to you, your business and the people you’re working with. The reality is that compliance is not a one-off fix and requires your constant attention. Taking the time to understand your responsibilities and implementing simple processes to ensure you are meeting them will produce substantial benefits to you, your team and your business in the long run.

The post What Most People Miss With Contractor Compliance appeared first on SubbieHub.

So how do you manage the process of onboarding subcontractors efficiently, to save you time and ultimately, that doesn’t require a full-time admin manager to solve? Stay tuned, that is precisely the question we are going to answer.

Why do I need contractors to go through an onboarding process?

In a nutshell, onboarding is about getting a subcontractor up to speed on the job and collecting the right documentation to set the project up for the best possible outcome. Some parts of onboarding are essential e.g., collecting insurance documents, others are more optional such as introducing the subcontractor to your team. The downside is that if you want your business to stay compliant, some level of onboarding is required, the upside is that if you do it right you will get better results from contractors, in a shorter space of time, while minimising your admin and creating a positive environment for all.

1.   Reduce the time it takes for a contractor to hit peak performance

Whether a subcontractor is new to your company or just new to a job, the speed at which they can understand the what, how, when and where of the job that needs to get done, the quicker they can hit peak performance and deliver results, period.

By taking the contractor through a structured onboarding process, you get the opportunity to give the contractor all the tools and resources they need to complete the best job possible.

Imagine the difference between a contractor turning up on-site freshfaced with no idea where anything is to the contractor who already has detailed scopes, drawings, lay-outs, safety protocols etc. completed and uploaded to a mutually accessible database? The productivity gains are limitless.

2. Ensure all compliance requirements are met

The red tape is very real when you’re hiring subbies and there are certain documents that are simply essential if you want to stay on the right side of the law. Meeting your compliance obligations typically requires a long list of documents that need to be collected, verified for accuracy, monitored for changes and managed efficiently.

The difference between a business that has no handle on the level of compliance for their contractors and one that is completely on the ball, is an efficient onboarding process. The trick to minimising the time it takes to meet these obligations is to leverage technology that takes away the leg work such as SubbieHub.

You can find out what sort of documents need to be collected to meet your compliance requirements in our article ‘What documents do I need from my contractors’.

3.   Reduce the threat of issues arising during the job

Taking the time to give a subcontractor the heads-up on how your contract works, what the expectations are, what the quality standards etc. are means they will be far less likely to fail at meeting those requirements of the job. Having this in writing and delivered in an onboarding process with the consequences of poor performance will make it crystal clear what is required.

Having a documented process that fosters high performance is the best way to gain significant boosts to your job performance and productivity. Assumptions and miscommunications can be the death of any project and they are a threat that can be eliminated. The great news is that creating an onboarding process doesn’t need to be a daunting task. You can read about how to make a simple and efficient onboarding process here.

4. Manage safety to reduce the risk of incidents or accidents

Work, Health and Safety (WH&S) create a range of legal requirements and obligations on all parties involved in a working environment. You have a legal responsibility to manage the risks of the job and worksite and to communicate and interact with a subcontractor to ensure a safe working environment. Building safety management into your onboarding process will give you confidence that you’re meeting those obligations.

Using an onboarding process to communicate the safety standards and responsibilities involved in a job means that all team members receive a thorough and consistent message. Having an audit trail of the process is an essential ingredient to prove you are taking the necessary steps to effectively manage risks in the workplace.

5. Peace of mind that the job is in good hands

Having confidence in your contractors and team members to deliver great results is essential for you to be able to step away from micro-managing every detail of every job. Your onboarding process is the single biggest ingredient in making sure that a contractor has the relevant skills and qualifications, meets your standards, and is a good fit for you and your business.

At the end of the day, the performance of your subcontractors reflects on you, your brand, and the client’s overall satisfaction with the job. By completing an onboarding process and not cutting corners, you can be confident that you have hired a subcontractor that ticks all the boxes and that you have given them the best chance of delivering exceptional results.

The post 5 Reasons Why You Need Efficient Contractor Onboarding appeared first on SubbieHub.

The beauty of a well-designed onboarding process is that it is repeatable and consistent for you and your subcontractors. The challenge to creating a great onboarding process is that there are no hard and fast rules and no limits on what you can include in the method. However, there are some very specific best practices that will help to guide you to build a process that delivers the best results.

Tip 1 – Know what documents you need

Get crystal clear on the documentation you need from all your subcontractors at each stage of the project. Demanding unnecessary info and documents will very quickly frustrate both your admin teams and your contractors. Some documents are essential before work can commence while others are just a nice to have. Understanding what you need and when you need it will make for a smooth flow of work by eliminating obstacles and roadblocks. You can read more about what specific documents you need to look at here: ‘Subcontractor onboarding that actually saves you time and money’.

While you’re compiling your list of essential documents, be sure to include the reasoning behind why you need it. Typically, this will be for compliance reasons but also extends to protecting the safety and welfare of everyone involved in the job, improving communication, preventing mistakes and so on.

Tip 2 – Empower your admin with the right tools

If you want to make a big reduction in the time and effort it takes to onboard a subcontractor, then the most powerful tool you can use is technology. The effectiveness of online systems such as SubbieHub has grown exponentially over the last 2-3 years. Technology is getting better and better at handling even the most complex onboarding process and delivering it in a way that is easy, accessible, and convenient for both businesses and subcontractors. Here are three essentials for a good onboarding system:

• Validation checkpoints: Documents need to be reviewed and validated to ensure they meet minimum standards. The best way to ensure those validations take place is to have a system that is monitoring and tracking each and every document at any given point in time.
• Reminders: Subcontractors need to be reminded of the tasks they need to complete, and businesses need to be reminded of the tasks they need to complete. Auto-reminders are your best friend and will shave hours of time chasing up subcontractors and writing to-do lists on your own.
• Audit trails: When there are multiple people handling different aspects of a subcontractors onboarding, it’s essential to have oversight over who has done what, when and where. These types of audit trails give you powerful reporting capabilities to stay ahead of the game.
• Set the rules: Both your admin and subcontractors need to know what is acceptable and not acceptable throughout the onboarding process. People will always try to push the boundaries and having a system with set rules will remove the guesswork and prevent unnecessary mistakes from happening.

Tip 3 – Design your onboarding for the subcontractor

The onboarding process is one of the first and last experiences a contractor will have with your business and leaves them with a lasting impression.

One of the biggest mistakes businesses make in their onboarding process is not understanding who their subcontractors are. Typically, a subcontractor is going to be time-poor and see your ‘onboarding process’ as extra admin for them. If you have a good understanding of who your subcontractors are, you can tailor the wording, the delivery and implementation to suit the circumstances.

There are a few simple rules to follow to keep your contractors happy and on-side.

• Keep it simple: An onboarding process doesn’t need to be overly complicated. Make sure you are getting the right documents at the right time as efficiently as possible and you will be on the right track. Remember that not all documents are essential on day one. Knowing which documents you need and when will help you make the process less cumbersome.
• Make it easy to access: In today’s digital world if your onboarding process isn’t accessible anywhere at any time of day you’re going to get friction. Subcontractors are busy and will need to be able to access or engage with your onboarding process at a time and place that suits them or else you are creating an additional roadblock.
• Stay consistent: Building your onboarding process in a way that takes advantage of online systems removes the human tendency to make changes on the fly. As a result your onboarding process will be far more consistent for all subcontractors you onboard and deliver you consistent results.

Onboarding subcontractors doesn’t need to be an overly time-consuming and painful task if you can get the fundamentals right and systemise the process. Build your process using best practices and leverage technology to automate the time-consuming aspects of the process and you will make a dramatic impact on the time it takes and the results of your subcontractors.

The post 3 Tips for Simple Contractor Onboarding appeared first on SubbieHub.

In simple terms, the efficiency, productivity, and ultimately the profitability of a job is largely determined by the subcontractors performing the job itself. With so much riding on the workmanship of subcontractors there is much to be gained from improving their performance.

Here we look at the top 5 keys to improve the productivity of a subcontracting relationship. These are not meant to be overly technical, but rather simple strategies that any business hiring subcontractors can implement in a short space of time.

Trust and relationships with principal contractors

The relationship between the hirer and the subcontractor is cited as the most important to the outcome of productivity on a jobsite. While this may seem touchy-feely to some, it’s a reality that people work best with other people they know, like and trust. Building up trust and positive relationships with subcontractors often happens in a short space of time due to the nature of contracting relationships, but can be broken equally as quickly.

The biggest factor in building trust with a subbie is open, often, and transparent communication both ways. Subcontractors understand that this is a commercial arrangement and business decisions need to be made. Telling them what you are doing, why you are doing it and when you are doing it during the planning and development phases will go a long way to building trust, whether they are the contractor that gets the job or not.

Quotes and tender practices

The general practice and process for receiving or reviewing quotes and tenders is often described by subcontractors as confusing, unclear and misleading. While the Hirer is shopping for the best contractor based on price, quality or services, they can easily offend subbies in the process.

Be clear with contractors from the outset with what the process is going to look like and what stage you are up to. Practices that involve shopping around, under cutting or sharing subcontractors proposals create mistrust and distaste towards your business.

Project documentation and document control

Admin, admin, admin. It is the bane of existence for both Hirers and Contractors, but like eating your veggies, it is essential to have a happy and healthy business. From a Hirers perspective there are a growing spread of documents and paperwork that need to be finalised before, during and after a job for them to maintain compliance requirements. For the subcontractor, it is an admin requirement that serves no purpose to their own objective and has a big impact on their time. This mismatch of perceptions leads to an endless back and forth relationship that can become frustrating or bitter when it doesn’t go smoothly.

While technology is often touted as the big solution, most platforms quickly become overly confusing, time or labour intensive and end up becoming outdated, unused or irrelevant. When it comes to technology simplicity is essential. The more information going into a system and the more users accessing and interpreting the information, the more chance of errors.

For project documentation and document control processes to improve productivity, they need to be targeted and laser focused on collecting the absolute minimum required to meet compliance requirements.

Planning, scheduling, and coordination

It’s no secret that scheduling mishaps and uncoordinated calendars result in frustrating delays and wasted time spent sitting on the fence. Depending on the size of the job or project and the number of contractors involved, this can become a real headache.

While principal contractors tend to keep a tight hold on the schedule and use themselves as a single point of contact for coordination, a move to a more open approach may inject some flexibility that improves productivity. It’s a common protest from subcontractors that they are not included in the timing and scheduling plan until too far down the line. The buck has to stop with the project manager, however, giving subcontractors a say in the plan design from early on will significantly lessen unexpected delays. If the subcontractor is involved in the design, they have buy-in from the start and can anticipate realistic objectives without being pressured to fit into an un-realistic deadline.

Once again, open, often and transparent communication with all the subcontractors involved in a job will help to ensure things run smoothly and you keep your finger on the pulse.

Payment and incentive structures

Money makes the world go round, and overwhelmingly peoples first response to a productivity issue is to throw money at it. While the size of the pay check does matter, the way you structure it matters more. Similarly, money alone isn’t going to solve all your problems, and yes, I left this to last for a reason. If you can tackle the first 4 tips mentioned above first, the money part is going to become a lot easier.

Incentives for subcontractors is all about structuring them to be in alignment with the outcome you are trying to achieve. Don’t skip ahead though, an outcome doesn’t have to be the end result, in fact the best outcomes are small bite size pieces that anyone can digest. If you can work out a way to break your job/project down into small incremental stages and align your incentives with reaching those milestones, you’re 90% of the way there.

The post 5 Keys to Subcontractor Productivity appeared first on SubbieHub.

Typically financial incentives are the go-to carrot to keep subcontractors engaged and motivated  to work efficiently. While financial incentives are absolutely important, they shouldn’t be relied upon until you have set the stage and laid the foundations for a highly efficient and productive environment.

Know who you’re dealing with

Sounds like a no-brainer right? Well, this is the first and probably most overlooked lever you can pull to improve the motivation for subcontractors. Getting to know the subbies that you hire is a double-edged sword that can both positively affect motivation or negatively affect your decision to hire. Both are good in the long-run for the project.

Firstly, motivation is incredibly subjective and is dictated by each individual persons needs and desires. Therefore, what is going to motivate one person might not motivate another person at all. The big trick is to understand a subbie well enough to know what their higher goals are. If you can then tailor your engagement to help them achieve their goals you will have a far more motivated subbie on your hands.

On the flip side, if in the process of getting to know a subbie you may come across some red flags in the way they perform their job. In that scenario you can pull the plug and save everyone the drama of a job going bad.

Creating goals and milestones

Breaking a job down into incremental steps and milestones is common practice in many contracting relationships. However, a milestone or a long to-do list can actually become counter-productive and have a negative effect on the motivation of a sub-contractor. It reduces the ability for the contractor to step back and look at the big picture while also creating stress and anxiety with the amount of work to get done.

A goal on the other hand provides a tangible challenge that a contractor will strive to achieve and create ongoing motivation. The goals need to have the contractor’s buy-in and they need to follow the SMART principle (Specific, Measurable, Achievable, Realistic and Time-bound).

People are naturally motivated by a challenge and by structuring your jobs as a series of smart goals rather then a long to-do list, you will see shifts in the motivation of the contractors performing the job. A mechanism to monitor the performance of the contractor and celebrate the goals achieved creates positive reinforcement and will lead to better outcomes.

Keep communication easy and open

Communication is a two-way street, and your method of communicating may not align with the communication method of the sub-contractor. Mismatches in the type of communication e.g. spoken, email, SMS and the timeliness of communication e.g. once a day or once a week are the most common causes of a breakdown in communication.

In a fast-paced working environment having clear, open and easy communication between you and the contractor is critical. Simple and regular check-in’s will allow you to keep your finger on the pulse and quickly react to changes or issues before they become a real problem. It is also just as important to make yourself or someone in the organisation present and available to receive and respond to contractor requests promptly.

Set the expectations from the start

Given that contractors are typically only around for short periods of time and run their own businesses it’s often seen as un-important to bring them up to speed on your organisations values, habits and ways of operating. As a result contractors often lack an understanding of the entirety of a job or being able to integrate effectively with the business they are working with. They may quickly fall back into habits or methods that don’t align with your expectations on the job.

Having clear expectations on the quality of work, communication frequency, safety standards, time-frames and scopes will eliminate the chances of mis-interpretations that cost time and money. Expectations should be simple and structured and need to have the acceptance or buy-in from the contractor to be effective.

Make sure the deliverables are clear in the contract

Contracts are often passed off as excessive paperwork in small businesses that don’t have the luxury of a contracts administrator and even in some that do. However, the contract is an essential tool in expressing the deliverables of a job, the scope of the works and can link up non-traditional aspects like goals and expectations.

It is also important from a performance and productivity perspective that the contractor accepts and takes on a level of risk in relation to the job. The risk involved will in itself motivate a contractor to work efficiently, reduce costs and ensure the quality of the workmanship they are providing.

Similarly, if things don’t go to plan, it is the contract that you will need to fall back on to ensure contractors meet their side of the bargain and complete works to the necessary standards.

The biggest conflicts in contractor management can almost always be traced back to a deficiency in the contract itself.

Avoid micromanaging the contractor

There are certain elements of a job that will actually de-motivate a contractor in the course of completing a job. These factors are often a result of your relationship with the contractor and come from things like poor work environments, over-instruction, excessive changes to details of the job and poor payment timeframes.

A contractor is paid to come in as a professional and complete a particular job to the standards agreed. Your job is to ensure that your are creating the right environment for them to succeed and then letting them use their expertise to get the best job done.

Linking incentives and rewards to outcomes

Incentives and rewards is a topic in itself and there are many varieties and combinations of rewards that can be used. The most obvious incentive is financial and often comes in the form of lump sum payments or cost-plus contracts. Progress payments are also frequently used to keep the wheels moving on longer jobs.

The motivational driver behind financial rewards is clear, however simple changes to the structure and payment of financial rewards can make a big impact. For instance, what if instead of paying a progress payment out each month as is the norm, we link progress payments to incremental goals and milestones? The difference here is that rather than simply ticking boxes throughout the month, the contractor is motivated to hit their targets more efficiently and productively as the reward is linked to a set objective instead.

Thinking of rewards outside of the traditional financial payments can yield great results as well. Things like a subbie of the month trophy or a BBQ lunch on a Friday can help boost the morale and overall motivation of a contracted workforce.

Everyone is different and will respond differently to incentives, the trick is to find out what makes your contractors tick and structure incentives and rewards that will bring out their best.

The post Keeping Subcontractors Motivated appeared first on SubbieHub.

1. Engaging a contractor without a contract

The commercial nature of contracting relationships means that a contract detailing the engagement is imperative. The idea of a hand-shake agreement between friends regularly comes un-stuck and leaves a big mess in its wake.
A simple contract that spells out the terms and conditions of the arrangement and expectations of both parties will often save you a lot of pain in the long run. Having it written down and agreed minimises disputes and creates a clear platform for everyone to get on with the job.

2. Inadequate document management

Contracting requires more documentation than most other forms of engagement and needs to be managed efficiently and appropriately. Because contracting covers a wide range of legal responsibilities and wide-ranging industries, the documents you need to collect and the frequency you need to collect them will vary.
Insurance misinterpretations are common, where a business will hire a contractor and ask for their certificate of currency, which is valid at that time. Later down the track if the business hires that same contractor and fails to get an updated certificate, the insurance may have lapsed or expired without them knowing.
Other documents like qualifications, licenses, green/white cards, subcontractor statements (NSW) etc. should all be collected and monitored to ensure compliance standards are maintained ongoing.

3. Safety oversights

Safety on a worksite is one of those non-negotiables and is highly regulated regardless of the type of worker you are engaging. Just by hiring a contractor does not pass off all your responsibilities to ensure the worksite is safe.
Essential to meeting your safety obligations will be the ability for you to prove you have taken steps in conjunction with the contractor/s to manage the safety of the site at the beginning, during and end of the job.

4. No onboarding or induction process

Each and every time you engage with a contractor it is critical to go through a consistent and transparent onboarding process to ensure all documentation is accurate and up to date. Failing to take this step or skipping important documents leaves a hole in your compliance management. While it may not be apparent straight away, all too often missed documents will come back to bite you down the line.
Induction processes are often linked to safety protocols, which are important, although inductions can be used to help bring a contractor up to speed on all aspects of a job. Incorporating into induction material your business philosophy, expectations, process and timelines can help them to see the big picture and work in with the rest of the team.

5. Incorrect worker classifications

Workers can be classified in a myriad of different ways for the purposes of different laws and regulations. Understanding where a worker sits within the legal system is no easy feat but is essential to staying on the right side of the law.
On top of the common law view of a contractor vs employee, laws that regulate superannuation, workers compensation, payroll tax and more have extended definitions that can deem certain contractors to be employees.
Take the time to gain a thorough understanding of your obligations under the different rules and get independent legal advice on your engagements or risk substantial consequences.

6. Poor contractor management policies and procedures

Many small businesses overlook the importance of having a documented process for managing the day to day engagement of a contractor. Having a written policy and procedure helps to ensure that all important documentation is identified, and a set structure is followed to maintain those standards.
Just as important as having a written policy is making sure that it’s followed by all members of your team and that it is enforced consistently. I sometimes come across a fear from businesses that they don’t want to put too much pressure on a contractor to follow protocol or the will move on. The reality is that if a contractor is not conforming to simple compliance requirements, it’s often a good thing if they move on before things go wrong.

7. Relying on individuals rather than a system to track compliance

We are all human and humans make mistakes. A system on the other hand is designed in specific ways to remove the opportunity for mistakes to happen. A simple and structured contractor compliance management system will identify and highlight important or missing information before it becomes a problem. Similarly, as individuals we tend to default to management practices we are comfortable with, meaning that each and every person has their own unique way of doing things. If compliance isn’t managed in a systematic way, it leaves too much up to personal interpretation.

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