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.

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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.

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