Subcontracting benefits your business:

Subcontracting can benefit your business.

There are a number of reasons why outsourcing can be prudent.  A business might work to an over-subscribed model and as contracts flow in, need a reliable outlet when demand outstrips capacity.

Conversely, as businesses ebb and reduce workforces, subcontractors can help to manage growth and become a strategic benefit.

Large, specialized or diversified projects can require additional expertise. Hiring a specialist company to work on aspects of projects can be beneficial in terms of cost, quality and efficiency.

Here are some specific benefits that subcontractors can provide:

Subcontractors can become reliable partners and be a valuable resource, when managing different sized projects with their unique requirements.

This can allow your business to take on new, larger clientele with confidence, incorporating external skilled workers into a custom team.

When your business needs additional labour on a large project, hiring subcontractors can be more cost effective than hiring new, full-time employees.

It helps avoid risk by hiring an established firm with substantial niche experience. Even though subcontractor fees may appear to be more than in-house costs, the actual costs of permanent staff with National Insurance and pension contributions, benefits and training costs in addition to salary, needs to be factored.

The recruitment agency, Venturi stated:

"In our experience, hybrid approaches tend to work best. Both permanent staff and contractors present different pros and cons depending on your current circumstances.

The takeaway message here is: don’t be afraid of using contractors.

If you’re recruiting permanent staff members in roles that are difficult to fill, put contractors into those roles whilst you’re recruiting. Similarly, if you have a series of projects on the horizon, look to take on contractors instead of permanent staff. As outlined above the difference in cost is negligible."

Large projects are notorious for exceeding budget. Paying subcontractors on a per project basis rather than an hourly rate can help to avoid the inevitable overruns that come with these types of project, because the burden of cost and time estimation falls on the subcontractor rather than the main contracting firm. 

When you’re paying workers by the hour, this can result in drastic cost overruns.

In most cases, they have been working in a specific field for a number of years, are passionate about their trade, have had ample opportunity to hone their skills and acquire the necessary tools.

Utilizing subcontractors can limit the need for capital investment and allows access to their equipment and skill upgrades.

In addition, a subcontractor is likely to have done similar work before and will be able to get the job done quickly and efficiently.

Rather than weighing your employees down with simple and mundane tasks, you can outsource these projects to a third party.

Doing so will allow your staff to focus on core business needs and may actually get the job done faster if your subcontractor has expertise in this area.

Rather than bringing them on for long term work, you hire the contractors to work on a few short term projects and then part ways. Sometimes, a contractor and subcontractor association can become a lifetime business relationship.

With full-time employees, however, ending the relationship can be more complicated, with considerable time and cost implications (unemployment, redundancy etc.) and may end in legal disputes. This means there is a good chance you will end up paying someone a salary even if you do not require their services anymore.

Financial crises and recessions are a reminder that it is easier to downsize with subcontractors, than mass company layoffs.

This can add value for your client and a subcontractor becomes part of the project team. If your company does not have a specialist on staff or if you do not have an ongoing need for one, it might be best to hire one for a short-term basis. This is preferable to hiring full-time staff to provide skills that are needed intermittently.

Find a reliable and flexible partner!

Subcontractors are business owners and operators, have their own insurances and legal obligations and, therefore, are not entitled to the same legal protections as employees.

In addition to the previously mentioned cost benefits, employers will not have to send payroll taxes and deductions to the government.