Lehner, who uses trade subcontractors, admits to frustration at times because he doesn’t know all the workers in the subcontractor’s company. “We interview people, review their [finished] work, watch their work [in progress], do a background check, check their insurance, make sure they’re self-incorporated or a sole proprietor — to make sure they’re a good fit with our company,” he says. And if “something falls apart or we see something we don’t like, we start the process over again. We might go through two or three people.” All of which takes time. And if your best HVAC sub retires, as Lehner’s did last summer, you may not find another for several months. For this reason and general scheduling issues, it’s important to have reliable back-up subs.
So he wouldn’t get caught flat when he owned his Martinsville, Ind., company, Mike Weiss says he had every subcontractor who came to him fill out “an information folio with contacts, EIN or Social Security number, company name, and supplier and builder references. When we needed someone we had [forms] ranked by trade and, if possible, by competency. We took the ones who’d been on file the longest and interviewed them. That’s how we hired them.”
SCHEDULING Since subcontractors work for many general contractors simultaneously, scheduling is tricky. Floramo gives subs four- to six-weeks’ notice before a job. Weiss says he advised subs as soon as the company took on a new job “so they could dummy in the spot on their production schedule. We always consulted our subs when we were doing our schedule, because we needed to know their crew size and what they estimated the duration of the job would be.” For in-house scheduling, Wadlington uses whiteboards showing “jobs in progress, who’s on a job, what needs to be done, one week out, two weeks out, start and finish date for every sub. We put the sub in the potential schedule and keep amending it as we go through the job,” he says.
One benefit to having to schedule subcontractors, says Perry, is that his project managers must plan ahead. “Our schedules and budgets [in part because subs charge a lump sum] are better.”
With employees, scheduling can be easier but it still needs to be done carefully. Bob Bell, of Bell’s Remodeling, in Duluth, Minn., has just two employees. “We do everything except electrical and plumbing,” he says. And Bell’s does one job at a time, so the crew is always busy. He hasn’t laid off anyone in 11 years. For Bell, scheduling jobs is part of a conscious effort to maintain a small company that’s tight with its clients. “Once I start a job, clients know I’ll be there every day until we’re done,” says Bell, who runs about 50 jobs a year ranging from installing a storm door to building a $200,000 addition. “Some of our jobs are small, and you couldn’t get a sub to do that. I have fewer scheduling problems and more control.”
It may be possible to keep a longer backlog — six to nine months — with employees since you know their schedule, but Lehner says he’s able to keep a three- to five-month backlog, which seems like a reasonable amount of time for most remodelers.
One other thing that needs to be scheduled and budgeted for is the punch list, since it can be difficult to get subcontractors to return to a job. Some remodelers put it into the sub’s contract. Other remodelers who rely heavily on subs have a “gofer” and/or clean-up person on staff. Peggy Fisher, co-owner of the Fisher Group in Annandale, Va. (which tries not to use subcontractors), says that another remodeler suggested that if she did use subs she should “put at least 10% more into the subcontractor budget to clean up after them.”
BALANCE With employees, it’s difficult to make sure everyone works to capacity every day; you certainly don’t want to make it a practice of hiring, laying off, and re-hiring. The Fisher Group cross-trains employees so that if the company’s full-time “electrical installer has a ton of work, someone can help him pull wires,” Fisher says.
Although subs are thought of as experts in their field, “any tradesman can be state-of-the-art if they go to trade shows, read magazines, and work with other tradesmen in the industry. They’re not isolated [as employees] any more than other tradesmen,” says Adams, who encourages and pays for employees to obtain education.
Yet Wadlington believes that the level of craftsmanship is much higher among those who are self-employed. “I like entrepreneurial personalities,” he says. “There’s a different pool to pull from those who want to be employees and those who want to be self-employed.”