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Why Your Trade-Based Business Needs to Change its Hiring Policies Immediately

July 22nd, 2023 | 6 min. read

By CSI Accounting Staff


There was a construction boom a few years ago, but the industry took a hit during the COVID-19 pandemic. However, it is expected to rebound again in the next few years, partially due to new technology.

That’s great news for trade-based businesses, such as construction companies, landscapers, and electricians, but finding the talent to match the demand can be a huge challenge for any employer. 

There are so many variables to weigh out. How many people can you employ during these booms? Can you keep a consistent level of quality in your work? How will these extra employees affect your bottom line once the boom dries up? A lot of smaller companies get around these problems by hiring subcontractors who they can keep around only while there's extra work to be found.

Subcontractors can seem like an easy solution because they’re typically inexpensive, they get a specific job done, and you don’t have to worry about providing benefits for them. However, owners who overuse subcontractors may be hurting their businesses.

At CSI Accounting & Payroll, we've worked with small businesses for 50+ years. We know the challenges of your industry, and we know the risks of subcontracting your work and not hiring internally before a boom.

construction-1There's too much risk in subcontracting your work.

We understand that some jobs may require a couple of subcontractors, but using this as your main hiring policy can hurt your business in many ways. You may not be getting the most skilled people to work for your business, and there is little-to-no recourse for you if they do a poor job.

Let's say you subcontracted someone to paint rooms for you, only to realize that the work was subpar. The subcontractor disagrees, and you lose more time and money by fixing their shoddy work. Not all subcontractors are like this, of course, but without benefits or a steady employer income, they may not feel like they're in a position to take responsibility for their work.

The worst part is how it only reflects poorly on the business you do with your customers. They don’t see the fact that you hired a bad subcontractor; all they see is your company’s name attached to a poor product or service. In a market where reputation and word-of-mouth can be the difference between success and failure, this is just too big of a risk to take.

(Maybe your worker isn't even a subcontractor! Learn the difference between an independent contractor and an employee here, as well as how CSI helps correct this error.)

You won’t be able to grow when you need to... because everyone good will already be gone.

If you aren’t giving jobs to the best people, then your competitors are. You and your closest competitors face the same industry booms, so if they can hire more effectively or faster than you, then this can create an unforeseen hiring problem for your business during a time when you should be growing.

Plus, not hiring permanent employees means that you may not be able to grow your business because you won’t be able to find enough good workers to take advantage of pop-up opportunities.

The companies that grow are the ones who are hiring internal W2 employees - the ones who can provide benefits and security. This is more risky in some ways, but that risk will pay off with more and better business.

Click the video below to hear from a satisfied CSI client in your industry:

Knowing your financials is key to good hiring practices.

It’s important to have your financials in order before you make these new hires. You need to know exactly how much you can expand without jeopardizing what you have, so it's important to have a good payroll service and accounting firm.

When your payroll and accounting services are both under the same roof, not only will they be able to help you formulate a plan for your business and help you decide how much you can grow, but you’ll also never have to worry about your people getting paid on time.

You can use your extra time to create better opportunities for your business and focus on finding the best jobs during the booming market. With just a little help and some timely planning, your business can grow the way you want it to - and you’ll never have to apologize for another subcontractor’s work ever again.

If you're interested in a payroll and accounting service, why not consider CSI Accounting & Payroll? We've worked with small business owners for over 50 years, and we know trade-based industries well. To see if we can be a good fit for your business, click the button below for a free consultation:

Not ready to talk? That's okay! First, learn more about what it's like to work with CSI by clicking the image below:

CSI Accounting Staff

This article was composed by a member of our staff who interviewed our experts to get the facts straight. Any uncited information found here came straight from a knowledgeable accountant or payroll specialist.