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

Apr 16, 2019 10:52:00 AM / by CSI Accounting Staff posted in landscaping companies, construction companies, small business operations

We’re in the midst of a construction boom. That’s great news for trade-based businesses, such as construction companies, electricians, and plumbers, but finding the talent to match the demand during these booms 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 inevitably dries up?

A lot of these companies (especially smaller ones) get around this problem by hiring subcontractors who they can keep around only while there's extra work to be found. A subcontractor 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, the overuse of subcontractors is definitely hurting your business.

There's too much risk in subcontracting your work.

We understand that some jobs may require a subcontractor or two, but using this as your main hiring policy is hurting your business in a number of ways. You may not be getting the most skilled tradespeople to work for your business, and there is little-to-no recourse for you if they do a poor job.

Take the idea of a commercial painter; you subcontract someone to paint rooms for you, only to realize that the work was subpar. This is a terrible outcome, and the subcontractor won’t accept it. This means that you’ll lose more time and money by fixing their shoddy work. Not all subcontractors are like this, of course, but without benefits or a steady income from their employer, subcontractors may not feel like they're in a position to take ownership over 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 great a risk to take.

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

Business doesn’t happen in a vacuum. If you aren’t giving jobs to the best people, then your competitors are. This can create an unforeseen hiring problem for your business during a time when you should be growing. 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 W2 employees, the ones who can provide benefits and security. Yes, this is more risky for your company, but that risk will pay off with more and better business.

Knowing your financials is key to good hiring practices.

As always, 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 as to minimize those risks. That’s why it’s so important to have a good payroll service and accounting firm. 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. They stay paid and happy -- and so do you.

You can use your extra time to create better opportunities for your business and focus on finding the best jobs during the boom 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.

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CSI Accounting Staff

Written by CSI Accounting Staff

Client Development Manager

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