How to Hire Subcontractors: Finding and Vetting Trade Partners
To hire subcontractors the right way, do it in this order: find candidates through other trades, suppliers, and job sites, vet them by looking at their work and checking their references and insurance, test them on a small scope, and get your paperwork signed before they start. How to hire subcontractors is mostly a question of patience. The builders who get burned are usually the ones who hired on a Tuesday because they needed someone on Wednesday.
Your trades build the house. You’re the one whose name is on the sign and the warranty. So the quality of your company is, to an uncomfortable degree, the quality of the people you hire.
How do you find good subcontractors?
You find good subcontractors by asking the people who see their work every day. Good trades are rarely advertising. They’re busy. Here’s where I’d look:
Your current trades. A good plumber knows who the good electricians are, because they work in the same walls. This is the best source there is.
Supply houses. The counter staff at the lumberyard, the plumbing supplier, and the tile distributor know who buys quality material and who pays their bills.
Other builders’ job sites. Drive the neighborhoods where the best work in your market is going up. Trade trucks have phone numbers on them.
Your builders association. Trades who show up to association events are usually trying to run a real business.
Architects and designers. They know which cabinet shops, tile setters, and finish carpenters deliver on detailed work.
Inspectors and engineers. They won’t always name names, but they know whose work passes.
Keep a running list even when you don’t need anyone. The time to meet your next framer is before your current one retires.
How do you vet a subcontractor before you hire?
Vet the work, the business, and the person, in that order. A nice guy with a great price who can’t produce an insurance certificate is not a find.
Look at a job in progress. Finished work hides a lot. A job in progress shows you how they frame, how they organize, and how clean they leave the site.
Call builders they work for now. Ask specific questions. Do they show up when scheduled? How do they handle callbacks? Would you give them your next house?
Call their supplier. A trade who is behind with suppliers is a lien risk and a scheduling risk.
Check license and insurance. Where a license is required, verify it. Get a current certificate from their agent and read it. See subcontractor insurance requirements for what to look for.
Ask about capacity. How many crews? How many builders do they serve? Who will actually be on your job?
Pay attention to how they bid. A clear, itemized bid returned on time tells you how they’ll communicate for the next six months. So does a number texted at midnight.
What should you ask a subcontractor before hiring them?
Ask the questions that reveal how they run their business. I’d cover these:
Who runs the crew on site, and how do I reach them?
Are your workers employees or your own subs, and how are they covered for injuries?
How much notice do you need to hit a start date?
What do you need from me to do your best work?
How do you handle extras and changes?
What’s your warranty, and how quickly do you respond to a callback?
What are your payment expectations?
Will you sign our subcontractor agreement and provide lien waivers with each invoice?
That fourth question is worth asking sincerely. The best trades have strong opinions about what makes a builder easy or hard to work for, and you’ll learn something.
How do you hire subcontractors without getting burned?
Start small and paper it up. The steps:
Give them a trial scope. A smaller job, or one house while your main trade handles the rest. You learn more from one job than from ten reference calls.
Don’t hire on price alone. The lowest bid often has the thinnest scope. Compare what’s included line by line before you compare totals.
Sign the agreement first. A master subcontractor agreement, plus a work order with the scope and price for the specific house.
Collect the documents. W-9, insurance certificate, workers’ comp proof, license. The complete list is in my subcontractor paperwork checklist.
Walk the job together before they start. Confirm scope, site conditions, and what “done” means.
Inspect and give feedback early. Correct things on day two, not at the final walk.
If you’d like the paperwork step ready to send, our Subcontractor Paperwork Package is the system for protecting yourself with trade partners.
What’s different about hiring subcontractors as a small business?
When you’re small, you don’t have volume to offer, so you have to be the builder trades want to work for. Hiring subcontractors as a small business is a recruiting problem as much as a purchasing one. A small builder who is organized will often get better service than a big builder who isn’t.
What trades care about, roughly in order:
Getting paid on time. Every time, without chasing. Nothing else comes close.
A job that’s ready. When you say the house is ready for drywall, it’s ready for drywall. Wasted trips cost them money.
Clear information. Complete plans, written specs, and selections made before they arrive.
A schedule they can trust. Realistic dates and honest updates when things slip.
Respect. Clean sites, fair treatment on changes, and no playing bidders against each other after the fact.
Do those five things and the word gets around. Trades talk to each other at the supply house about builders the same way we talk about them.
How many subcontractors should you have for each trade?
For most trades, a primary and a backup. One trade per category leaves you stuck when they get busy, raise prices, or have a bad year. Five per category means nobody gets enough of your work to prioritize you.
Give your primary most of the work and your backup enough to stay in the relationship. And when a trade does well, tell them, pay them fast, and keep them busy. Keeping a good subcontractor is a lot cheaper than finding one.
Frequently asked questions
Where is the best place to find subcontractors?
Referrals from trades you already trust and from supply house staff. They see the work and the payment habits up close.
Should I always hire the lowest bidder?
No. Compare scope first, then price. A low bid that leaves things out, or a trade that can’t staff the job, costs more by the end.
What paperwork do I need before a subcontractor starts?
A signed agreement, a W-9, a certificate of insurance, workers’ comp proof, a signed scope and price for the job, and a license where one is required. Lien waivers then come with each payment.
How do I keep good subcontractors once I’ve hired them?
Pay on time, have the job ready when you say it will be, and give them steady work. Reliable builders don’t have much trouble keeping reliable trades.
BTW, if you want every new trade partner onboarded with the same paperwork before they start, grab our Subcontractor Paperwork Package over at the Building Optimal Shop, where you can check out the rest of our swag to build a better business. Proceeds go to benefit, Exponencialistas, my non-profit investing in entrepreneurs transforming their communities in Latin America.