<img alt="" src="https://secure.refl3alea.com/149753.png" style="display:none;"> What are the Benefits of Subcontracting?

What are the Benefits of Subcontracting?

Written by Emilie Filion, MBA, PMP May 05, 2016

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These days, it’s not unusual for companies to make use of subcontracting, which is defined as the contractual process by which a prime contractor entrusts a third party with all or part of a job to be performed under specified conditions, while the prime contractor keeps the responsibility for the finished product. 

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Quantitative Benefits of Subcontracting

Reducing Costs

argentpapier-flechedescendReducing costs is undeniably subcontracting’s greatest and most obvious benefit. There are two avenues for saving money:  remuneration and performance of the work. 

Remuneration

First, it’s important to highlight that, while a contract worker’s hourly wage may be higher than that of a regular employee, it’s still possible to achieve substantial savings. Outsourcing is a cost that only occurs when you need help, rather than being a regular cost, 12 months a year. It also saves you from paying a number of fees like employment insurance, social benefits and union fees.

Read Also: 3 Things to Look for When Hiring a Contractor to Get These Benefits  

Performance

And by the very fact that you’re hiring experts, you know the work you’re entrusting to the external resource person will be well done, without having to worry that you’ll need to redo part of the work afterwards. The expertise of the contract workers you select for your projects is both the key to success and your assurance about the expected results when there is a very specific process or issue involved. By offering your clients quality work, you are in a better position to ensure consistency in the work that’s performed.

Ensuring Product and Service Quality

Another advantage of subcontracting is without a doubt the quality of the work, as long as you do business with the right resources, of course, since product or service quality are central to a company’s success. In principle, contractors are specialized in their area. Whether they are large companies or SMEs, their mission as contractors is to listen to your needs and to deliver a quality product that meets your criteria, expectations, budget and deadline. Evaluate contractor allows you to make sure you always hiring the best one.

Experts can also be helpful in accomplishing a specific task that requires special tools, expertise or knowledge. For example, if you want to carry out a project within your company that requires certain types of certification, you could occasionally draw on the services of a company that already has this know-how. This would help you reach your goals sooner.

Increasing Productivity

Tasks get done faster when you call upon specialists, which leads to productivity gains. This, in turn, lets you tackle a larger volume of work while meeting often tight deadlines. Subcontracting is also an interesting avenue when you lack capacity. You can use the services of a company for a given project that exceeds your company’s current capacity.  This type of subcontracting can help you gain new clients and keep current ones.

Preventing Problems

By choosing wisely who you subcontract work to, you prevent problems and complications, including work incidents arising from incompetent workers or poorly executed work. Choosing the right contractor guarantees a certain level of quality since you are retaining professional services. 

 

Qualitative Benefits of Subcontracting

Strategic Use of Resources

Ultimately, subcontracting lets you focus on what’s most important to you:  your business. By hiring professionals to handle the tasks you are less good at, you can use your time and energy more strategically.  You will have less to manage because your project will be coordinated by professionals who know their job. Imagine everything you could take on with the time saved!

Preserving your Reputation

Another important aspect is preventing reputational damage. By surrounding yourself with the right team, you are making sure you’ll never find yourself in this kind of predicament, which could wipe out your business.

Assessment Opportunities

Subcontracting gaves you the opportunity to try things out. Using a professional’s services on a contractual basis lets you assess the types of work that can be done based on particular expertise. In this way, you can find out whether hiring resources on contract is a plus for your company when the need arises. For example, you may decide to retain the services of a new supplier to assess his or her skills or new work methods.

 

Get these Benefits

By hiring qualified contractors, your company gets a number of benefits that you shouldn’t hesitate to take advantage of. You’ll get high-quality products and services, make gains in terms of speed of execution and avoid potential problems. Cognibox's contractor management software can help you hire contractors.

White Paper: Managing Contractors  Find out more about benefits and risks related to subcontracting Get your free document now <>
Emilie Filion, MBA, PMP
Emilie Filion, MBA, PMP

To align strategy, people and processes; deliver projects and results; build for success, solidly and sustainably: this is her purpose. With Cognibox for nearly 10 years, Emilie specializes in the management of large-scale projects, as well as market development. Sincere, results-oriented and highly ethical, Emilie’s expertise has her guiding multinational companies as they evolve their business practices to reduce workplace accidents and to achieve the highest standards of health and safety. Recognized for her insatiable need for learning, for stepping out of her comfort zone and for rising to every challenge, Emilie is a leader who brilliantly manages each of her projects.

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