Here at Express Yourself Paint (EYP), we are sometimes asked whether our workers are subcontractors or employees. As the owner of EYP, I’m happy to answer your questions and address any concerns you might have about the use and role of employees, contractors, and subcontractors.
What’s the real difference between employees and subcontractors?
The differences are actually pretty subtle and are mostly defined by IRS rules beyond the scope of this blog. It may help, however, to think of an employee as someone hired by a company and paid for a variety of tasks that make up their job, and a contractor or subcontractor as a self-employed person or business contracted for a particular project or portion of a larger project.
Generally independent contractors are individuals while subcontractors are businesses.
Contractor and subcontractor are often used interchangeably. The number of self-employed or contract workers is growing quickly. The last federal figures from 2006 found that contractors made up 31% of the workforce. That number is expected to hit 40% by 2020.
Before founding EYP, I was a materials manager for a Fortune 100 company. That company was a subcontractor manufacturing products for companies including Nortel, Cisco, IBM,
Lenovo, Ericson, NCR, Mitsubishi and Red Box. Many products you know well, including Red Box, are the product of a parent company that originated an idea and used subcontractors for
virtually every other step, including the actual design of the product. Subcontractors are used widely in every industry, including accounting, marketing, law, media, construction, health care,
and programming. Subcontractors are found in virtually every industry today. Sometimes there may be a need for insurance from companies such as constructaquote.com. (constructaquote.com are the leading providers of contractors all risk insurance).
Why would you use a contractor or subcontractor instead of hiring an employee?
Painting demands are seasonal. Demands for our services in summer months are typically 200% higher than in winter months. If we used only employees, we would have to hire and
layoff a number of individuals each year to coincide with customer needs. Instead, we supplement with subcontractors during periods of high demand.
Our system is working well: our clients can expect to wait only two weeks while many other painting companies have an average six-to-eight week waiting period, and we are the highest-
ranked interior painting company in the Triangle. We can usually complete emergency products quickly even during our high peak seasons. I’m not aware of any residential painting companies
that do not use subcontractors.
But don?t you have more control over an employee than a subcontractor?
I have personally been responsible for hundreds of employees. When issues arise, firing an employee is sometimes an easy and quick process. However, in other cases, firing an employee is difficult and only accomplished after months of developmental improvement plans have been worked through and unacceptable work has continued to be produced. A subcontractor, on the other hand, does not have the same legal protections as an employee, and may be terminated at any time for any reason.
After working extensively with hundreds of both contractors and employees, it is my professional opinion that I have much more control over the work of a contractor and can remedy issues
more expediently.
Whether the work is performed by an employee or a contractor, EYP maintains complete control over the outcome, and our goal is to ensure that you, the customer, are delighted with the end
result.
I’ve heard horror stories about subcontractors doing inferior work. How do you prevent
this?
We have a number of safeguards in place. Whether the person working with EYP is an employee or a subcontractor, their work must meet our quality standards. Typically we find that only one out of every eight painters and one in three subcontractors meets our standards. During the interview process, any potential new hire must provide us with references, which are
carefully checked. Whenever possible, we visit an existing work site to evaluate their work in person.
After an independent contractor is selected, they are assigned to work with a team of experienced EYP craftsmen. Each person on the team affects the performance of the team as a whole, which in turn affects how the team is rewarded. Individuals whose performance is sub-par are quickly weeded out.
Our operations manager reviews and scores all completed projects, giving special attention to the first three projects each new hire completes. If a review of those project scores reveals
inadequate performance, the new hire is terminated and immediate steps are taken to ensure that any work is brought up to EYP standards.
We take your feedback and satisfaction seriously. We track reviews and performance measures for every contractor. We conduct annual assessments of each contractor, and give awards to
the contractors with the best performance. This takes time, but we believe the time is well spent and is reflected in our reviews.
How do our subcontractors compare to our independent contractors?
Based on highest reviews and fewest callbacks, our highest rated crew is a subcontractor, while our independent contractor crew comes in a close second.
If independent and subcontractors do such good work, why shouldn’t I hire them directly and bypass EYP?
I suppose you could do that if you could find them and were willing to put sufficient processes in place to limit your risk. You’d also have to determine whether or not they had the skill set
needed to complete your project, check references, insurance, background checks, etc. Most of the contractors we use do not have marketing or sales departments. That’s one of the reasons
they choose to work with companies like ours.
Another thing to consider is what you would do if the subcontractor performed poorly. Even with our years of experience hiring and evaluating contractors, the occasional problem will arise.
EYP can not only remove any worker whose performance is inadequate, but we also have the resources to ensure that all work is completed to our high standards.
Does your system work?
We know these processes work because at the time of writing this article, we are the highest ranked interior paint contractor in the Triangle. Our reviews reflect how well we manage our
business as a whole, from the first time we answer the phone, to the follow up call from your paint specialist. We put a lot of thought and time into our processes and continue to look for
ways to improve them. You can count on our continuing commitment to your satisfaction.
David C. Roberts
Owner, Express Yourself Paint
Category: Misc