Ask the Experts | Subcontracting in Home Services

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Question: I’ve seen a huge influx of companies using subcontract workers for installs. Do you see this becoming the new norm?

Weldon Long; New York Times Bestselling Author

I have not seen a huge influx of that. I’ve seen it here and there. Maybe it just depends on the part of the country but personally, I haven’t seen a ton of it. It might be the plan of the future for the Amazons of the world and the big box stores that are looking to sell equipment and partnering with someone to install it. I guess you could look at that as a kind of subcontractor relationship.

I don’t see it as the new norm. I think there’s always going to be big players who try it because it sounds easy to 1099 somebody and just have them take care of it. It never really works out that easily. When you have people that are subcontractors, they don’t really have the passion for the customers or the passion for customer service. Obviously, they’re not going to do as great of a job.

I was having a conversation this morning with an owner of a really large company and he was talking about his company’s purpose. Their purpose is to take care of their people, provide training and professional development opportunities, take care of the customers, and make a profit. The team. The customers. Profit.

When your people know they have value and they understand the company’s purpose, they’re obviously going to give a higher level of service to the customer than some guy who’s a subcontractor who has no relationship with any type of purpose or the company. If they’re just there doing a J.O.B., you’re probably not going to get the same type of results.

In my estimation, I don’t see it becoming the new norm. I think the new norm is that the people buying equipment from the Amazon’s of the world and then Amazon outsourcing that installation to a company, which could be seen as a type of subcontractor relationship, as I mentioned. That could be something that disrupts the way we’ve been doing business for a long time.

The one exception I might make is companies that have their own people that restructure the way they compensate them. In other words, they take them off of a W2 and move them to a 1099, now that same contractor is a technically subcontractor. I’ve seen that happen here and there. But I don’t see that being a massive trend.

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