Subcontractors How Tos and How Not Tos, Pt 2: Setting Expectations [Video]

Need help setting expectations with your newly hired subcontractor? Check out the second of this three-part series where Susan and Don, from FileMaker Pro Gurus, discuss how to set clear expectations with your subcontractors, to get the work done.

Please find the full video transcript below: 

Don:  Hi, this is Don Clark with FileMakerprogurus.com and FM Database consulting. Today, I’m here with Susan Fennema. Susan-

Susan:  Hi. I’m good, how are you. I’m with Beyond the Chaos, and we’re going to be talking about setting expectations for sub-contractors today.

Don:  That’s a big subject. Actually. It may not sound like it, but it is. For example, what’s the most important thing that you think when you’re going to be doing the hiring of a subcontractor or even a W2, full-time employee or part-time employee, what should you do, what’s one of the bigger things?

Susan:  One of the first things I would say is make sure you have some people lined up and ready to go before you actually are in the weeds and need them desperately tomorrow, so you’ve had time to vet them, you’ve had time to check some references, maybe given them a little technical test, something like that. You can build a pool of people, especially if you’re working with subcontractors as opposed to employees. Employees are a little harder. They might have to quit their job to come to work for you, so that makes it a little more challenging, but with subcontractors, you can build a pool of them that when you’re ready, you have people to call and pull in as they’re available.

Don:  Yeah, somebody you vetted as you mentioned as somebody that also can work in the particular area that you need because they’re going to have different strengths and different weaknesses, and you have to keep that in mind. Other things you might want to consider if you’re going to be hiring somebody is that you got a subcontractor agreement that you’ve put together. Have you worked with those before, Susan?

Susan:  I have. There are some things that you want to make sure are in them, an hourly rate probably, non compete basically saying they can’t go to work for your clients, that directly that they might not be able to work with any other clients that your company has. It’s harder to say oh you can’t do other FileMaker development, you can’t say that.

Don:  No.

Susan:  But you can say with my clients, you cannot work directly, and you have to make sure that there’s no conflict of interest there. The other is to make sure there’s confidentiality, that you’ve signed that anything they see is private and can’t be shared.

Don:  And that any NDA you’ve been subjected to, they are subjected to as well as a contractor for the firm.

Susan:  Absolutely. And the other is to make sure you know who owns the code. All of that is found in standard subcontractor agreements. Most subcontractors are used to signing these. It’s not going to be out of the ordinary if they’re asked to, probably more out of the ordinary if they’re not asked to.

Don:  Yeah.

Susan:  So if you don’t have one, if you don’t have a lawyer, if you don’t feel like investing that, look on the internet, there are some templates you can start with until then. But I do actually recommend pulling in a lawyer from your state, minimally to review what you have to start with.

Don:  And if you are consulting with Brandon, you can use his facilities. He has that type of stuff, as well as helping to vet the people and so on. He can do that a lot easier for you.

Susan:  He can totally help you with that. He can walk through it, and he might even have forms that he can take care of it for you.

Don:  Other things you need to do is set expectations, I would think, which is how much time they’re going to get, whether they’re working full time or not, what time of days you can expect or when you would expect them to work, if there’s an emergency, you have to have a fire you got to put out, can you count on them to be available in a reasonable period of time, do they work Saturdays, Sundays, nighttime, holidays, should they be expected to. What’s your feeling on all that?

Susan:  And the other is do they have a full-time job and you’re asking them to moonlight. All those things you have to take into consideration.

Don:  Or if they’re a contractor, they already have existing clients.

Susan:  They have other clients, not just you. And that’s actually a requirement. If you’re hiring a subcontractor, they need to be working for someone else or else by law, you’re going to start to get in trouble if not hiring them as a full-time employee.

Don:  And you have to let them know that they’re responsible for their own taxes, all their filings, and any kind of regulations that they’re required by their state or what have you.

Susan:  Yeah, you’re going to want to get a 1099 form from them, because your accountant is going to want that at the end of the year. If they think you’re withholding taxes, that’s an issue.

Don:  You send them a 1099.

Susan:  Yes, and you can pull those right off the internet, too.

Don:  Yeah. Exactly.

Susan:  Just search for it, and they’re right there. It’s a W9 form they need to fill out.

Don:  Yeah, it’s a W9 form you send to them, and they send back to you, and you send them a 1099.

Susan:  At the end of the year.

Don:  At the end of the year with all their earnings, assuming it’s over $650. These are the things you have to know if you’re going to be hiring subcontractors.

Susan:  That’s exactly right.

Don:  …not a lot of fun.

Susan:  No, it’s not. It’s even less fun if they’re employees quite honestly. The other is that you have to make sure you are setting the clear expectations of when they’re going to work. That’s what we were talking about. Unlike an employee, you can’t say there’s no vacations this week, we’re on a deadline. You can’t say that. Their flexibility to work when and how they want. You, of course, have the option to not work with them. You need them. You have to keep those things in mind as well.

Don:  Yeah, and then some other issues … Well back to this actually. This is really an issue of communication and setting expectations.

Susan:   Absolutely.

Don:  You got to communicate on a whole lot of different points. So you got to make sure that your subcontractor agreement form covers all of these items, and when there’s gray areas, you need to dig into those with them, make sure they understand it. If they can’t live with some of this, that’s part of the vetting process, then you need to find somebody else.

Susan:  Absolutely. You know, some subcontractors are more experienced doing this than others. If you’re hiring somebody that has a full-time job and is just doing this as a moonlight on the side, they’re going to be less experienced doing this than an experienced subcontractor that that’s all they do is work for other companies. Just keep that in mind as you’re talking to them, and don’t assume anything. Don’t assume anything.

Don:  Other things you have to consider when you’re doing this, by the way, is how do you track time.

Susan:  Right.

Don:  Do you … What if the time they’re doing on a job is way out of line? You were expecting 10 hours, and they’re doing 30.

Susan:  Some of that comes into project management. How are you managing that project?

That is. But first, you want to talk about what is the expectation. Are you asking them to quote a flat fee and that’s all they’re getting paid, and they have to do the whole project based on that flat fee, or are you doing it by the hour, you’re paying them by the hour, you’re billing your client by the hour, all that needs to be negotiated and clear up front, just like you would with a client.

Don:  And you have to set the expectations of what exactly they’re supposed to do. You’re supposed to do this many layouts, they’re supposed to have this exact functionality, and tie together and so on, here’s what the user experience needs to be, this is the themes we’re going to use and on and on and on, and reports of course, how many reports there are going to be, what happens when something doesn’t work.

Susan:  Right. That’s a big one too. What if you as the subcontractor screwed up? Do you fix that on your own dime? Do you fix that on your client, who is the development company, do you fix it on their dime, or you’re fixing it on the client’s dime? Different clients and different companies do it different ways. So make sure it’s clear up front how that’s being handled. If you’re a junior developer, somebody who’s just starting out, your mistakes might be more easily paid for than a more senior developer because of the expectation, because of the lower hourly rate that you’re charging and those kinds of things. But as a senior developer, if you screw it up, it’s probably on you because if the client won’t pay for it, they won’t pay for it.

Don:  And my experience has been with almost all subcontractors, they know when they should have done something right.

Susan:  Yeah.

Don:  They know when they messed up. They didn’t know it at the time necessarily of course.

Susan:  Right. Or they wouldn’t have done it.

Don:  But when you brought it to their attention, they’ll you know, that’s on me, let me get it fixed up as soon as I can.

Susan:  You know, even with some basics, like are you using a software to track your time, does the client see your notes that you put into that software.

Don:  And you have to provide that. In fact, I need that as a contractor form from my subs to say I need to know what you did, I need decent enough notes that I can reconstruct it. I need to know what scripts you wrote or modified, layouts you worked on, that kind of thing, reports you did. It doesn’t have to be super detailed, but a nice overview, and where you left off. Another thing, this is something I’ve never been able to get from anybody. It’s hard to get them to keep time anyway, but to ask them when they’re going to work on it again, you might as well be asking for the sun and the moon and the stars.

Susan:  That’s part of that communication and setting a commitment with them. We’re going to talk about that in a minute, I think, but as far as being paid and getting paid, do you expect the subcontractor to send you an invoice? If so, how often? Is it every two weeks, every month?

Don:  Yep.

Susan: You don’t want in three months to get an invoice for three months of work that you didn’t know was going on.

Don:  Yeah.

Susan:  And all of a sudden, you owe all this money.

Don:  For example, I bill twice a month, for the first 15 days and then from the 16th to the end of the month. I ask on the 16th, send me a bill for the first 15 days, and on the first, send me the bill for the last whatever number of days. Most of them are very good about that because they want to get paid.

Susan:  That’s the other is how quickly do you pay, do you pay on a net 30, do you pay instantly as soon as you receive the invoice. Remembering that these subcontractors, this is their livelihood. They are not an employee that gets a paycheck on a regular basis. They have to pay their rent, too.

Don:  Yeah.

Susan:  So withholding money is rough, even if your client is withholding money from you. You have to meet those obligations too.

Don:  If a client’s payments are lagging a little bit, I generally go ahead and make the payment to my contractor to keep them going.

Susan:  Mm-hmm.

Don:  I have a contract. I’m the business guy, and they’re working as the subcontractor, and I have a responsibility is the way I feel about it.

Susan:  And if you don’t have the money to do that, you should be telling them to stop work because that’s not really fair to them.

Don:  Good point. There’s another thing that we wanted to talk, and then we’re going to have to get going on this. We don’t want to go too long. But that was what happens when you don’t follow a lot of these rules, set these expectations and these communications, don’t have clear communications. What is your opinion on that?

Susan:  One thing is that you might find a developer doesn’t commit to you as much. They might be saying oh I’ll give you 20 hours a week, and then all of a sudden, you’re only getting five, and you don’t understand why, but you’re past due on six bills to them. Okay, that might be why. The other is being clear, do expect to get less, because as a rule subcontractors over commit. Do expect if they say 20 hours, you’re probably going to get closer to 10 to 15. It might not always-

Don:  Life happens. They have things happen. They got a flat tire or problem like that. Everybody has these things that happen every day.

Susan:  Yeah.

Don:  The other thing that can happen even when everything is running well, is they disappear. I think you called it ghosting.

Susan:  Ghosting exactly.

Don:  And they just turn into a ghost, and it’s like they never existed, you can’t find them. Even the most sensitive instruments in the world can’t track them down.

Susan:  It does not matter how good you are at your job if you aren’t there to do it, you’re worthless.

Don:  Yes.

Susan:  That’s something to consider as a subcontractor. If you’ve been working with someone, and you’re going on vacation, and you’re turning off everything, that is totally fine. Just tell them.

Don:  Yeah. Communicate.

Susan:  Hey, I’ll be back in a week.

Don:  I think that’s the whole center thrust of what we’re talking about here today of setting expectations as clear communications on a wide variety of subjects and issues.

Susan:  Yeah, absolutely.

Don:  Without setting those things and making it so your consistent throughout as a contractor and responding to them consistently as a subcontractor, you’re going to have problems.

Susan:  Avoidance and assumptions, they’re going to take you down a really slippery slope, so talk to each other, don’t assume, and don’t avoid the tough issues. Talk about them.

Don: All right. Well, I think we’ve covered as much as we can today. We’ll be back next week with another, with a third in this series, and we’re going to be talking about … Susan?

Susan:  We’re going to be talking about how you can manage subcontractors once you have them in the fold, how you can manage them as a contractor, and then also as a subcontractor, how you can manage your work a little bit better to be a little more fluid with your clients.

Don:   Okay. That’s going to be in a week, so join us. You’re going to learn a lot of stuff, and we’d love to hear some feedback as well. We’ll see you next time.

Susan:  Thanks, guys.

Don:  Bye-bye.

About Susan Fennema

Susan helps you gain control of your business through process development, organization, and structure of your business operations and projects. From developing processes to coaching project managers, she can help you get beyond the chaos.
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