Whether you work in construction, tech, or some other industry, you’ve likely heard of subcontracting as a potential career path. But what exactly does a subcontractor do, and why could it be advantageous to become one? Below, we explain the pros and cons of working as a subcontractor – so you can decide if it’s the right option for you.
What Is a subcontractor?
A subcontractor is a freelance worker, often a specialist, who is paid by a general contractor to help complete a project. When companies or businesses need help with a specific task, they often hire a contractor to do the work for them. These contractors, in turn, will sometimes hire subcontractors who can provide them with the labor and specialized skills they need.
If you work as a subcontractor, you’ll build relationships with general contractors who will turn to you when they need an extra hand. Rather than receiving steady work from a single employer, you’ll likely connect with multiple contractors, each of which will give you work on a short-term basis.
What are the pros and cons of being a subcontractor?
As great as subcontracting can be for many American workers, it does have its downsides. By looking carefully at the pluses and minuses, you’ll be able to make an informed decision as you plot your next career moves.
What are the pros of being a subcontractor?
It’s no surprise that millions of Americans choose to be subcontractors in construction and other industries. For many workers, the arrangement simply makes sense. Here are some of the benefits you can expect to enjoy if you decide to become a subcontractor.
It’s Easy to Specialize
While general contractors need the wide-ranging knowledge to manage an entire project, subcontractors can focus on mastering a specific skill. Imagine, for example, that you’d like to work in construction. If you’re particularly interested in roofing, you can make it your specialty – and then look for general contractors who will hire you to complete the roof-related components of larger projects.
You gain flexibility
Subcontractors are free to choose their own projects, saying “yes” and “no” as they please. If you’d like to work especially hard and save up before the holidays, you can take on all the jobs you can handle. If you’re feeling burnt out and want to cut down your hours, you can turn a few interested contractors away. You’re also free to choose between the contractors who are vying for your services. This flexibility is hard to come by for standard employees who are tied to a single company – and it can have a major impact on your life.
You can receive higher pay
Subcontractors, especially those with a specialized skill set, can often charge more than what a traditional employee receives. That’s because subcontractors typically sign short-term contracts. Instead of having to hire a standard employee who will be at the business indefinitely, a contractor can hire a subcontractor who will only work for as long as the project lasts – and this allows the contractor to pay significantly more per hour.
What are the cons of being a subcontractor?
While working as a subcontractor certainly has its upside, the deal isn’t flawless. What you gain in flexibility and higher pay, you might lose by having to fend for yourself without an employer to protect you. Here are three of the most significant downsides to working as a subcontractor.
You don’t receive employee benefits
Subcontractors don’t receive health insurance or vacation time, meaning they have to figure out both on their own. Higher hourly pay could make up for the lack of benefits – but make sure you’re factoring the new reality into your future budget.
The schedule is inconsistent
Subcontractors might go three weeks without landing a gig, then suddenly receive three jobs all at once. This can be exasperating – especially for anyone who appreciates the security of a steady paycheck and the familiarity of a weekly routine.
You’re responsible for your own taxes
If you’ve been working as a traditional employee, then you’ve probably gotten used to seeing money taken out of your paycheck for taxes. Then, when tax season comes around, a healthy refund from the government can feel like an extra bonus. Well, the situation for subcontractors is considerably different. You’ll be responsible for paying your own taxes, which you’ll have to remove yourself from your hard-won earnings. This is especially important to consider when you’re figuring out your budget. Those checks from a general contractor are nice to receive – but don’t forget that a significant portion of the money is destined for Uncle Sam.
Becoming a subcontractor is a great option for specialists who want flexibility and higher pay. It also brings several complications, including a lack of traditional benefits and a hectic, unreliable schedule. Luckily, it’s completely up to you whether you take this path or not. If you think the good outweighs the bad, then a brilliant career as a subcontractor could be just around the corner.
About the Author: Ben Clabault is a freelance writer from Sandwich, Massachusetts. He has spent much of his adult life traveling through Latin America. He currently lives with his fiance in Santiago Atitlan, Guatemala. His areas of expertise include travel, marketing, SaaS, and global cultures. You can find his work on Copyfolio and reach out to him on LinkedIn.