If you’ve ever run a project, you know that your subcontractor network can make or break your schedule, quality, and profitability.
So, what is a subcontractor? In simple terms, a subcontractor is a business or individual hired by a contractor to carry out a defined part of a project. They bring the crews, tools, and trade know-how, while the general contractor oversees the big picture.
“From my perspective, the most important responsibility of a subcontractor is simple to say but hard to do: deliver the scope on time and on budget.” explains Whitney Hill, CEO and co-founder of SnapADU, which specializes exclusively in accessory dwelling units (ADUs) across San Diego.
We’re here to give you some pointers for finding those subcontractors who deliver the scope on time and on budget. In the sections below, we’ll break down the different types of subcontractors, explore the key differences in contractor vs subcontractor responsibilities, and highlight how effective management of subcontractors can streamline projects, reduce delays, and strengthen your construction business overall.
Most contractors already have a basic understanding of the subcontractor vs contractor dynamic, but here’s a refresher before we dive deeper:
The main difference between these roles is contractual responsibility: contractors manage the entire project and deal directly with the client, while subcontractors handle specific scopes and report to the contractor. Here are some of the key distinctions in their roles and responsibilities:
For example, pricing a contractor job with the client is the responsibility of the general contractor, ensuring profitability for the project as a whole. Subcontractors, on the other hand, negotiate their rates (and their team’s rates) directly with the GC based on the specific trade or scope they will perform.
When preparing a proposal or estimate, general contractors should carefully factor in the costs of subcontractors, including labor, materials, and any specialty equipment. Accurately accounting for these expenses helps ensure the project remains profitable and avoids unexpected budget shortfalls. Offering customer financing at the point of sale can further smooth cash flow, allowing clients to pay over time while giving the GC the funds needed to cover subcontractor payments promptly.
A recent survey by the Associated General Contractors of America (AGC) and the National Center for Construction Education and Research (NCCER) found that 92% of U.S. construction firms report difficulty hiring qualified workers, and 45% cite labor shortages as the leading cause of project delays.
Given these challenges, identifying the right construction subcontractors means finding partners who can keep your project on schedule and uphold high-quality standards. Here’s what to look for in a top-notch subcontractor:
“To succeed, excellent communication has to start during estimation and bidding, not after mobilization.” Hill, CEO of SnapADU, says. “The best subcontractors help us clarify all details up front while we still have an opportunity to shape pricing with the client. Waiting to address details until later via change orders or surprise issues hurts everyone.”
Subcontractors cover nearly every trade, including:
Regarding the current demand for different types of subcontractors, Michael Feazel, CEO of Roof Maxx, says, “I think the highest demand remains with the big three: electrical, HVAC, and roofing. These trades require specialized certifications and are often key to passing inspections and staying on schedule.”
This is echoed by Chris Hunter, Director of Customer Relations at ServiceTitan, who says, “Subcontractor specialties in highest demand now include electricians, HVAC contractors, and plumbers relative to the need for energy-saving systems, smart homes, and green plumbing solutions; other high demand specialty contractors include roofers and insulators known for weather protection and energy savings, respectively.”
From bidding to closeout, construction subcontractors are responsible for:
However, the best subcontractors conceptualize beyond their scope of responsibilities. Bennett Barrier, CEO of DFW Turf Solutions, explains, “The strongest subcontractor-contractor relationship is that which thinks like an owner and not a hired hand. A subcontractor who is only interested in finishing his or her scope will always be an average subcontractor. The extraordinary ones pick up things that are not within their scope of operation and present the information.”
Relating this to turf jobs, Barrier says, “When an electrical subcontractor is trenching conduit and sees that it is not properly drained and flags it, the subcontractor demonstrates that he/she is aware of the entire project. This kind of awareness minimizes the risk to all parties.”
If you’re a contractor, you’ve probably heard the terms “subcontractor” and “independent contractor” tossed around — sometimes as if they mean the same thing. The truth is, they overlap but describe different things:
While many construction subcontractors operate as independent contractors (paid via 1099), not all do. Some run incorporated businesses with W-2 employees.
Why this matters when hiring:
Bottom Line: “Subcontractor” tells you what they do on your project; “independent contractor” tells you how they’re classified for taxes and employment.
A subcontractor agreement sets the terms of the relationship. It is your risk-control tool. At a minimum, it should include:
The agreement is also the place to specifically require proper insurance and licenses. Regarding the importance of insurance and licensing in today’s landscape, Hill of SnapADU explains, “Our own insurance requires us to hold firm on compliance, even if that means parting ways with contractors we worked with for years who are not willing to carry proper insurance.”
By including these requirements in the subcontractor agreement, you make compliance clear from the start, protecting your business from liability and ensuring every subcontractor meets necessary legal and safety standards.
Subcontractors are the backbone of any successful construction project, bringing specialized expertise, self-sufficiency, and problem-solving skills that keep timelines, budgets, and quality standards on track.
Equally important is how projects are funded. By offering contractor financing at the point of sale, you can smooth cash flow, ensure timely payments to subcontractors, and provide homeowners with flexible options to move forward with their projects. This helps your business run more efficiently, making it easier to complete projects on time and maintain strong relationships across your subcontractor network.
You bring on a subcontractor when a project’s scope calls for skills, tools, or capacity you don’t keep in-house. The subcontractor owns whatever deliverable you hand off and will give back a finished, inspectable result. In construction, this can mean working with the crew and vendors to plan work or coordinate with other trades.
Typically, yes. Even when a trade license is not required, most states and municipalities still require a business license and permits. You can confirm with your state board or local building department. Then, before you award a subcontract, verify the license class matches the scope and that it is active and in good standing.
It varies widely by trade and region. See our guide on how much contractors make for more insight into average industry pay.
Pay on time, provide clear scopes, and avoid one-sided contract clauses that push all risk downstream.
Obtain the necessary licenses, set up your business and insurance, build a competitive pricing model, and network with general contractors.
Follow Florida’s state licensing requirements for your trade. Start with our Florida general contractor license guide for details.
Follow California’s state licensing requirements for your trade. Start with our California general contractor license guide for details.
