Why Due Diligence is Crucial when Hiring Contractors?

Why Due Diligence is Crucial when Hiring Contractors

If you’ve been working in construction for a long, then you’ll have encountered contractors of every sort. The quality of labour on offer can vary drastically, and if there’s no quality control, you might easily find yourself onsite with someone whose competence is questionable. If it’s your business’s name that’s being associated with a substandard contractor, then you might find that your reputation suffers tremendously.

As such, it’s worth researching into the background of a prospective contractor before you make the decision to hire. This process is called due diligence.

What is Due Diligence?

Due diligence is a general term, used to refer to any investigation performed by a party to a prospective agreement. It might take the form of an audit or review. In the world of digital age business, it’s typically performed by a business that’s about to acquire another business. You want to make sure that you’re going to get what you pay for, and that there won’t be any nasty surprises.

What is Due Diligence

The same process also applies to recruitment. If you’re hiring your own staff, then you can get them in for an job interview process. If you’re hiring a contractor, on the other hand, you might be proceeding with little more than a recommendation from a friend or colleague. You need a plumber; someone onsite mentions that they know an plumber or plumbing company; you make the phone call.

Why does Due Diligence Matter?

In construction, due diligence can be enormously consequential. If the person being drafted in isn’t competent, or, worse, isn’t qualified, then the company might find itself exposed to severe reputational and legal risk. At worst, you might find yourself facing an embarrassing, public reprimand from the regulator. This is the kind of thing that might be foremost in the minds of your would-be clients for years afterwards. While you can limit the damage with builder’s insurance, you can’t erase it entirely.

Due diligence checks for contractors and builders

Now that we’ve established what due diligence does and why it’s important, we might think about the form that it should take.

Visit a past project

If your would-be contractor already has the experience, then you might ask their previous employers and colleagues for a reference. The best solution here is to visit the projects they’ve worked on and inspect the quality of work for yourself.

Online checks

Why Due Diligence is Crucial when Hiring Contractors - Online checks

If you can spend around ten minutes googling the person in question, and the company they’ve worked for, then you might uncover all manner of red flags. Look for reviews. A dissatisfied customer isn’t grounds for suspicion, but a pattern of them might be.

Company status

If the contractor’s company isn’t registered with Companies House, then they aren’t officially active and trading.

Check accredations

If the work being done requires an accredited tradesperson, then you should check with the required body that your would-be hired is accredited. This means the Gas Safe register for plumbers and engineers, NICEIC for Electricians, and FENSA for window fitters.




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