According to research, non-fatal workplace injuries result in almost USD 60 billion as direct U.S worker’s compensation cost every year. This is more than USD 1 billion a week spent by companies on these injuries. This includes both direct costs such as medical expenses, compensation payments, legal service charges, as well as indirect costs in the form of accident investigation, replacement employee training, lost man hours and so on.
With cases of workplace injuries making headlines every now and then, it’s clear that contractor governance, compliance, and safety have not always been given the priority they deserve. Being a part of the contingent workforce, contractors are largely considered individual contributors. With little liability bonds with the employer, they’re seldom indoctrinated within a company’s overall safety culture. Apart from this, contractors are often required to perform non-routine tasks at locations that aren’t under the purview of an official health and safety manager. In such circumstances, an unqualified, unskilled contractor performing a high intensity task can lead to a workplace fatality.
The good news is – there are federal and international compliance mandates requiring companies to ensure that their contractor safety requirements are fulfilled. The increasing stringency around process and personnel safety regulations and standards, both internal and external, has made contractor safety management programs a vital component in managing the outsourced workforce. Much like contractor performance, organizations also need to monitor their contractor safety through a strong established maturity model.
Key elements of contractor management programs include:
- Contractor selection
- Documentation
- Risk assessments
- OHS/HSE training and orientation
- On-site supervision
- Evaluation and lessons learned
You can implement these steps to create a solid contractor management program:
Closely Engage with Stakeholders: Figure out all the key stakeholders within your company and involve them in the contractor management program. Apart from executive buy-in, you need to reach out to on-site employees who are ready to advocate for your program. Also ensure that you are exploring new ways through which technology can be leveraged to simplify your program such as automating routine tasks or expanding functionality of existing platforms.
Identify Risk Triggers: Evaluate your organization’s risk tolerance level and figure out the corresponding measures you need to incorporate into the contractor management program. Can you start with a higher risk tolerance and slowly decrease it with time? Do you want to narrow it down according to project cost, facility, or vendor. Ensure you have answers to all these questions before you launch your contractor management program.
Set Proper Evaluation Criteria: One of the best things you can do to manage contractor safety successfully is to build it into the subcontracting process right at the beginning. Carefully determine the criteria of prequalifying approved vendors from an EHS purview. Clearly outline the performance, documentation and training standards that contractors need to meet and communicate the same to them.
Implement the Program: Once all the standards have been established, you can outline the nuances of your program on paper and ensure that all contractors and stakeholders understand and agree to the organization’s expectations. The possible approaches that you may take is to ask contractors to read and sign a contractor safety handbook or train them before they are allowed to go on-site.
Reiterate and Future-Proof: Once the program is implemented, analyze the results and iterate the process accordingly in order to make it robust over time. Determine how regularly your contractors will be required to be re-approved to be able to work with your organization. You can tie this up with contract renewals or set up your own vetting criteria. Also, ensure that there is a designated person or team to monitor contractor status and check documentation.
