Does Prequalification Help Contractors Improve Safety?
Last October’s National Safety Council’s (NSC) Congress & Expo showed that managing contractor safety continues to be an important topic for many safety professionals. As a follow-up to a previous post on contractor and supplier safety management, we provide a recap of a technical session where NSC researchers presented on a research study that asked the question: what is the effect of third-party prequalification for contractor management systems and safety records? More specifically, the researchers asked if contractors and suppliers that participate in outsourced prequalification see positive results in their safety performance.
In partnership with BROWZ, a provider of supplier prequalification solutions, NSC researchers analyzed a database of over 17,000 suppliers registered with BROWZ from 2007 to 2015. The database contained reported information on lagging metrics: TRIR (Total Recordable Incident Rate), DART (Days Away, Restricted or Transferred) rate, and LWR (Lost Workday Rate). Through a series of analyses by industry code and comparisons to national rates reported by the Bureau of Labor Statistics, they came up with some interesting conclusions.
Prequalified Contractors Achieve Better Performance
It appears that contractors and vendors that participate in third-party prequalification tend to have better performance on traditional safety statistics than national averages. Contractors in the database had a TRIR, DART and LWR that were 34%, 48% and 65% better respectively than national intra-industry averages. In fact, the performance on these statistics was better for the supplier database in every industry and for almost every year.
Another analysis looked at improvements in TRIR, DART and LWR of contractors over time to see if they experienced better safety performance the longer they participated in prequalification. The researchers compared the contractor rates in 2015 to the year in which they began prequalification. While the results were a little mixed, they found that organizations that had been in the BROWZ database the longest had the greatest improvements over time. For example, those that started prequalification in 2007 saw an average improvement of 57% in TRIR by 2015, while the national intra-industry average in TRIR had improved only by 41%. Suppliers in the database thus experienced an improvement in TRIR of almost 16% above what all companies experienced between 2007 and 2015.
The Best Get Even Better
Finally, researchers wanted to look at improvements in TRIR, DART and LWR rates between “higher performers”, i.e. those in the database doing better than BLS averages, and “lower performers”, i.e. those in the database doing worse. You may think that the lower performers would have a better rate of improvement year over year, because it seems easier, for example, to improve from a TRIR of 6 to 5 rather than from 1 to 0. But researchers observed the opposite: the higher performers continue to see greater rates of improvement in TRIR, DART and LWR year over year. This seems to indicate that prequalification can even help those suppliers that are already performing above industry averages.
While we shouldn’t imply that the research study validates the BROWZ prequalification process (NSC researchers did not want to do the same either), the analyses suggest that prequalification programs in general, whether outsourced or in-house, can make a significant difference in the safety performance of contractors, not just contracting organizations. Prequalification can continually improve lagging metrics, and is beneficial to all organizations (even the higher performers). A robust prequalification process is a best practice in managing the safety performance of your contractors.
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