Managing contractor safety has been a concern for organizations for many years, and a benchmarking report from ISN Analytics shows that contractor safety should remain a top issue for the foreseeable future. The outsourcing of work continues to grow. According to the benchmarking survey, about 42% of organizations plan to increase their outsourcing during the next 12-18 months.
The survey consisted of questions answered by 161 organizations. Eighteen industries were represented in the survey, from oil and gas and manufacturing to pharmaceuticals. The participating organizations collectively manage over 40,000 contractor companies with over 10 billion work hours.
Contractor Management Survey Highlights
The survey revealed many insightful findings. Almost half of the surveyed contractor hiring organizations reported that between 40% and 100% of their on-site work is completed by contractors, and 23% of organizations use over 1,000 contractor companies. In 55% of organizations, the EHS department owns the contractor management process, which is where the highest proportion of mature organizations house contractor safety management.
The top challenge for hiring organizations is the shortage of a skilled and competent workforce. Some of the other challenges preventing organizations for reaching their contractor management goals are a lack of internal resources, disconnected internal processes and priorities, shortage of qualified contractor companies, regulatory uncertainty, lack of management support and commitment, and budget constraints.
Understand and Manage Contractor-Related Risks
As hiring companies mature, they become more organized and documented in their processes, such as setting visions/targets for contractor management goals, and defining the responsibilities of general contractors and subcontractors. About 95% of organizations that classify themselves as “leading organizations” say that risks involved in using contractors are either “very well understood” or “well understood”, compared to 74% for all organizations. Also, 87% of leading organizations say that contractor risks are either “very well managed” or “well managed”. That number drops to 58% for all organizations.
Regarding risk, the survey revealed that the top threat to hiring organizations to achieving contractor management objectives is the use of subcontractors and ensuring their competency and compliance. Therefore, it’s not a surprise that the top priority among the survey respondents was to improve the safety performance of contractors. When asked about how to achieve better contractor safety performance and drive continual improvement, the main approach among surveyed organizations was to improve communications and expectations with contractors.
EHS Has a Key Role to Play
Although the specific strategies to address all of the concerns and issues regarding contractor safety can vary, we can identify the overall initiatives that EHS teams at contractor hiring organizations should pursue:
- Engage executive leadership and management to gain their support and commitment to EHS initiatives.
- Improve training and education of contract workers to create a more skilled workforce.
- Enhance internal and external communications to clarify expectations and increase contractor compliance.
- Implement a contractor safety software solution to track and benchmark incident rates and the safety performance of contractors.
- Encourage contractors to report incidents, near misses and observations through the same EHS mobile app also used by your own workers
Ultimately, it appears that the way to improve contractor safety management is to perform a gap analysis to identify the weaknesses of your system, and take a targeted approach to address each gap. Using a contractor prequalification service, or implementing a contractor management system in your own organization, can help to identify the underlying issues and put your company on the path to better safety for all of your workforce, employee and contractor alike.
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