Sourcing and Managing Contractors who are Credible, Safe, and Compliant

Unfortunately, to overcome a growing trend of workers retiring or changing careers, desire to have work-life balance and evolving age demographics, safety and procurement teams are being left with a reactive, 'quick fix' approach to contractor management, just to get the job completed.

The reality is, however, that organizations simply cannot afford to cut corners or let standards fall by the wayside when it comes to the contractors they work with.

So, where can they find contractors with the necessary skills to carry out essential work needed to keep their business running? In our latest blog, Denis Sanchez, VP of Strategy at Alcumus Cognibox provides an insight into how organisations can source and onboard credible and compliant contractors and avoid non-compliance.

You can also download our new guide ‘Contractor Selection and Management in Times of Labour Shortage’ which explores the key aspects that are driving organizations to improve contractor management strategies and establish better working relationships.

What you need to think about

Although the threat of skill shortage is not a new one, it has become worse since the pandemic and is more acute now than ever before. Working with a range of clients across a number of industries, we’re finding that this is creating even more business risks, such as business inefficiencies, regulatory non-compliance and the potential for more incidents and accidents.

This has meant a re-think in their approach to hiring contractors, as organizations can’t keep ‘plugging the gaps’. At the core is the need to hire contractors who have the right skills and are safe and compliant to do the job.

What could be riskier than hiring a new, unknown contractor or sub-contractor? You wouldn’t expect someone to apply for a job that they don’t have any experience in, and the same is true before hiring a contractor.

Contractor management is about getting it right. So, it’s important to assess your contractors not just for health and safety, insurances, financial stability, and ethical and sustainable practices too. That means only hiring contractors who have a strong safety record, the evidence of their experience and a pro-active approach to on-site risk management.  Otherwise, they could end up costing your business money and worse, a fatality. Then there’s also unethical practices to consider, so that you don’t expose your business to reputational damage.

Building a credible, safe, and compliant contractor network

Generally speaking, selection and sourcing decisions are based not only on cost but other factors including quality management programmes and business standing credentials to help you proactively avoid disruption as much as possible.

For organizations who rely on contractors, the key to achieving this is to implement a robust sourcing and qualification strategy that provides the answer ‘Yes’ to three key areas:

COMPLIANCE: If you were audited, could you demonstrate that your business is compliant with the latest regulations?

VISIBILITY: Do you have one consolidated view of your contractor risk profile data?

EFFICIENCY: Do your processes and systems produce cost and resource savings?

While there’s no ‘quick fix’ to resolve the current situation, it really is essential for businesses to think and act strategically when it comes to sourcing and managing contractors. That means building a credible, safe and compliant contractor network to avoid non-compliance, or even worse, causing harm to people.

Steps to source credible contractors

So, when it comes to sourcing, procuring and the ongoing management of contractors, businesses will need to follow these five steps:

1. Build mutually beneficial, long-term relationships with current and new contractors, especially the smaller contractors
2. Have clear communication with contractors on the scope of projects and what’s expected of them when working on your site
3. Implement contractor engagement programmes that helps to educate and support your contractors to perform at their best for your business
4. Establish and communicate common standards and expectations of safety, prequalification, and capabilities
5. Gain ongoing visibility and control of contractor performance and risk management
6. Create internal, streamlined processes of sourcing and on-boarding contractors between procurement, safety, and supply chain functions

This will provide reassurance that contractors have appropriate credentials in place for key aspects such as health and safety, environmental management, and forced labour to meet legal requirements and create a resilient contractor network.

Creating positive outcomes

Making sure that your organization only works with credible and compliant contractors makes sound business sense to minimize a number of risks for your business. The benefits? At its simplest…one true view of risk which will:

• Ensure business continuity in times of labour shortage
• Manage risk and compliance – fines, safety incidents, brand reputation etc
• Reduce admin burden and drive internal productivity and business efficiencies
• Establish a scalable and adaptable risk management strategy

As Denis Sanchez, VP of Strategy at Alcumus Cognibox concludes: “Businesses face labour shortage and an increasing regulatory landscape, combined with higher customer social and environmental expectations. Add to this higher scrutiny not just from their shareholders, also from all stakeholders: employees, business partners and the community. Technology that allows you to connect with safe and socially responsible contractors and provides visibility of risk and capabilities across an entire contractor network is key to delivering these results.”

ABOUT THE AUTHOR

Denis Sanchez is a Chartered Institute of Procurement and Supply (CIPS) member and recent studies include a Master of Science in Procurement, Logistics and Supply Chain Management, Strategy and Sustainability.