Last reviewed 16 October 2020

For many organisations, the Covid-19 pandemic has underlined the importance of selecting and managing external work teams carefully. Contracting out tasks does not mean contracting out health, safety and wellbeing responsibilities. Jon Herbert reports on a recent White Paper from Alcumus.

Many businesses depend upon using large numbers of contractor employees. They are often busy on multiple tasks across multiple sites. The challenge, particularly where remote working is involved, is knowing how to screen, engage and manage these workers effectively.

Most businesses would like to achieve zero accident and zero working day loss rates. However, the 2018/19 reality was that some 581,000 employees suffered injuries in addition to 147 fatalities, at an estimated cost of some £15 billion to the UK economy.

Temporary workers are often at increased risk as a result of not being familiar with an organisation’s individual circumstances and hazards. However, a good understanding of how to source and manage safe and reliable contractors can have a significant impact on being able to achieve health and safety objectives and create better workplaces.

Results of a 2020 survey

Alcumus recently published a SafeContractor White Paper entitled Benchmarking Contractor Management. The document is based on survey research carried out between March and May 2020 by the Safety and Health Practitioner, which looked closely at the specific challenges and risks, plus solution tools and techniques, involved in contractor management.

Key findings

The survey, which started before the Covid-19 lockdown, found that companies questioned are planning to use a lower but still significant proportion of contractors in the next two years (44%) and expect a high level of both health and safety and ethical and sustainable compliance.

Challenges involved having to deal with numerous contractors working on simultaneous operations on multiple sites together with a shortage of time and availability to carry out audit work.

Organisations also reported that serious injuries and fatalities, plus increased visibility of contractor performance, would make them focus more clearly on contractor selection.

Importantly, the role of third-party accreditation was mentioned with comments that digital technology could be valuable, but “we don’t use it much”.

Why now?

The strong trend towards outsourcing in recent years has been driven by several factors. These include high recruitment costs for permanent employees, plus acute labour and skills shortages. But because contractors tend to be at a higher risk of work-related illnesses and injuries than full-time staff, understanding the significance of safety implications can be especially important.

This increases the need for careful vetting, especially when — because of the pandemic crisis — many companies are replacing contractors and suppliers. It is recommended that firms and contractors work together closely to minimise risks.

However, there is a danger that good vetting and vetting standards could slip at a critical time, the study warns. Non-compliance in health and safety and a lack of focus on sustainability runs the risk of damaging brand and reputation, with negative publicity and fines. This means that financial issues, modern slavery, anti-bribery, data protection, quality and environmental aspects must be considered closely.

Biggest challenges

Drilling down into the challenges involved in contractor management shows a complex picture.

Simultaneous operations on multiple sites were mentioned by 41% of survey respondents. A lack of time and availability to audit work was cited by 23%. Work category creep because of the familiarity of individual workers was noted by 11%.

Multiple contractors working simultaneously on one single site is also a problem for 9%. Not being able to see who is on site affects some 9%. Being unable to review contractor performance post-project is an issue for around 7%.

When it comes to listing incentives that would focus minds more tightly in effective contractor management, triggers include:

  • serious injuries and fatalities

  • better performance visibility

  • operation excellence strategies

  • compliance fines

  • ISO management certification

  • reduced administrative burdens

  • redundant existing solutions

  • annual sustainability reporting

  • consolidation of IT systems

  • digital transformation initiatives.

Effective tools

However, because sourcing and engaging contractors can be time-intensive work, using accredited contractors can, the study suggests, save time and safeguard important reputations.

But it also finds that more companies (65%) are using in-house selection processes which could negate the reassurances provided by accredited health a safety compliance schemes. Meanwhile, 26% use no software of third-party accreditation at all.

Legislation

The study recommends that all these companies pay serious attention to the Construction (Design and Management) Regulations 2015, which call for businesses to check contractor capabilities before work begins to ensure they perform with the necessary due diligence.

The Modern Slavery Act 2015 also applies to UK-based businesses with a turnover exceeding £36 million. These organisations now need to show how they are mitigating modern slavery risks across their supply chains.

The paper adds that accreditation is recommended because it helps to demonstrate a commitment to sustainability and ethical practices while reducing the business risks of contractor insurance and health and safety non-compliance.

Evolving technology

Contractor management technology with real time information, flexibility and agility, is designed, the paper says, to improve efficiency, show an audit trail of compliance, track suppliers and promote cost saving.

Despite this, some two-thirds of businesses feel that they are not yet enjoying the full potential of digital technology. Only 28% feel it is essential; 64% think it could be valuable but confessed that they were not making much use of it to date.

A small proportion of companies the survey contacted had mapped their supply networks before the pandemic and as a result considered themselves better prepared, with greater supply chain structure visibility and earlier notification of potential risks.

They were also able to view all approved contractors in one place, anywhere, anytime, as opposed to being caught out with no access to paper files, Excel documents, or “little black book” contacts.

Conclusion

Many companies are using more contractors more often, for a range of reasons. One consequence is a greater need for good health and safety management, which is compounded by the Covid-19 pandemic. The situation can be made even more acute where contractor staff move between different sites, leading to a loss of employee visibility.

The Alcumus study recommends that companies re-examine the feasibility and risks of existing contractor/supplier relationships with the aim of updating them.

It notes the importance, as a first step, of having access to the right information but also a comprehensive view of what is happening on site(s), while making best use of existing technology and also building in new processes, training and awareness. Good supply chain compliance vetting is essential to minimise risks.

Best practice contractor management tips

As a checklist, the report suggests that businesses should:

  • pre-qualify contractors

  • carry out a risk assessment and hazard analysis

  • provide contractor training

  • use a contractor management system

  • monitor, review and actively manage issues.