Choosing the Right Solution for Contractor and Supplier Management

Contractors and suppliers can provide many essential benefits to businesses such as expertise, efficiency, and cost savings.

In addition, companies working with contractors and suppliers can scale their business up and down depending on market demand.

The benefits of outsourcing to suppliers and contractors is clear, but the associated risks are largely unseen. To add fuel to the fire, the breakneck pace of change and the pressures of financial reality can cause important, risk-mitigating considerations such as contractor safety to be overlooked — which could be not only an ethical disaster, but a business disaster as well.

Contractors working on your site and suppliers providing materials should be considered internal employees. If contractors are injured on the job, it can seriously damage your organization’s reputation and impede your growth.

To maximize the benefit and minimize the risk of these relationships, companies and their suppliers must commit to a common culture of safety. This means companies need to stay engaged with their contractors beyond simply hiring them. Companies should:

• Regularly collect information from their suppliers that demonstrates a commitment to safety such as incident rates (lagging indicators) and safety programs (leading indicators).
• Continuously monitor suppliers’ insurance coverage to protect the company in case something does happen.
• Audit worksites on a consistent basis to ensure that safety policies are enforced.
• Monitor the condition of equipment that contractors use to carry out their jobs.
• Ensure each contracted worker has the proper licenses and certifications to perform the job safely.
• Provide site-specific training required for each position.

Carrying out these tasks on a regular basis can seem overwhelming. Companies that choose to tackle contractor and supplier management on their own face risks to contractor safety, their bottom line, and their brand. Although worker compensation laws in many states don’t allow employees to sue their employers, they can still sue the company that hires the contractor.

To minimize risks and ensure proper compliance with all contractors, many organizations are turning to contractor and supplier management solutions.