Contractor Engagement - 3 Tips to Reduce Your Compliance Risk
Whether you’ve been working with contractors for some time, or are in the early phases of considering it, the truth is most organisations will need some additional help with their management. The independent workforce is here to stay; it allows businesses to meet the needs of varying workloads and to temporarily engage specialised services. While there are many benefits, there are also inherent risks.
The Risks of Contractor Engagement
Using third-party contractors offers many business benefits and is a very cost-efficient way for businesses to work with who they need when they need them. However, managing contractors (especially in larger numbers) can be a complicated undertaking. Without sufficient contractor management, you can chance contractors not meeting the specific criteria of your business and industry, which can lead to audits, provisional improvement notices, penalties and even lawsuits. And, the problem is only magnified for industries with constantly changing regulatory environments.
It’s vital that your business is on top of compliance and plays by the rules when engaging contractors. As well as the financial risk of non-compliance comes the brand and reputational damage in the event something goes wrong. Corporate responsibility is highly visible in today’s digital world, so a small mistake at the beginning can lead to big problems for your business down the road.
How to Reduce Your Compliance Risk
There is a lot to think about when it comes to engaging contractors and you want to make sure you’ve engaged an entity that is qualified and priced competitively. But, it’s arguably more important to make sure that they are compliant with your pre-defined criteria. To help reduce the chances of a problem, don’t miss the first hurdle. Here are three top tips for hiring contractors that should set you on the right track:
1. Keep the Right Records
From the moment you are considering hiring a contractor, you need to keep detailed records on file. You need to have a system in place that will allow you to find any of your contractors based on name and qualifications. An audit trail of all contractor compliance interactions will help you remain organised and keep track as your project moves forward.
Once you’ve opened a record for a new contractor, you need to see it as the start of an ongoing process. Many things will change over the course of time; contracts expire, certifications require renewal, and regulatory goalposts move. You need to be able to communicate changes to all relevant parties as efficiently and effectively as possible. Ultimately, how you manage your paperwork has a considerable impact on compliance.
2. Classify Your Contractors
It is important to classify your contractors according to their risk profile. Higher risk contractors will have a more stringent set of criteria that will need to be met. Lower risk contractors will have a smaller set of compliance requirements, allowing them to get on with the job without jumping through unnecessary hurdles. The compliance criteria associated with each risk profile need to be carefully thought through, keeping in mind WHS legislation, financial liabilities, safety documentation and industry standards, to name a few.
A clear compliance process for your contractors, that shows your commitment to assisting them in achieving a compliant status is important. This will include compiling questionnaires and filing documentation such as professional qualifications, insurance certificates and industry licences. The compliance process can be used as a guide for independent contractor engagement, ensuring all managers and relevant staff are aware of the necessary policies and compliance criteria.
3. Learn the Laws
You need to be up to speed with all laws and regulations governing the engagement of contractors before they come on site. While you won’t treat your contractors in the same fashion as your employees, you do have several obligations. It’s vital that you learn what they are and provide the necessary information, training and supervision to your contractors to keep everyone safe.
You will also need to make sure you are well informed about any specifics regarding individual areas of work. Often, contractors are hired to work in specialised fields and, as such, will need specialised machinery or equipment. During the hiring process, you should list specifics regarding this and make sure you have all the necessary supporting documentation from your contractors (ensuring they are licenced and competent) before they turn up on site.
How Contract Management Systems Can Help
Even before contractors start working for you, there is a lot for you to do. By having a compliance solution that facilitates your contractor data collection and storage, you can benefit from increased security, fewer manual errors and automated notifications.
By learning the laws, correctly classifying your contractors and keeping the right records, you will significantly reduce your compliance risk when hiring contractors. The next step is ensuring you keep it up through the entire contractor lifecycle. Contract management systems take away a lot of the complexities of managing contractors, so you can ensure workplace compliance while having the best team possible working on your projects.
For over a decade, Conserve has helped organisations overcome contractor compliance challenges. We can help you develop a contractor management service that will be not only effective but will make your organisation safer, while minimising your overall risk. Request a demo now or visit the Conserve page for more great content.
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