Contractors may form a valuable addition to your workforce, however, the unfortunate truth is that their work is more likely to be risky to your business. By having high-risk work conducted by your contractors, you are likely to feel an impact on your overall costs due to increased safety measures and training. But, the real question is, why is it so common for contractors to work unsafely and is there anything that you can do about it? How can you reduce the costs associated with dangerous jobs?
The Risks of Hiring Contractors
Hiring contractors is an excellent way to meet varying workloads and fulfil skill-specific requirements. However, bringing them onsite comes with several inherent risks. Increased risks arise as your contractors will generally have:
- Less knowledge – your contractors aren’t as familiar with your business and its safety management systems and processes.
- Less commitment – your contractors aren’t as committed to the ongoing wellbeing of your business as they are often working on short-term, finite projects.
- Less supervision – your contractors, especially when carrying out specialist work, are often not subject to the same guidance and controls as your employees.
The way in which your contractors are hired can make a difference too. While they may have the perfect skillset, if it is not balanced with the right safety practices, there can be additional risk factors. Not only do your contractors increase the chance of existing hazards occurring, but they can also introduce new ones. And, when hazards occur, they can come with a significant business cost.
The Cost of Unsafe Work
Unsafe work is any activity that poses a health and safety risk. The fact of the matter is that contractors, who often lack the supervision, knowledge and training of your employees, are more likely to engage in unsafe work. And, hazardous work can lead to safety incidents, injuries and illnesses, all of which can come with substantial costs. The cost of unsafe work can include:
- Workers compensation premiums – accidents and injuries can result in months of lengthy litigation cases.
- Medical expenses – if any of your employees or contractors are injured or catch an illness due to unsafe work, you are going to have to fork out for medical expenses.
- Equipment damage – when an incident results in damage to equipment and machinery, you are going to have to cover the cost of repair or replacement.
- Retraining – if either your contractors or your employees are unable to work due to sustained injuries, you are going to have to invest in recruiting and retaining their replacements.
- Decline in morale – the aftermath of an accident can go far beyond the initial financial cost, threatening your workforce’s physiological health and their ongoing productivity.
- Negative publicity – when a serious incident occurs, there can be a significant amount of negative publicity which will impact consumer confidence and your bottom line.
As you can see, not all the costs are direct ones such as legal and medical expenses. The indirect costs of negative publicity and lack in consumer confidence can, in fact, be even greater. Fortunately, the cost of unsafe work, can be greatly reduced through the implementation of an effective contractor management system.
How an Outsourced Contractor Management Solution Can Help
An outsourced contractor management solution can serve as an extension of your organisation’s health and safety management system. Ultimately, the services they offer can help you to reduce the costs of unsafe work that come with engaging contractors and minimise the risks, ensuring that you uphold your health and safety requirements, keeping all workers safe throughout the engagement.
Some of the contractor management services that should come with a comprehensive management program include:
- Prequalification process – ensuring that all potential contractors fit your requirements in terms of training, education, skills and health and safety practices.
- Ongoing Contractor Compliance – once a contractor is prequalified, theyt remain so through the period of engagement.,
- Software platform – a system to record contractor data such as licences, insurances and registrations, and keep on top of renewals throughout the contract.
- Safety induction and training – helping you to ensure that all of your contractors have received the necessary training and are familiar with your WHS policies and procedures before they are on site.
- Communication – ensuring your health and safety requirements are clearly communicated to the contractors at all times.
- Incident reporting – improving safety and reducing accidents by allowing you to receive feedback from your contractors, giving them a voice and helping to improve your overall health and safety management
Reduce the Costs of Engaging Contractors
By effectively preparing for contingent workers in your business, you can enjoy the benefits without putting your business at serious risk. The key is in managing them properly.
Contractor management systems form a vital part of the solution, ensuring you are able to prequalify your contractors, effectively collect and verify data and deliver necessary training and health and safety communications. However, the system only works if it is used for all contractors, and there is consistency in your contractor management. By trying to implement different systems for different contractors, the costs of dangerous jobs may increase even further.
For over a decade, Conserve has helped organisations overcome contractor management 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.
Subscribe to our newsletter