Contractor compliance is a complex part of contractor management that ensures contractors and suppliers are adhering to specific requirements of their client. As an organisation that engages contractors, you need to have a robust compliance program in place to minimise the financial and legal risks of working with contractors. Moreover, your compliance program needs to ensure that contractors don’t risk the health and safety of those working on or visiting your work sites.

Your contractor compliance program is vital in reducing your overall risk exposure, but there are many ways in which it can fail. Here are ten reasons why your contractor compliance program might have bombed and what you can do about it:

1. You Didn’t Prequalify Your Contractors

Working with contractors has is risks, which makes it vital that you know their qualifications and experience. When contractors are engaged without the necessary prequalification checks being carried out upfront, it can lead to things going wrong during the engagement. Prequalification reduces the risk of hiring contractors by implementing an initial assessment. The screening process ensures that contractors meet necessary standards, have the right qualifications and the competency and capacity to fulfil the contract.

2. Your Compliance Program Wasn’t Continuous

While it makes a huge difference if you prequalify your contractors, that isn’t where your compliance program should end. If you only check once that your contractors have the necessary experience, qualifications and insurances, you risk running into problems when these expire, legislation changes or your project is extended to include a broader scope. Contractor compliance should be a continuous process whereby you constantly monitor data and keep on top of renewals and expirations. What’s more, you should continually check on your contractors to ensure they are meeting your workplace health and safety standards and delivering as per their contract.

3. You Have No Strategy for Enforcement

It’s all well and good checking that your contractors meet your workplace standards’ however, what do you do if they don’t? Contractor compliance programs can fall down when there are no consequences when contractors don’t live up to their end of the bargain. You need to have a disciplined and unified system in place to enforce compliance criteria. This will, of course, differ for each organisation but could include restricting site access, tying compliance to compensation and restricting future bids for work.

4. You Don’t Communicate Effectively

Communication is key to many parts of business, and contractor compliance should be no different. It’s vital that all contractors and their workers understand the need for compliance, especially those on remote sites. Messages regarding compliance should be clearly and frequently communicated. If you haven’t established effective lines of communication with your contractors, they’re much less likely to make you aware of workplace compliance issues. Treat your contractors as an extension of your team, a partner where transparency is valued.

5. You Aren’t Making the Most of Technology

If you manage your contractor compliance program using a series of spreadsheets, you are making life far more complicated than it needs to be. Outdated processes and methods can make it near on impossible for your employees to find data and keep on top of licenses and insurances. Compliance management software is able to take away a huge amount of the administrative burden that comes with contractor compliance. With the help of technology, you can ensure all your data is in one easy-to-access place, processes are automated, and notifications are sent instantly.

6. You Rely Too Much on Technology

While software can do some amazing things and make contractor compliance a lot more efficient, it shouldn’t entirely replace the human factor. Technology can only take you so far, and human support will always be required alongside it. An option to consider is a specialist outsourced provider who possess the required skills and necessary scale to support all of your contractors. If your contractors have questions, you need to ensure that someone is there to help and support them through the compliance process. The alternative is that they flood your internal resources with support requests, carry on with work regardless, and ultimately create an increased risk to your organisation.

7. Your Processes are Too Complicated

It can be tricky for contractors to keep on top of all of the admin that comes with working for multiple companies. If your compliance processes are overly complex, they are much more likely to drop the ball. To improve your contractor compliance program, make sure your processes are as simple and as efficient as possible, and consistent for every contractor you work with. There are third party providers that can provide consultation around industry best practice and what is considered optimal for your organisation.

8. You’ve Put Too Many Barriers in the Way

You want your contractors to feel like an extension of your workforce and to embrace your compliance program as their own. To achieve that, you need to make it as easy as possible for them. Make sure you’ve explained what your program aims to achieve, how it will do it, and what your contractors need to do to help the process. Contractors need to consider their own liability too, so knowing that you have standards and procedures in place will likely be reassuring as long as they’re not too complex or expensive for them.

9. You Don’t Have Company-Wide Buy-In

For your contractor compliance program to be a success, you need to have buy-in from the business. This needs to start at the top by making contractor compliance a corporate objective. You need the support in place to implement the systems and processes that will make your program a success. What’s more, corporate buy-in helps everyone to understand that contractor compliance is mandatory, not just a nice-to-have.

10. You Don’t Fully Understand Your WHS Obligations

It’s fundamental that you understand your WHS obligations and your responsibilities regarding your contractors. The first part of pre-qualification involves ensuring that potential contractors have the right qualifications, insurances and safety systems in place based on the type of work being carried out. If you haven’t got the knowledge to know what these should be, your compliance program doesn’t stand a chance.

How An Outsourced Compliance Management Solution Can Help

Implementing an effective contractor compliance program is a huge task. More than just an administrative task, it is an ongoing process to reduce the legal, financial and safety risks associated with engaging contractors. Contractor management platforms can help to streamline workflows and remove manual tasks. By outsourcing this function to a specialist, you get the benefit of years of experience, across multiple industries, combined with a scalable team of experts to support your contractors through the compliance process. Underpinned by the right compliance management software, you gain automation, allowing you more time to focus on the core of your business, safe in the knowledge that your contractors are compliant from beginning to end.

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.

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  1. AffiliateLabz

    Great content! Super high-quality! Keep it up! 🙂

  2. Michelle Bates

    Nice to read all the possible reasons compiled into one source. Some are obvious but there are a few that I wouldn’t have thought of straight away. Good article in any case. Would be keen to read a further break down


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