Insights on Environmental Health & Safety (EHS), Operational Risk and Product Stewardship

Contractor Safety Monitoring Lacking at Many Companies, Sphera Survey Shows

May 1st, 2018
Sphera Research
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Contractors are such a valuable component of many companies’ success stories, so why is it that contractor safety is sometimes out of sight, out of mind?

Thanks to technological and logistical advancements, it’s truly a small world after all for companies doing business in 2018. But even though the world doesn’t seem as large as it once did, companies still struggle with safety supervision for their contractors. For obvious reasons, it’s much easier to track and focus on internal safety protocols to meet regulatory or even organizational compliance requirements, but being lax on contractor safety can have huge repercussions for an organization—especially if a contractor or subcontractor is working on-site.

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Unsafe Is Costly

For example, the U.S. Occupational Safety and Health Administration’s Safety and Health Rules for Construction say: “In no case shall the prime contractor be relieved of overall responsibility for compliance with the requirements of this part for all work to be performed under the contract.” And the penalties are not cheap. “Serious” violations can lead to $12,934 in OSHA penalties, failing to abate the problem can lead to daily fines of $12,934, and “willful” or “repeated” violations could cost companies $129,336 per violation.

In the recently released EHS Today “Industry Insights: Contractor Safety Management” survey, which Sphera sponsored, almost a quarter of the respondents—23 percent—said their teams have increased their resources by focusing on contractor safety in the past year compared with 67 percent who said the focus had remained the same and 10 percent who cited a decrease.

The survey responses came from 362 companies that use contractors with the biggest portion of respondents (39 percent) coming from companies with more than 1,000 employees. The manufacturing industry was well-represented in the study as 38 percent of the respondents said their company worked in that area. The next closest industry cited was construction at 14 percent. About a third of those surveyed (34 percent) said they use more than 100 contractors compared with 41 percent who said they use 10 to 99 of them.

Assessing Risk

Being able to assess contractor risk is essential, so how do companies manage it? According to the survey results, most (82 percent) do so internally within their own departments. Just 14 percent use a third-party assessor while 12 percent said they do not assess their contractors. About a third of these assessments (32 percent) are performed irregularly at the company’s discretion while 23 percent said they perform them at the start or renewal of a contract, and the same percentage of respondents said they do so yearly. One in 10 (11 percent) said they never assess contractors.

While most companies clearly monitor their contractors, when asked if they “actively manage a database of contractors and periodically report on contractor safety lifecycle workflow updates to senior management,” the results were mixed. A little less than half (45 percent) said they do, while the rest (55 percent) said they do not.

There is a bit of a disconnect at play if you take into consideration that almost all respondents (93 percent) said they “strongly” or “somewhat” agree that safety performance is an indicator of reliability. Also, nearly 4 out of 5 respondents (79 percent) responded that they “strongly” or “somewhat” agree that they “are only as reliable as the contractors we use.” If that’s the case, why aren’t more companies spending more time managing and monitoring contractor safety?

Separately, almost two-thirds of respondents (64 percent) said they prequalify and manage contractors, suppliers and vendors with internal resources while 26 percent said they “do not” pre-qualify contractors or “do not know” if they do so.

As with any Environmental Health & Safety-related issue, powerful integrated risk management software goes a long way toward ensuring worker safety internally—or even externally with contractors.

Contact us to learn more about how our solutions can help with contractor safety. Click here to download the full report.

Sphera Research

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