Risk management is an umbrella term used in many industries when referring to taking steps towards forecasting and preparing for risk, with the goal of mitigating the risk.
More specifically, when it comes to working with contractors, your organisation should have a contractor risk management plan, to ensure that all employees and contractors are aware of processes and procedures. This will not only protect your organisation from potential risks it will keep your employees and contractors safe.
WHAT IS A CONTRACTOR RISK MANAGEMENT PLAN?
A contractor risk management plan is a plan that ensures the health and safety of contractors or employees working on your site. The development process will ensure that you plan, document, and learn about new procedures for different types of projects.
One of the best ways project managers and leaders can prepare for any risks associated with using contractors is by developing a contractor risk management plan. Your contractor risk management plan should include a short description of your overall risk management approach, summarise the activities or events that pose risk, clarify responsibilities, and integrate with any project management plans.
It’s best to keep descriptions or recommendations clear in tone, short and straightforward.
Encouragingly, the benefits are not just for businesses but employees too. Having a contractor risk management plan can:
- Help you to meet your contractual obligation
- Ensure universal quality standards
- Reduce the chance of injury in the workplace
- Protect the company’s resources by allowing you to prioritise risks and plan to deal with each possibility
- Keep your reputation intact, leading to loyal customers and brand loyalty
These plans can be thought of as contract management tools that are written into contracts and regularly monitored.
Need a hand to get started with your contractor risk assessment? See our free contractor risk assessment checklist, to help you assess and improve risk controls for new contractors and suppliers.
SHOULD YOU COLLABORATE WITH CONTRACTORS ON RISK MANAGEMENT?
It is important that project managers and leaders look to collaborate with contractors on this process, as they can help you better understand any risks that are specific to your industry or local area.
It also allows for better opportunities for buy-in from contractors, which saves a lot of hassle.
Collaboration also offers an opportunity to discuss what a contractor is, how to work with them, and to ensure everyone understands the specific potential risks.
Recommended reading: Hold contractors to account while keeping the relationship intact.
THINGS TO AVOID IN CONTRACTOR RISK MANAGEMENT
We know how important a contractor risk management plan is. What about things to avoid and best practices when it comes to contractor risk management?
- Don’t ‘set and forget’ – rather than creating a plan, filing it away and thinking it is done, these plans should be regularly reviewed, and adapted as necessary
- Be careful of waning commitment from senior management – the contractor risk management plan must be adopted as part of a ‘safety first’ strategy
- Not learning from past lessons – use all your data to ensure you can see the full picture and make decisions based on facts
- Not including stakeholders and contractors themselves in the plan
- Not setting clear expectations for each team role – in most cases, you will need to build a role hierarchy
HOW WILL A CONTRACTOR RISK MANAGEMENT PLAN BENEFIT YOUR ORGANISATION?
Having a contractor risk management plan in place is not only important for the well-being of your organisation, but it will also help you to meet your contractual obligations and help you win more clients by demonstrating contractor compliance.
Contractors are an integral part of any business and if they do not have the same quality standards that you hold yourself to, then this could lead to liabilities you can’t afford.
It is important to have a contractor risk management plan for the following reasons:
- If the plan is well planned out and comprehensive, it can help you to meet all your contractual obligations and ensure compliance
- The plan can help to ensure universal quality standards – this means that the same standards are expected and enforced across all departments, making reporting, management, and implementation much simpler
- By planning out a risk management plan, you can reduce the chance of injury in the workplace, as you are better able to identify risks and mitigate against it
- A good plan can help to protect the company’s resources by allowing you to prioritise risks and plan to deal with each possibility
- You can also use the plan to show your brand in a good light, leading to loyal customers and brand loyalty
HOW OVS AND RAPID CONTRACTOR MANAGEMENT HELPS MITIGATE RISKS & STAY COMPLIANT
Rapid Contractor, supplied by OVS Solutions (Pty) Ltd, Management Software assists with:
1. Standardised contractor pre-qualification processes
Knowing your third-party suppliers and contractors is no longer nice to have. It’s a prerequisite for managing supply chain risks. Prequalification is a term used in procurement and supply chain management. It is a process to pre-screen competing contractors and suppliers against a predetermined set of criteria.
This is why contractor management software such as Rapid Contractor Management, supplied by OVS Solutions (Pty) Ltd, is a great option because it allows you to standardise and automate your contractor pre-qualification processes which help you to:
- Reduce the administrative burden associated with paper-based contractor management systems
- Shorten the procurement process and improve procurement efficiencies
- Minimise the risks of non-compliant contractors conducting work at your sites
2. Centralised document storage
Your contractors need to have sufficient qualifications and experience to complete the job competently and safely. Storing your compliance documentation such as legal contracts, insurances, licences, and permits in a centralised database will allow you to quickly identify any gaps in compliance, identify and mitigate any risks.
By using an online system like Rapid Contractor Management, supplied by OVS Solutions (Pty) Ltd, the software does the heavy lifting for you. It allows you to issue pre-qualification forms, determine legal compliance, manage documents, and suspend vendors for non-compliance.
Your administrators can easily review and approve or reject non-compliant documents, track expiry dates, and automatically send reminders to contractors to update expiring documentation.
3. Maintain visibility of contractor compliance
It’s great to have a contractor compliance policy but there is not much point unless you have real-time visibility of the compliance status of your contractor workforce.
With access to compliance documentation, live reporting, and automated notifications for non-compliance a system like Rapid Contractor Management, supplied by OVS Solutions (Pty) Ltd, will allow you to have everything at your fingertips 24/7 from any device, anywhere.
Rapid Contractor Management software, supplied by OVS Solutions (Pty) Ltd, seamlessly integrates with Rapid’s workforce management solutions, allowing you to manage the entire lifecycle of your contractors. Ensure your contractors are fully inducted, and on the job faster with Rapid Induct, issue work permits from Rapid Permit To Work and only allow compliant contractors access to your sites with Rapid Access.
It is important to have a contractor risk management plan in place to help manage any risks that may arise from engaging contractors.
Have you made the necessary arrangements for managing contractors? If not, we recommend getting started right away to avoid incurring unnecessary losses or repercussions down the line.
With the multiple challenges any business faces today, cost effective tools that allow proactive work methods are essential. Using software as a service tool can make what was an enormous administrative burden far easier, allowing your staff to concentrate their skill and energy in other areas of your business.
Companies like OVS Solutions (Pty) Ltd, the Africa Licensee of the award-winning Rapid Global Software, have been delivering Health & Safety software solutions for over 20 years. Their only business is the continued development and improvement of their software, to make sure that the solutions keep pace with the ever-changing landscape. All their solutions come with mobile apps.
OVS Solutions, the Africa Licensee of Rapid Global, also have a great support team who are available to assist with live or online demonstrations, user guides, and relevant information you may require. They can help you with the expected ROI calculations and can share their tips on how to best maximize user adoption and can help you deliver on your plan!
CONTRACTOR ASSESSMENT CHECKLIST
This checklist will help you to assess and improve risk controls for new contractors and suppliers with actionable steps to mitigate the risks and ensure new contractors adopt your safety culture.
This is not an exhaustive list of all possible controls, and you may need to customise the list to include information specific to your organisation. Where the organisation answers the question with a ‘no’, further investigation of the risk and possible control measures should be determined and implemented.