A New Market Created – Outsourcing Contractor Vetting Part 1

Even if your company has a top-notch safety program, it is possible that you have been faced with a contract safety pre-qualification audits such as Avetta, ISNetworld®, Browz, Veriforce or Complyworks. Year after year, more and more companies are making the shift to outsourced contractor and supplier vetting. From a cost, process and workflow perspective, it makes sense.

According to OSHA, pretty much every employer has a duty to provide a workplace free of known hazards; BUT, not every employer follows this rule.

You would be surprised how many employers do not even know that they are supposed to provide safety training to their employees.

I remember the shock that I felt when I first realized this fact. I guess that I just assumed that, if someone had a real company, that they were in compliance with all applicable laws. NOPE. Not even close.

I have seen countless companies that have absolutely NO SAFETY PROGRAM WHATSOEVER! I’m not talking about little mom and pop companies either. I am talking about companies with fifty employees, who work for Fortune 100 and Fortune 500 companies.

Well, I guess that at some point, the Fortune 100 and Fortune 500 companies realized this fact too. Uh oh! What now?

So, the problem became contractor and supplier vetting and selection.

Imagine for a second, the resources necessary for a company the size of Chevron to ensure that every one of their contractors, suppliers, service companies and sub-contractors have an up-to-date safety program, current and applicable safety training, an insurance policy that is in-force, and a safe work history – all before doing business.

Imagine the cost of having an entire building full of PepsiCo employees responsible for reading safety programs, verifying insurance documents and OSHA Logs, and double-checking training records; the payroll cost alone would be enough to make even the wealthiest of companies think twice about how to eliminate this cost center. So, out of this demand, companies like Avetta, ISNetworld, Browz, PEC Safety and Veriforce were birthed.

Problem Solved!

The big companies had a solution to the vetting conundrum, and this cost center was dramatically reduced –  everyone was happy, right? Not so fast!

What about the contractors?

Contractors are required to subscribe to the audit system of their client(s) choosing. Yep, you heard me right. A single contractor may have to subscribe to multiple auditor systems, and they may have to complete multiple safety audits – depending on which companies they contract for, and what system that particular “Hiring Client” requires.

So, while the big companies have found a solution to streamline contractor management and procurement, the contractors are not so fortunate.

I personally consult for contractors who subscribe to over ten different online audit systems. Wait, did he say ten? YES! I said TEN ONLINE safety audit systems for a single contractor? That doesn’t sound very cost effective or streamlined to me.

If contractor companies only had to subscribe to a single audit system, the world would be a much happier place. Lets face it – this is never going to happen.

So what are contractors to do? God forbid they hire a consulting firm to manage their safety pre-qualification and audit systems. For some reason, it is okay for the hiring client to outsource risk management to firms like Avetta and ISNetworld, but when contractors hire companies like ProQual Safety, they are frowned upon by the professional safety community, and oftentimes by the companies they contract to. Contractors will often hear comments like “safety is an inside job”, and “safety culture is diminished when it is outsourced”.

Either the contractor is too small to justify the cost of a full time in-house safety department, or their current in-house safety staff are busy implementing real actionable safety measures, and don’t have time to manage three or four online safety audit portals like Avetta and ISNetworld.

Now, can the contractor companies figure out how to  pass these audits? Sure they can. This stuff is not rocket surgery, but it is very time consuming.

It comes down to opportunity cost.

What is the contractor’s time worth? In the three hours per week they spend managing online safety systems, how much revenue could they have generated? How many new proposals could they send? How many real safety actions could they have executed? How many toolbox talks could they hold with their crew?

If you are an employer – you are required to have a safety program.

If you are a company who has been required to complete an online safety audit such as Avetta, ISNetworld, Browz, Veriforce, Complyworks or a similar system – you may want to consider hiring a consultant to assist with the process.

Efficiency is accomplished by specialization and division of labor. Similar to an assembly line.

For example, I own a consulting company. We have roughly twenty-five employees, and we continue to grow each quarter. When we first started the business, we connected the computers to the internet by ourselves, because it was easy and because we couldn’t afford to hire an IT company. We’ve grown past that, but we still do not have an in-house IT department – we outsource the management of our network to an independent consulting company that specializes in IT and networking. We don’t try to figure out how to be professionals on routers and switches and network configurations. We would probably go broke if we spent our time learning how to do this ourselves.

Hiring an IT consulting group was one of the best decisions we have made.

If a user is unable to log in to their workstation, we call the IT folks.

If the interwebs just stop working in the middle of a workday – we call the IT folks.

We do not have to troubleshoot the problem, we do not have to worry about being offline, and we do not have to bother with remembering to run those annoying and never-ending updates, because our IT consultants do it all for us.

The best part about hiring a professional, is that you don’t have to think about it – the process seems to manage  itself.

The same theory applies with safety audit consulting. Think about a specific area of your business that you currently outsource – imagine if you had a company full of professionals to handle your safety audits the same way.

In Part 2 of this post, I will provide some tips on what to look for in a safety audit consultant. In the meantime, consider hiring a consultant like ProQual Safety to complete and manage your company’s audit system(S)!

 

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