How Contractor Management Can Reduce the Costs of Unsafe Work

Dec 22, 2015

Have you ever wondered why it’s common for contractors to work more unsafe than the rest of your employees? If so, you’ll know their unsafe work contribute towards your indirect operational costs. So what do you do about it? First we need to understand just what is the cost of unsafe work? This article will help you understand the costs of unsafe work and how your organisation may be able to reduce them through the implementation of a contractor management system.

Costs of unsafe work

Unsafe work can be defined as any work activities that can pose a danger to others or those performing the activity, and without stereotyping all contractors, some contractors may lack the supervision, knowledge of hazards and adequate safety related training of larger organisations and could engage in more unsafe work compared to normal employees.

There is no doubt that unsafe work can lead to injuries and incidents in the workplace and with that the most direct cost to any organisation from unsafe work is workers compensation premiums. Other direct costs could include medical expenses, lost wages, damage and replacement of plant and equipment. There are other indirect costs of unsafe work or accidents such the cost of replacing workers, re-training, decline in morale and bad reputation, or negative publicity.

The cost of unsafe work can be reduced through the implementation of an effective contractor management system.

Contractor Management Systems

A contractor management system is nothing more than an extension of your organisation’s health and safety management system, however, it is one of the most effective methods of reducing the costs of unsafe work. It ensures that your H&S requirements are communicated to the contractors during the selection and recruitment process but also confirms that your selection of contractors includes only those contractors that fit your requirements in terms of training, education, skills and experience for the task.

If you’re looking to implement a contractor management system into your business, it’s best to ensure you have a system that not only records contractor data such as licenses, insurances and such, but also manages their safety by looking at these things:

Make sure your contractor management system lets you record and manage unsafe acts. If it doesn't, you'll have trouble getting contractors to comply (with) your safety policy.

Ensure your contractor management system has an incident reporting mechanism so you can improve safety and reduce accidents and costs. Any good system should also allow you to receive feedback from contractors, giving them a voice and input to assist in improving your H&S management system.

However, having a contractor system in place is just part of the solution, you have to ensure all staff are aware of the requirements and that the system is used for every contractor that you select and recruit in to your business, otherwise the cost of unsafe work for your organisation may just increase instead of decreasing.