Working with Contractors

Aug 19, 2016

Contractors are becoming vital components to business operations for companies of all sizes in varying industries. Enterprises are turning to industry-specific firms to take care of certain tasks within a project, allowing for in-house employees to focus on other duties.

By outsourcing jobs to contractors, companies can invest less in infrastructure and manpower while still expanding into new markets domestically and internationally. The freeing up of employees and resources can benefit growing businesses, but can also bring a set of challenges for managers.

Working with contractors is different than hiring new employees. The contractors are managed by their own personnel but must still be monitored by the enterprise. Thus, contractor management solutions help company decision-makers perform background checks on firms, ensure compliance standards are being met and keep track of operations between projects in the future.

Without a contractor management system in place, companies working with multiple contractors may lose sight of certain details or activities that could result in significant fines or penalties due to noncompliance. In addition, a company's reputation within the industry can suffer greatly if contractors fail to perform at a certain level of excellence or are found to be in violation of various governance requirements.

Contractor management

When looking for a contractor for a new project or business venture, companies should start by posting the opening and collecting at least three bids from interested firms. The more contractors interviewed early on, the more likely the company will find an affordable partner with an outstanding reputation.

The bids should be compared before making a decision, taking into account the price, experience level, reputation, customer reviews and interview impression, among other things. There are steps every company should take to screen through the bids and find the best contractor for the job, and a contractor management system can help procurement stay on track while going through the selection process.

Before interviewing a contractor, the company should check to see if the firm has up-to-date licenses that are necessary to perform the job. While many unlicensed contractors will bid for the work and likely offer discounted prices, it is a wiser choice to work with licensed firms that will not be vulnerable to penalties or fines.

In addition, it is important that contractors have the necessary insurance coverage to protect against any physical or financial risk associated with the job. The minimum insurance coverage of a contractor includes liability and workers' compensation insurance. Other protections, however, will add to the value and security of the contractor, making it a more trustworthy selection.Thumbnail Graphic_contrel.png

Solutions such as those offered by BROWZ can help companies prequalify contractors based on their compliance and safety efforts. By properly managing their contractor’s fulfilment of safety policies and other regulations, businesses may be able to significantly mitigate risk. 

Maintaining contractor relationships throughout the prequalification and hiring process is especially important. Is your contractor safety program strengthening your contractor relationships? Find out here by downloading the full eBook.