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You’re Only As Safe As Your Contractors


Phil La Duke

 

You can have a robust, innovative hazard management system that is the envy of all other safety professionals. You can have a high-functioning incident investigation process that drills down to root causes and contributors and cascades awareness of risk across the organization. You can even achieve unprecedented gains in incident reduction and risk management. But all this is meaningless if you’re contractors don’t effectively manage worker safety.  A high-profile injury or fatality at your contractor can wipe out decades of hard work, reputation, and community good will in an instant.

For decades, large organizations (manufacturers chiefly, but not exclusively) have been outsourcing dangerous and labor-intensive jobs to contractors.  From a business perspective it’s a pretty good deal, large companies are able to lean-out their operations and focus on their core businesses while eager suppliers gobble up contracts like greedy dogs at the dinner table.  Even some unions are able to pressure the sourcing companies to refrain from union-avoidance activities as consolation for the move from high-wage/benefit jobs to lower paying. Of course the workers are paid less and receive fewer benefits, and many of their jobs end up in the third world with little safety oversight.  (But this piece isn’t about the immorality of outsourcing.) One of the most attractive things about outsourcing is the seeming ability to outsource risk and liability for injuries.

But other cases the jobs only move on paper. Floors once mopped by employees are now mopped by contractors. Instrument panels once assembled by traditional employees are now assembled by contractors, sometimes only a couple of feet from where employees once did the work. The move to contractors that work under the sourcing company’s roof has created an environment where some employees don’t count. When a contractor dies in many workplaces he dies largely unmourned.  The sourcing company is so unconcerned about the injury that most can’t even screw up enough moral indignation to point a finger. For its part, the contractor takes a Doritosesque “crunch all you want; we’ll make more “ approach.  All parties agree that the loss is a crying shame, but after all,  life goes on.  Safety isn’t a priority for most contractors; at least not really (a good share of them THINK it is, but it really isn’t). Sure  they put up the “___ days without an injury” poster and may even have a green cross tacked up in the dingy little cube of the beleaguered, over-worked, and part-time safety professional.

Where the sourcing company sees it incumbent on the contractor to address safety training and enforcement and the contractor feels that—because the sourcing company controls the physical environment in which the workers do their jobs—there is a reasonable expectation that the sourcing company will “own” safety.

Contractors Aren’t the Problem

Contractors aren’t necessarily to blame. Often contractors are unsophisticated in the their management of safety. Entrepreneurships tend to focus on high-profit, aggressive growth, and customer service. Focusing on one business element means that you aren’t focused on others.  Workers in entrepreneurial contractors tend to be more transitory than in more mature organizations that tend to lead to a view of workers as replaceable.  These organizations rarely invest in training or safety—it doesn’t make sense to invest in workers that won’t be around in a year. But even those contractors who want to invest workers will find a rough row to hoe. Activities like safety and training often fall by the wayside. The job of managing safety (and training for that matter) remotely is challenging even for the most sophisticated companies. And the customer’s relentless demands for cost reductions compound the problem.

The Law Hasn’t Helped

Government regulation hasn’t helped a whole lot. If a contractor has not received the mandatory safety training the government doesn’t go after the sourcing company, it fines the contractor, not the sourcing company. Workers’ Compensation (and its overseas equivalents) costs are the problem of the employee of record (that is, the contractor) and so little attention is focused on the sourcing company. Contractors continue to be squeezed and when costs are cut they tend to gut training and safety budgets.

A Shift Is Emerging

 Government agencyies are rapidly working to close this loophole.  Auditors are paying far greater attention to how vendor safety  is ensured. And, mindful of this shift, many sourcing departments are concerned about the safety record and management of prospective contractors. Many large companies use the safety records and safety management approach as criteria for awarding contracts. This practice is particularly common in the construction industry, but is steadily growing in in other industries.  Because the responsibility for safety enforcement and training can be murky in these situations, it can be easy for companies to lose sight of responsibility and accountability.

A Shared Burdon For Safety

In the U.S. outsourcing jobs to vendors who work under your own roof is wide-spread and growing. This creates two environment one where a facility houses many employees of another company, and another where the population of the company is spread over numerous location (typically customer sites).

When an organization outsources worker to contractors both the sourcing company and the contractor have a shared responsibility for safety. This legal requirement[1] is an exception to the laws prohibiting “co-employment”. This important because there are yowling HR people in many organizations that erroneously contend that it is illegal for the sourcing company to provide training (even safety training). There is a similar exemption for disciplinary actions as a result of safety violations.

Where There is Confusion, There is Risk

As long as there is confucion around exactly who is responsible for safety training and enforcement companies (both sourcing companies and contractors) face significant risk.

What To Do About It

Clearly there is an on-going problem, but what can and should be done about it? The first and best solution for addressing this issue is collaboration. Safety professionals from both the sourcing and vendor organizations need to collaborate to find optimal ways to manage safety. In terms of how safety is managed there should be no distinction made between employees and contractors. This is pretty easy to do when we are talking about enforcement or safety training but these are only a very small part of what needs to be done to ensure workplace safety.  Safety professionals must also cooperate to make certain that everyone is trained to competency level before they begin the job.  Here’s where it can get tricky. Training in the worker’s core competency is generally seen as the legal responsibility of the employee of record (that is, the contractor), while the host company must provide esoteric training that is specific to the workplace.

This issue is complicated, and is not likely to get any simpler anytime soon.  But when worker’s lives are at stake no one can shirk their duties simply because they are hard or complicated.

 


[1] In the United States, although similar requirements exist in other industrial nations as well.

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3 Responses

  1. Bill Coyne says:

    Great post Phil thank you for your time & hard work in getting the safety message out to the masses!

  2. marcmcclure1 says:

    Phil, Right on the money! I went through this before. we were told everything would be great, but the contractors didn’t have a clue. It ended up costing us more money in the end to fix all theat they had messed up!

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