The State of Contractor Safety

Host employers have experienced significant success within their employee safety programs by engaging their workforce and adopting a management systems approach to safety/health improvement.

• By Pat Cunningham
• Jan 01, 2019

With each new year, companies across all industries regularly set new goals for improvement and growth. These goals often include increased sales, site expansion, and offering new or improved products and services. However, plans for mitigating associated safety risks of new ventures or processes are an often overlooked aspect in key performance indicators.

These annual goals often include the utilization of contract labor and may add to the complexity of achieving safety goals. Hiring contractors brings specialized skill sets that may not exist in house and provides a flexible staffing model, but doing so also may present new risks. As host employers rely on contractors to fill labors voids, the issue of assessing contractor health and safety performance, as well as potential risks they bring to a work site, is a growing interest among host employers.

The aim of this article is to look at the history, present state, and future potential state of contractor management within the United States.

Looking Back
In the 1980s and prior, the approach of many host employers throughout the United States was to operate with contractors at "an arm's length away." This meant that if contractors were not impacting the safety of host employees, contractors were left to police their own safety. The first noticeable change to this thinking came with OSHA's 1999 "Multi-Employer Policy,"¹ which outlined that, at multi-employer work sites, more than one employer could be citable for regulatory violations. The OSHA policy was a wake-up call to host employers that the practice of "an arm's length away" was no longer viable.

Born from the need to screen contractors, many host employers worked to establish written programs and protocols to protect their corporate interests and provide safe work environments for their employees and the contractors they hired. For Procurement, Operations, Safety, Legal, Risk Management, IT, and other departments, this meant the need to establish insurance bonding requirements, evaluating annual injury/illness logs (comparing rates across industry averages), looking at Experience Modification Rates (the cost of workers' compensation claims), regulatory citation history, and evaluating contactors’ written safety programs. Many host employers were soon overwhelmed by the administrative burden of managing these annually renewing documents.

In response to host employer needs, the contractor qualification industry soon emerged. What this niche industry provided was immediate administrative relief to support host employers and contractors. Relief came by way of assistance in collecting and verifying annual assessments, providing web-based dashboards to compare contractors, and a robust repository of collected protocol documentation. As an added benefit, the act of vetting contractors created a competitive environment where contractors knew their investment in safety and safety performance would be measured against similar industry competitors and results would be viewable to host employers who select contractors for future work. This meant contractors could be rewarded with additional work as a result of meeting the expectations of host employers.

Present State
In 2015, The Campbell Institute (the National Safety Council's environmental health and safety center of excellence) published a white paper titled "Best Practices in Contractor Management."² The research project aggregated best practices and common challenges in the contractor management programs from institute members. One of the most significant outcomes of the research was the identification and description of the five stages of the contractor lifecycle (presented below):

1. Prequalification: This is the first step of the contractor lifecycle. In the simplest of terms, the host employer predetermines thresholds for lagging indicators, compliance protocols, and metrics that contractors must pass in order to work for the host employer. This is often the most time-intensive stage of the contractor lifecycle because it requires investments in time and resources to collect, validate, and score requisite information.

Best practices:

• Evaluation of traditional lagging indicators—TRR, DART, LWD, EMR—against industry averages. Non-standard: OSHA site establishment citation search, trending of metrics, justification to hire safer performing contractors and utilizing the third-party contractor management service provider.

Common challenges:

• Re-qualification—keeping the contractor information current and accessible within a single repository.

2. Pre-Job Task and Risk Assessment: The second step in the contractor lifecycle is standardizing a method to evaluate the risk of the work to be performed in order to place contractors in an appropriate risk category.

Best practices:

• Stratifying risk based on work type; this may include contractor self-assessment questionnaires, then assigning risk levels based on the work they perform for the host employer.

Common challenges:

• Host employers may not be aware of the span of work contractors perform, allowing prime or general contractors to vet their sub-contractors, which may present conflicts of interest and/or questions around completion.

3. Contractor Orientation & Training: The third step of the contractor lifecycle takes place prior to contractors starting work. In this step, contractors receive site orientation or induction training.

Best practices:

• Standardized video presentations, with competency-based quizzes requiring 80 percent accuracy. Other standards include the requirement of an OSHA 30-hour pre-arrival orientation course for supervisors and an OSHA 10-hour course for workers.

Common challenges:

• Significant amount of contractor face time to complete site orientation and appropriate technology to collect and maintain records.

4. Monitoring of Job: The fourth step in the lifecycle involves the host employer going to the job site to conduct field oversight of the contractor’s job safety performance. This step may also include contractors conducting self-assessments of their job safety performance.

Best practices:

• Host employer—daily sight checks, safety talks, weekly walk-throughs, quota systems, contractor self-assessments with a quota requirement, use of mobile apps, contractor incident reporting requirements, and tracking corrective actions.

Common challenges:

• Tracking incident reports or job-site observation deficiencies. Host employers may not have a standardized contractor safety infraction disciplinary policy.

5. Post-Job Evaluation: The final step in the contractor lifecycle is the establishment of a formal contractor post-job evaluation process.

Best practices:

• Very basic collection of information on whether the work was completed safely and within the expectations of the host employer.

Common challenges:

• Campbell Institute members indicated this was the most difficult aspect to manage and communicate within the contractor lifecycle. Most host employers didn't dedicate time for lessons learned before they moved to another project. Many lacked a common standard and repository (access) between departments and lacked resources for data analysis.

For any company looking to create or improve its efforts in contractor management, the Campbell Institute white paper is an excellent resource to understanding best practices and common challenges from some of the best companies in the world. The five steps of the contractor lifecycle can be used by all companies as a model to conduct a gap analysis in assessing their current efforts in contractor management and in creating a continuous process improvement initiative.

A second research paper from the National Safety Council, published in 2017, "Making the Case for Contractor Management: Examining the Safety Benefits of Third-Party Management,"³ is a follow-up study about the Campbell Institute member belief that utilizing a third-party provider results in better safety performance for host employer contractors.

A subset of the contractor database from BROWZ, LLC (third-party service provider) was made available to the National Safety Council to conduct an independent research study. The research examined the impact of third-party contractor management, demonstrating that contractors who were part of a managed program outperformed national industry averages, including:

• Total Recordable Rate (TRR): 34 percent better than national average
• Days Away, Restricted, Transferred Rate (DART): 46 percent better than national average
• Lost Workday Rate (LWD): 65 percent better than national average
• The study also concluded that contractors who remain in the program outpace industry safety improvement by 16 percent.

While the research quantified the Campbell Institute member belief that utilizing a third-party service provider makes a positive impact on contractor safety performance, the significance of the research is that when the stakeholders of contractor management work together (host employers, contractors, and third-party service providers), better safety outcomes can be expected.

Looking Forward: Contractor Management Beyond Compliance
As has been demonstrated, organizations that invest in contractor qualification will see measurable safety results. This is true for both host employers and members of their supply chain. Beyond these investments in compliance, the future of contractor management will include initiatives to facilitate meaningful conversation and mentoring. Host employers that have greater resources can extend their thought leadership and help shape the safety culture for everyone working on site. Sharing information learned from their own in-house health and safety programs can significantly improve the daily operations of smaller third parties.

Upon reflection, most safety practitioners realize that many of the root causes of workplace injuries and illnesses are not tied to regulatory compliance. The root cause of many workplace injuries and illnesses is the result of failures within the systems of safety today.

Host employers have experienced significant success within their employee safety programs by engaging their workforce and adopting a management systems approach to safety/health improvement. The next logical step for the future of host employers' contractor safety programs would be to take what they’ve learned about employee management systems and apply it across their contractor safety programs.

An example of a management systems approach for contractor management can be found in OSHA's 2016 guidance program, "Recommended Practices for Safety and Health Programs."⁴ Within the guidance, OSHA outlined seven core elements that suggest employers should integrate their efforts into a management system that engages the entire site workforce in efforts beyond regulatory compliance.

OSHA's seven Core Elements:

1. Management Leadership: Management provides the leadership, vision, and resources needed to implement an effective safety and health program.

2. Worker Participation: To be effective, any safety and health program needs the meaningful participation of workers and their representatives.

3. Hazard Identification and Assessment: A critical element of any effective safety and health program is a proactive, ongoing process to identify and assess such hazards.

4. Hazard Prevention and Control: Effective controls protect workers from workplace hazards and help employers provide workers with safe and healthful working conditions.

5. Education and Training: They are important tools for informing workers and managers about workplace hazards and controls so they can work more safely and be more productive.

6. Program Evaluation and Improvement: Once a safety and health program is established, it should be evaluated at least annually to assess what is working and what is not and whether the program is on track to achieve its goals.

7. Communication and Coordination for Host Employers, Contractors, and Staffing Agencies: At multi-employer work sites, it's important that host employers, contractors, or temporary staffing agencies consider how their work and safety activities can affect the safety of other employers and workers at the site.

With this initiative OSHA is acknowledging that regulatory compliance alone will not get companies to the safest levels possible.

OSHA is not alone in its belief on how to implement better safety results through management systems—in ANSI Z10, OHSAS 18001, and ISO 45001, other bodies are advocating for a management systems approach on "how" to implement better safety practices.

Regardless of whether they adopt the OSHA model or any of the other management systems’ approach to contractor management, host employers and their contractors may be able to realize even greater success in workplace safety if they take a beyond compliance alone approach to safety/health continuous process improvement.

References
1. Occupational Safety and Health Administration, Multi-Employer Citation Policy (CPL 2-0. 124), 1999, https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_id=2024&p_table=DIRECTIVES
2. Best Practices in Contractor Management, Campbell Institute, 2015, https://www.thecampbellinstitute.org/research/
3. Making the Case for Contractor Management, National Safety Council, 2017, https://www.nsc.org/work-safety/services/research/contractor-safety
4. Occupational Safety and Health Administration, Recommended Practices for Safety Health Programs in Construction, 2016, https://www.osha.gov/shpguidelines/

This article originally appeared in the January/February 2019 issue of Occupational Health & Safety.