Best Practices for Hiring External Contractors

Written by Emilie Filion, MBA August 14, 2017

Regardless of the sector of activity in which your company operates, there comes a time when you need to hire an external contractor.

The hiring of an external contractor is indeed an extremely interesting option. In so doing, you gain access to specialized temporary manpower poised to carry out work of a specific nature while you continue to focus on managing your day-to-day business operations.

Risks inherent in outsourcing

However, choosing an external contractor can prove challenging. You must exercise painstaking care when conducting contractor searches to avoid consequences, physical and financial, which can escalate all too quickly and impact your company’s reputation. Indeed, should an accident occur at one of your worksites, it is the name of your company that will make newspaper headlines regardless of whether the accident was caused by an external contractor or by one of your own employees. And it is you who will have to justify the unfortunate occurrence.

Although the hiring of external contractors is not devoid of risks, you can attenuate these risks considerably by applying the principles of due diligence. When you hire an external contractor to carry out work for your company, it is important to understand that you have the same legal responsibilities towards your contractor’s employees as you do towards your own company’s employees. Just like when hiring a new employee, it is essential to conduct the full gamut of requisite checks when searching for prospective contractors. These checks are useful and help protect your company in the event of any unforeseen glitches.

The choice of an external contractor extends beyond skills and know how. Even though you endeavour to conduct business with top contractors at all times, you must make allowance for a number of other factors when selecting an external contractor.

Experts recommend drawing up a list of criteria with which external contractors must comply if they wish to carry out work for your company. This exercise helps you gain an in-depth understanding of the external contractor’s company profile and avoid surprises, while ensuring that you enjoy recourse to leading industry contractors in all circumstances.

Key selection criteria include touchstones such as practices relating to occupational health and safety, the environment, insurance coverage and training. However, a number of other factors must be considered when conducting searches for an external contractor.


Best practices for hiring external contractors

How do you ensure that contractors hired to carry out work for you are competent, compliant, safety-oriented and capable of adapting quickly and easily to a new working environment?

To help you make enlightened choices, following are several key considerations based on best practices for choosing external contractors.

1- Are your prospective external contractors recognized in their respective sectors of activity?

Searches conducted using search engines such as Google often fall short of the mark. They may be good for obtaining a list of companies but are generally lacking in substance. As a company seeking to hire external contractors, you must ensure that your future employee for a day is both legal and compliant.

Validate company profiles

It is important to validate external contractor profiles to ensure that the companies do indeed exist and that they are recognized, registered and operate in accordance with the law. Do not hesitate to request copies of permits, as well as legal and professional licences

It is equally vital, in all circumstances, to consider external contractor size, financial soundness and the scope of mandates completed prior to awarding any contracts. You will wish to bear in mind that the company with the best price is not always the company deserving of your interest. Rather, it is important to ascertain which companies are reliable, respect their commitments, work safely, employ competent employees, etc.

Research success stories

To know whether an external contractor is recognized in a given sector of activity, look closely at the company’s portfolio and their most recent achievements. You may even wish to contact former clients to learn more about the contractor’s on-the-job performance, work quality, ability to meet deadlines, etc.

2- Are your prospective external contractors insured and properly trained?

As an employer, your liability extends to all external contractors that carry out work for you whether one-off or on a regular basis. It is up to you to ensure that your external contractors have adequate insurance coverage and that each is properly trained, apprised of health and safety risks, and knowledgeable of applicable protective measures relating to the work to be carried out. All of this is necessary to demonstrate due diligence and safeguard your company in the event of a serious accident.

Check contractor insurance certificates for compliance

All external contractors reporting for work on your company’s premises must be insured. The minimum coverage generally required is $2 million but this amount varies depending on the sector of activity and the nature of the work to be carried out.

In the event of an incident (accident in the workplace, death, fire, damage to the environment, etc.) involving an insured external contractor, it is the latter’s coverage that will be solicited. Any resulting reconstruction and decontamination costs will therefore be covered by the external contractor’s insurer, with no direct impact on your company. If an external contractor has no insurance or, worse yet, if coverage has lapsed, are you aware of the consequences for you and your company? Do not run the risk! Ensure that all of your external contractors have adequate coverage.

Request proof of training

Some types of work require specific training and certification to ensure that the external contractor possesses the necessary technical and practical skills to carry out all work safely and efficiently.

Training file management is nothing short of a mammoth task. It is, however, essential if you are to be able to demonstrate due diligence and ensure that your external contractors conduct themselves in a manner that does not risk compromising the safety of your employees.

3- Do your prospective external contractors have prevention programs?

Be certain to ascertain how prospective external contractors fare from the standpoint of health and safety in the workplace. Although some contractors may enjoy exemplary credit ratings and achieve perfect marks for the quality of work carried out, they may fall short in the area of workplace safety. These shortfalls could result in injury to themselves, workplace colleagues, even your own employees. Prevention programs provide a demonstration of external contractor seriousness and the importance that these contractors accord to measures pertaining to health, safety and the environment.

Request a performance rating

Have your prospective external contractors been fined in the past for health and safety violations? How many lost time accidents have they caused? How many notices of violation have they received from the ministry or department responsible for the environment? From government authorities? From representatives of public institutions?

The foregoing examples provide an overview of the questions to be posed of prospective external contractors.

Check external contractor policies

Risk analysis is a key element of a risk management process highly recommended for all companies. Risk analysis makes it possible to set out in writing all work and all preventive measures to be taken to remedy identified risks. This report substantiates contractor seriousness when faced with challenges relating to the health and safety of employees.

For each task to be carried out, check to see that contractors are aware of all related risks and that a plan detailing preventive measures has been drawn up for each.


Seemingly intense, efforts devoted to identifying suitable contractors, determining those presenting greater levels of risk and locating those likely to provide you with quality services, while complying with your requirements in matters health, safety and the environment, are nothing short of crucial.

These pre-checks are important and can save you considerable time and money. Bear in mind that in the event of an accident caused by a contractor, it is rarely that name of the contractor that makes headline news bulletins. Rather it is yours since the accident occurred on your company’s premises. Contractors exert a direct impact on your company’s performance, profitability and reputation. Be certain to choose the right ones!

The choice, management, monitoring and due diligence exercised with respect to external contractors are of vital, strategic importance for the health and sustainability of your company. Do you have the tools in hand to manage your external contractors properly?

Emilie Filion, MBA
Emilie Filion, MBA

Emilie Filion (MBA) holds the position of Implementation & Major Accounts Manager at Cognibox. In this capacity, she oversees the activities related to the implementation of Cognibox and leads commercial activities in Ontario. Ms. Filion has great expertise in contractor management best practises which is of great use in helping multinational companies achieve higher health and safety standards and reduce costs.

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