Outsourcing: Benefit or risk for your organization?
Outsourcing offers a wealth of benefits by enabling businesses to increase operating capacity and tap into supplemental expertise that they would otherwise have to develop internally.
Despite the multiple benefits of outsourcing enjoyed by increasing numbers of companies, there are risks associated with these benefits, notably risks pertaining to work-related health and safety issues.
Were a contract worker or contractor employee to cause a serious accident, would your company be poised to demonstrate, with supporting documents, that all reasonable action had been taken to prevent the occurrence of such an accident? What would the impact be on your company’s reputation?
Contractors Are Your Responsability
Under several regulations and legislation around the world, if you hire an external contractor to carry out work for your company, you have the same legal responsibilities towards your contractor’s employees as you do towards your own company’s employees. Risk-related liability is incumbent upon both contractors and client corporations.
Upstream of any decision to outsource and welcome external workers into your operating environment, you must ask yourself whether your company is ready to do so and whether your company has the necessary capacity to manage all contractor-related risks to which you might be exposed.
5 Elements to Consider to Limit the Risks of Subcontracting and Get Its Benefits:
Prior to initiating your search for contractors capable of satisfying your needs, you must ask yourself whether your company could take advantages of the benefits.
- Are you poised to select your external contractors based on their performance in terms of health, safety and the environment (HSE)?
- Do you check and ensure that your contractors have solid health, safety and environment programs? Have your contractors defined and communicated measures to their employees to enable the latter to manage all work-related health, safety and environmental issues effectively.
- Are you poised to identify and convey to your contractors the hazards and legal obligations associated with the work to be outsourced, including the controls that you would like to see them implement? These controls extend to training, certification, operating practices and individual protective equipment.
- Do you take action to ensure that your external contractors effectively implement identified controls, even if it is the contractors themselves who identify these controls by reason of highly specialized expertise?
- Do you possess the know-how and the right tools to convey any deficiencies observed and remedial measures to be taken to reestablish compliance? Are you ready to sever an external contractor’s contract if the latter’s performance fails to improve.
If you answered ‘no’ to one or other of the above statements, you do not believe that your company is poised to comply with each of the aforementioned conditions. You would therefore be unable to reap the multiple outsourcing benefits without exposing yourself to a certain degree of risk which could manifest in the form of an accident involving one of your external contractor’s workers.
Risk Management to Take Full Advantage of Outsourcing Benefits
If, on the other hand, you answered ‘yes’ to each of the preceding statements, you are signalling that all requisite measures are already in place for your own employees. You have conducted background checks on potential candidates prior to hiring and ensured that they understand and commit to work in compliance with the dictates of your health, safety and environment program. You have identified work-related hazards and detailed controls such as standardized operating procedures (SOPs), training and individual protective equipment required for the safe execution of all work.
Lastly, you do not simply presume that all means and measures have been instituted. You inspect the work site, conduct process checks to ensure that all aspects of your HSE program have been properly implemented. You initiate and carefully document requisite remedial action whenever deficiencies are observed.
To help you carry out the tasks pertaining to risk management, there exist computerized tools, cloud-based solutions in particular, intended to facilitate and standardize your administrative workload. These solutions are provided by specialized contractor management companies with the capacity to guide and assist you at each stage of the implementation process. You may wish to seek out further details in this regard, if only because a solution of the like could mean substantial benefits for your company.
By complying with the above conditions and exercising a watchful eye over work-related health, safety and environmental issues, you will position your company to take full advantage of the multiple outsourcing benefits without exposing yourself to unmanaged risks.
With complete peace of mind, you will then be ready to outsource work to external contractors, focus efforts on your company’s primary mission and ensure that your company’s reputation remains intact.