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Avoid the risks of hiring
subcontractors
The most
frequent risks faced by the hiring company are:
·
Fiscal and labor risks;
·
Accidents on the job site;
·
Delays in project execution and surpassing the project
budget;
·
Risk of receiving a product of low quality/durability;
and
·
Risk of not receiving a warranty from the contractors.
According to the Choma, Augusto A.,(2008) can identify and suggest four steps that can help a project manager with the efficient management of contractors:
Contract planning–
Take the Time to do it Right,
Contractor selection–
Use Your Planned Criteria,
Contract administration–
REALLY be in Control
Corrective actions–
Take Actions Based on Trustworthy Data.
(Choma,& Augusto ,2008)
When
y consider to reduced risk of hiring companies & y need implementing the
following measures as per the Hartley ,(2023)
.
1. Verification of insurance coverage
and liability limits.
2. Clear and comprehensive contracts
with well-defined obligations and indemnification clauses.
3. Thorough due diligence when
selecting subcontractors, including reference checks and qualification
assessments.
4.
Regular quality control checks to ensure workmanship meets established
standards.
5.
Collaboration with subcontractors on safety protocols and monitoring their
compliance with safety regulations.
(Hartley ,2023)
( Ferrell ,2024)
Working with contractors always involves some risk,
but same steps you can take to reduce
Carrying out all processes and operations in-house
is not a reality for many companies.
For many companies, this is no longer the case.
Businesses big and small rely on contractors to assist their in-house teams,
even in dangerous tasks such as construction and electrical work.
Contractors aren't going away. But relying
on outside help can expose you to additional risks. Unlike your employees,
they're not familiar with the hazards in your workplace or the procedures for
dealing with them. And although the fault doesn't always fall on their
shoulders, it is the company hiring the contractor that is responsible for
their safety.
1. Vet Contractors Before Hiring
Start by
making a shortlist of contractors you're thinking of hiring and vet them
thoroughly.
The vetting process should include
- Completing a background check
- Checking in with
previous clients or employers
- Evaluate credentials
Give a
lot of weight to word of mouth from previous companies. Some contractors will
look great on paper but have a poor client satisfaction record. Likewise, a
contractor with little experience might do an excellent job. The only way to
really find out (besides hiring them yourself) is to ask around.
Vetting contractors might seem like too much work when you're
only hiring someone for a short time-frame. After all, why go through all this
trouble when you only need someone to come in for one day?
2. Substance Testing
Once you've decided on
a contractor and vetted them, you should also ask them to undergo a drug and alcohol test.
A
large number of workplace accidents can be attributed to employee or contractor
error, and drug and alcohol use increases the likelihood of these incidents
occurring. With almost one quarter of Americans
admitting to drinking during the workday and 70% of illegal drug users being
employed, it's not worth taking a chance. You won't reduce your risk
of incident to zero by testing contractors, but you
will make sure that they come to work clear-headed.
3. Draft Safety Policies with Contractors in Mind
Safety
policies are usually drafted for permanent and full-time employees. That might
not make it an ideal document for short-term contractors.
When drafting your safety policy, be sure to include a section
dealing with contractors and how to handle them coming onto the worksite.
Consider making a shorter document or fact sheet specifically to be distributed
to contractors, highlighting the important safety processes and procedures they
will need to be mindful of when working for you.
4. Training Sessions and Workshops
Proper
training is one of the best ways to ensure worker safety. Unfortunately,
contractors coming in haven't sat in on the same training sessions as your
full-time employees. While they might have undergone some kind of safety
training in the past, they aren't likely to be familiar with the ins and outs
of the hazards in your particular industry or workplace.
Involving contractors in safety training doesn't always occur to
employers, but it is feasible. If you're working with a contractor over an
extended period of time, you could have them participate in the training
sessions the way any new employee would. Online training makes this much
simpler.
If you're having a number of contractors coming in for
short-term work, you could also put together a safety workshop for them. These
would not be as elaborate as full-scale training sessions, but they could be
streamlined to cover the most essential subjects.
1. Draw Up a Contract
An
airtight agreement drafted between the company the contractors who work for it
will protect everyone involved.
The contract should spell out which party will be responsible in
the event of accidents and injuries. It should also incorporate penalties if
contractors are found to have made errors or failed to meet their
responsibilities and obligations. Negative incentives, such as fines or
discounted payments, can be an effective way of improving contractor
performance and ensuring their safe conduct in your workplace
2. Evaluate Insurance Policies
Insurance
won't prevent accidents or stop anyone from getting hurt. But it will make sure
the financial consequences of those incidents don't get out of hand.
Review
your own company's policies to make sure you have the right amount of
protection you need in case a contractor commits an error, causes harm, or is
injured while working on your behalf. Verify the contractor's insurance as
well, and make sure it's adequate. Make sure the policies have
enough coverage so that even the worst scenarios won't drain your company's
bank account (learn The Truth About Certificates of Insurance).
(Wiggins ,2018)
There are certain
things have to do mitigate or eliminate the risks associated with independent
contractors according to the Barraza A.,(2024) as below.
1.
Take
accountability for learning.- Ignorance is never a legal excuse for
disregarding independent contractor labor laws. It’s critical that you
always proactively understand independent contractor-related IRS guidelines and
state legislation. By taking the time to educate yourself, you’ll not only
protect your business, but also ensure a smoother working.
2.
Establish
a strong vendor partnership.- Partnering with a reliable vendor that
specializes in contingent workforce solutions can help you sidestep potential
pitfalls. Lean on the vendor’s expertise for smoother navigation. A strong
partnership can save time and reduce stress, allowing you to focus on your
central business objectives.
3.
Reflect
on the decision-making process.- Before engaging independent
contractors, it’s important to identify your motives. Are you basing your
decision on federal requirements, or are you just trying to justify your
business needs or interests? In every case, it’s necessary to follow the law,
not just your needs or opinions. Keeping this in mind can save you from future
complications and legal consequences.
(Barraza ,2024)
References
Hartley B.,(2023), Understanding the Risks of Hiring Subcontractors on Your Insurance (Online)
Available at : https://www.linkedin.com/pulse/understanding-risks-hiring-subcontractors-your-bixby-hartley [Accessed on 25th march 2024]
Hartley B.(2023),Understanding the Risks of Hiring Subcontractors on Your Insurance (online)
Available at : https://www.linkedin.com/pulse/understanding-risks-hiring-subcontractors-your-bixby-hartley [Accessed on 9th April 2024]
Ferrell J.(2024),Subcontractor Prequalification: A Vital Step in Construction Industry Success (online)
Available at :https://www.constrafor.com/the-build-up/subcontractor-prequalification-a-vital-step-in-construction-industry-success [Accessed on 9th April 2024]
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