This year, workplace safety will be more top of mind than ever for construction contractors and the companies that hire them. Here’s why: In 2017, the U.S. economy experienced an uptick—albeit a modest one—in capital-intensive industries growth, according to Bloomberg. For example, manufacturing may realize its best performance since 2014. Similarly, mining industries are on their way to recording their strongest annual employment growth since 2011. And 40 percent of the work being outsourced is construction-related, according to a recent survey conducted by ISN of 161 companies in capital-intensive industries that collectively manage more than 30,000 contractor companies.

As capital-intensive industries continue to grow, the bottom line in construction is a big component of work being performed. Indeed, this recent survey found that eight times more organizations expect to see an increase in outsourcing to third-party contractors versus those that expect a decrease.

However, when it comes to enlisting contractors to support their growing operations, respondents also see challenges on the horizon; chief among them is their ability to ensure their operations remain safe while also finding qualified contractors for the job. That’s why so many organizations that turn to contractors are placing an emphasis on having a well-thought-out contractor management plan to maintain high safety standards and compliance with industry guidelines and best practices.

Failing to plan is planning to fail

Almost 90 percent of the organizations surveyed that have a mature contractor management process have a documented strategic plan for their contractor management goals, as compared to 63 percent of organizations with less mature processes. And the good news is that the enhanced measures to improve workplace safety are prompting contractors to rise to the occasion.

“Almost every contractor today believes that workplace safety is their number one priority, “says Phil Nielsen of IHI E&C International Corporation. “Having a robust contractor management system is essential for proper communication and ensuring compliance with job requirements so contractors are able to focus more of their attention on keeping everyone safe and getting the job done.”

Safety is no accident for leading organizations

There’s no overstating the importance of staying on top of the myriad of challenges facing capital-intensive industries. For the organizations hiring contractors, having a strong safety culture undergirded by a well-conceived contractor management strategy is more than just a nice thing to have—it’s a business necessity.

But challenges remain. The top three challenges identified by surveyed organizations are:

• the shortage of skilled and competent workers;
• the lack of internal resources for managing contractors and subcontractors; and
• disconnected internal business processes and priorities.

Meanwhile, one of the tops risks identified by survey respondents is the inability to effectively ensure the competency and regulatory compliance of second- and third-tier subcontractors hired by general contractors. This was followed by inadequate process safety management and the prevalence of temporary (i.e., short-service) workforce are other top risks cited in this study.

For companies looking to stand out for driving continual improvement in their contractor management processes, improving communication and clearly defining expectations with contractor companies is the top area identified by hiring organizations.

"It's important to remember that data drives behavior," says Steve Greene of NCCER. “According to the Construction Industry Institute and the Construction Users Roundtable, operators who source construction services from contractors with effective craft employee training programs experience better results than those that do not require contractor craft employee training and skill certification. Research shows that trained craft professionals are safer and more productive and experience less rework, absenteeism and turnover. Having the ability to communicate expectations on training programs, on-the-job performance and other requirements is a critical component of an effective contractor management system."

success in 2018

Some companies may think that maintaining high safety standards is a given in today’s day and age. But when it comes to demonstrating that commitment to safety, there’s no substitute for transparency, clear communication and a well-designed strategy for staying compliant with all the necessary regulations.