Most companies have a pretty good understanding of how they can benefit from hiring contractors. From increased flexibility and cost savings to specialized and technical work, they can be a great addition to your team.

But many employers stop short of considering the risks that come with hiring contractors. Unqualified workers, those with a poor work history, or contractors with lapsed insurance are all risky for your business.

You always take a chance when you hire a contractor, but by following established best practices for contractor management you'll be able to maximize productivity and rest assured that the risks are kept low.

Why Follow Best Practices?

The very definition of "best practices" is that they are tried and true – they’ve worked well for others in the past and have become an unofficial standard.

Here’s the truth, though: strictly speaking, best practices aren’t always, well, the best. Every business is unique, and something that works for one may not work quite as well for another. You might have to modify, tweak, or build on existing best practices to suit your situation.

But that doesn’t mean you should ignore them.

Instead, consider best practices as a benchmark – something to work your way up to, and then improve upon based on your context and your business requirements. Doing this requires a solid understanding of what the best practices for contractor management are and consideration of how they can fit into your business model (or how your business model may need to change to accommodate them).

So, how do you go about doing that?

Getting Started with Best Practice Implementation

Here, we’ll take a look at some of the key best practices to follow when it comes to managing contractors – and offer some tips to help you get started.

1. Prequalify Your Contractors

If you aren’t prequalifying your contractors (either on your own of through a third party) you’re opening yourself up to enormous risk.

The prequalification process looks at a contractor’s safety statistics (including OSHA recordable) along with their technical abilities, bonding limits, regulatory compliance, past performance, and reputation. It helps ensure that the contractor you work with has a strong safety record and meets the necessary insurance and training requirements. More than that, it also gives you peace of mind that they’re a good fit for the job.

Start by: Setting up a rating or scale system. Determine what criteria a contractor must meet to receive a "passing grade" or be considered for work with your company. Make sure every contractor is assessed against the criteria and meets the required score before hiring and moving forward with the work.

2. Conduct a Risk Assessment and Hazard Analysis

Assessing the risks and hazards of a job allows you to determine exactly what a contractor must have to qualify for it. Your criteria might include any of the following, or more:

  • Severity
  • Frequency
  • Incident likelihood
  • Cost
  • Security

Start by: Creating a risk matrix to outline the likelihood and severity of each hazard. From there, you can determine whether the assessed level of risk is high enough to warrant additional requirements from contractors.

3. Provide Contractor Orientation and Training

While some contractors may suggest that they already have the training required to carry out the work, you want to be certain. For this reason, it’s best to put them through your own orientation and training program.

Your company is ultimately responsible for the contractor's health and safety while they are on the job, so ensuring they have the exact knowledge and skills required to do the work safely and effectively is important.

Start by: Defining contractor roles and developing both general safety training and a site-specific safety orientation for them. Note that training and orientations may be on-site and in-person, online, or a combination of both.

4. Use a Contractor Management System

Managing contractors can be complex and time consuming, especially if you’re still relying on spreadsheets. Investing in a contractor management system is one of the best things you can do to support an effective management process.

Look for one that:

  • Has no contractor fees
  • Can be scaled to meet growing needs
  • Offers complete and efficient control of data and documents
  • Can be easily accessed online at any time
  • Offers complete coverage of the full contractor life cycle (from prequalification to post-contract performance review)

Start by: Assessing your current contractor management process to identify what works and what doesn’t. Put together a list of your management system needs (include both necessities and nice-to-haves), then narrow your contractor management system options down to a few good choices that meet your criteria.

Building Your Best Practices

Once you’ve implemented the best practices, it’s time to make them your own. That is, make them work exceptionally well for your business.

In those first six months, be sure to regularly assess how things are going. Are the best practices helping your business? If not, why? Best practices are, as we discussed above, general guidelines that have been shown to be effective in most cases. They're not rigid rules that can’t be adapted.

Here are a few questions to ask as you go through the assessment and evaluation phase:

  • What’s working well for us?
  • What needs improvement?
  • Why does it need improvement? Was the "best practice" inappropriate for the context or was it poorly implemented?
  • How can we amend the best practices to make them more relevant and appropriate for our circumstances?

When conducting your assessment, it’s a good idea to get feedback from the people who are implementing and using your contractor management methods – your managers and contractors, most notably. They will give you a better sense of whether the practices can be improved upon.

Conclusion

Best practices aren’t one-size-fits-all, but they are a great starting point. Following them ensures your contractor management is effective and your operation is safer.

Across industries, many professionals consider innovation to be a best practice. So figure out how you can make contractor management best practices work for you – and then make them even better.