What's the biggest advantage of a good prequalification system?
There are many advantages to a good prequalification system, so it may be hard to select one above all others. Since it comes down to safety, for the worker and for the business, let's start with compliance.
Compliance regulations are always changing, and once a company has grown beyond the small in-house system, it’s no longer easy to verify important information when choosing a contractor (learn about The Case for Prequalifying Contractors and Suppliers). For example, recent national housing challenges due to weather and wildfire disasters have made it necessary to be able to rebuild a community quickly, but when companies on tight timelines can't keep track of documentation, mistakes happen. Mistakes and omissions are costly and, in some cases,compliance issues can shut the company down completely. By the time your compliance issues are worked out, the opportunity to grow and expand business could already be in the hands of the competition.
According to the U.S. Department of Labor, national employment has almost doubled since 1971 and now includes over 130 million workers at more than 7.2 million worksites. Since the passage of the OSH Act, the rate of reported serious workplace injuries and illnesses has declined from 11 per 100 workers in 1972 to 3.6 per 100 workers in 2009 (read more about keeping contractors and employees safe in The 4 Essential Elements for Ensuring Contractor and Workplace Safety). OSHA safety and health standards now include specific regulations for trenching, machine guarding, asbestos, benzene, lead, and bloodborne pathogens. Compliant companies, continually making changes in the way they conduct business and ensuring they meet the standards, have prevented countless work-related injuries, illnesses and deaths.
Companies that don’t centralize prequalification systems have more areas where information can be misdirected or lost. Without a well-defined and coordinated system in place, verifying compliance with corporate requirements can fail and create a recipe for disaster. A quality, centralized prequalification system will use technology to automatically remind contractors to update expiring documentation, and have the ability to store documents electronically for quick access from any department that needs them. For best practices, your company’s contractor prequalification management system should organize data by relevance: Employees in EHS, Purchasing, Operations, Risk Management, Finance, Maintenance and any other departments you identify. This streamlined, efficient process will improve productivity and reduce administrative costs, and make compliance issues much easier to manage and document.
More Q&As from our experts
- Why don't in-house contractor prequalification systems work?
- Can implementing a rigorous safety culture actually reduce costs?
- How do you go about changing the culture?