Everyone understands the benefits of using contractors in a business:
- More flexibility as expertise can be provided when and where needed
- Easier to scale the workforce up or down as the business requires
- Enables the business to react quickly to new projects
- Business can “plug and play” workers into projects (i.e. there is no training required to get people up to speed compared with many new-start employees)
- It is generally less costly to use contractors
Of course, these benefits extend well beyond the use of contractors in property and facilities management to their use in lower risk areas such as office staff, but the drivers behind the on-going, dramatic change in working practices are going to have a profound effect on those using contractors for the aforementioned higher risk work.
For those in utilities, construction, petrochemical and other similar industries, as well as in general facilities and property management, what are the major drivers and resultant challenges in terms of contractor management that will make the need for change a compelling imperative?
In terms of major drivers, there are two broad categories, technology and political. This is an impossible topic to cover fully here, so we’ll stay at a very high level.
The pace of technological change has been astounding in the past fifty years and even more so in the last twenty with the advent of the internet and smartphone.
Indeed, technology is now moving so quickly, its ‘products’ are outstripping Government’s ability to legislate. Witness driverless cars. Or, even something as relatively low tech as drones…
Renewables and energy efficient devices are producing the utility death spiral with prices trending to zero and below. How can businesses continue to make the investments needed to survive, let alone keep their people safe?
What about AI, machine learning, robots and cobots? Are they here to help or replace us? If you follow Ray Kurzweil you’ll know that he predicts, “The year 2029 is the consistent date I’ve predicted, when an artificial intelligence will pass a valid Turing test — achieving human levels of intelligence. I have also set the date 2045 for singularity when all advances in technology, particularly in artificial intelligence, will lead to machines smarter than human beings.”
If you’re a baby boomer then 2045 might seem somewhat irrelevant but the European Agency for Safety and Health at Work recently produced their report, “Foresight on new and emerging occupational safety and health risks associated with digitalisation by 2025” which explores the impact of [particularly] AI and robotics on worker wellness.
Technology is also enabling disruptive business models (Uber et al) as well as empowering individuals to learn new skills and provide those skills globally. An internet connection today is truly a gateway to knowledge, re-skilling and a career (or careers) for as long as we want and our health holds out.
I think we’ll leave this one right here, but suffice to say and whichever way you look at it, the political world is in a period of change which affords less stability for businesses to invest in fixed costs. To the point made earlier, you would have to question whether the current political establishment is even capable of managing/controlling/keeping us safe from/helping us take advantage of the dramatic speed of technological change.
So, what does all this have to do with contractor management?
Quite simply, a dramatic increase in the complexity of the workforce.
More people doing multiple jobs – already one in four UK workers have a side hustle; more people working from home; more people working longer; more self-employed people; more people falling in the gap between employed and self-employed (the gig economy) where health and safety legislation is still evolving; with the result of an ever increasing number of people that you need to manage to get your project done and who will not be an employee.
Sectors such as utilities are also reaching out to contractors more because of severe skill shortages. The Energy and Utilities Skills Group predicts the UK utilities sector will need to fill 221,000 vacancies by 2027. As many as 100,000 of those vacancies will be replacing utilities employees currently in the sector but who will retire within the next 10 years.
Current challenges in utilities sector recruitment demonstrate just how difficult this is going to be. A 2015 Employer Skills Survey, for example, discovered it was harder to fill vacancies in the energy and utilities sector than any other sector in the UK. In 2015, 36 percent of vacancies in the sector were hard to fill due to the dearth of skilled applicants.
In 2013/14, 329,000 people completed higher education. Only 2,200 of them, however, went to work in the utilities sector.
The need to manage an increasing number of contractors not only adds complexity but brings a legal and moral obligation to protect the health and safety of contractors as much as your own employees. While this has always been the case, ISO 45001 stipulates that the processes and procedures required to be in place for the safety of employees are now extended across the supply chain which means extending the rigour to contractors.
The ISO 45001 standard states:
“The organisation shall establish and maintain processes to ensure that the requirements of the organisation’s OH&S management system are met by contractors and their workers. These processes shall include the OH&S criteria for selection of contractors.”
To see a demonstration of how e-permits can bring order and peace of mind to the management of your contractor base register for our webinar to be held on February 21st, 2019 at 12pm.