Managing Increased Supply Chain Complexity

Neil HartleyHealth & Safety Issues/TrendsLeave a Comment

two people in hard hats fixing machinery

More than 1 in 7 (15%) of the UK workforce were self-employed in Q1 of 2020 (according to the latest ONS labour market data), which compares with less than 1 in 8 (12%) in Q1 of 2000. How do we expect the numbers of self-employed to change post-lockdown and what are the implications for worker safety?

The ONS data shows that the stand out sector for self-employment is construction where 86% of all workers are self-employed, accounting for 18% of all self-employed workers in the UK. Contrast that with manufacturing where only 1% of workers are self-employed, but which still accounts for 5% of all UK self-employed workers.

Traditional FM is hidden in the numbers of ‘administration & support services’ where 25% are self-employed (equating to 8% of all UK self-employed workers) but which includes PAs etc. making the numbers indicative at best.

In terms of when the dust settles in 2021 (hopefully), should we expect to see more self-employed workers or less?

We’ve already seen some businesses realign their workforces with significant redundancies and we still have furlough tapering and an end of the furlough program altogether to navigate. Layer in the impact that AI will have on all our workplaces and the skill shortages already endured by several sectors and it’s easy to imagine companies aiming for a reduction in fixed cost staffing (employees) augmented by the capability to meet capacity and skill demands with variable labour (the self-employed).

Outsourcing non-core activities is another consideration but one which simply passes the employee/self-employed question down to contractors/sub-contractors in the supply chain.

Regardless, this leaves us with the strong likelihood that the percentage of self-employed workers will continue to rise. After all, 1 in 4 of us already had a side hustle even before the coronavirus pandemic.

More contractors, more self-employed workers. Clearly there will be added complexity in the supply chain which, coupled with the increasing challenges on driving business performance, will either see companies cut corners with regard to safety or [and this is where the smart money is] there will be a ‘flight to safety’ where risk aversion trumps all.

So then how does the business meet the challenge of delivering on time, at cost with increased complexity in the supply chain and an over-arching climate of risk aversion?

ISO 45001 will play a part in mandating that “the organisation shall establish and maintain processes to ensure that the requirements of the organisation’s OH&S management system [that apply to their employees – Ed] are met by contractors and their workers”.

Ensuring that to be the case then requires, 1) improved contractor management and compliance together with, 2) improved safety knowledge transfer (site inductions etc.) across (sub)contractors and casual workers alike. Collaborative procurement is a third opportunity to improve safety (while driving business performance) by involving the supply chain in the design stage of projects but is beyond the scope of this post.

Improved contractor compliance and management together with safety knowledge transfer (through site inductions and other rigorous work authorisation and permit-to-work processes) are both delivered in deployments of e-permits.

It may seem that corralling contractors and the self-employed into a system to manage their compliance with safe working practices is a ‘step too far’. However, the underlying database of e-permits already holds all of this contractor data (who they are, their people and competencies, their insurance certificates etc.). Further, the permit-to-work process is instigated by the contractor in e-permits, further limiting the burden on the business.

Indeed, we often find new e-permits clients state their reason for choosing the system to be because contractors already know how to use it. To learn more about how e-permits can help you manage increasing complexity in your supply chain, please watch our recent webinar below and/or contact us here.

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