A Guide on Contractor Risk Management & Safety Considerations

Published: March 20, 2024

The Nitty Gritty

  • Risk is an unavoidable part of any project, and the more complex the project, the more diverse the risks.
  • Contractor risk management is a process of anticipating and preparing for risks so your field service team doesn’t get tripped up.
  • Streamline contractor risk management with project software and safety for efficient work and productive team members.
contractors on site high fiving

When it comes to a project, the project manager, general contractor, and subcontractors will have their own idea of risk, process, and mitigation. With effective contractor risk management, field service teams will be able to find the same page and work from it. Risks will always be present, but with communication and a plan, no one will be left in the lurch for long.

What is Risk Management?

Contractor risk management is the overall process of identifying risks, assessing them, and mitigating them. Before a project gets underway, a risk analysis of the project will be undertaken to ensure that any risk to the project is identified before it happens. Some of these risks include supplier delays, estimation risks, dangerous equipment, team health and safety, equipment failure, and more. When you’re looking to scale up your field service team or expand your business, the last thing you need is delays that cost time and money.

The benefit of experience in both construction and project management is that the manager, general contractor, and subcontractors will all be aware of risks, but their experience and expectations will differ. Field service teams will have their own policies and procedures that they’ve developed.

With any project, no one will know everything and certainly aren’t going to know who knows what. Depending on the project, location, and supplies, there might be brand-new risks to deal with!

Anyone who’s managed a big project before is aware that even a small issue can balloon into huge knock-on problems.

Effective Risk Management Equals Efficiency

So, this is where contractor risk management comes in. It’s one thing if the project does a big involved risk analysis, gets all its ducks in a row, and signs off on the most detailed project ever, then most of the guys never see it or hear anything about it.

And sure, some subs might only be coming in for a short time; they know what they need to know, right? If the teams aren’t sure what the timeline is, what the supply situation is like, or what the safety protocols are, this can cause delays and even dangerous situations.

And contractor risk management isn’t just about safety! It’s about reducing risks such as mismanagement of subcontractors, running overtime, supply shortages, faulty work/equipment, etc. It’s about knowing the chance of delays occurring and what can be done to fix them.

Risk management is about transparency. Complex projects run the risk of delays, and that is part of risk analysis. But what happens when you don’t know what caused the delay? When the project manager is saying one thing, but a subcontractor is saying another? While no one enjoys it, a paper (or digital) trail that is clear, detailed, and up-to-date means any risks can be identified as the job continues. The better we understand and identify problems, the better we respond.

No one likes hearing bad news, especially under time pressure. But if we don’t hear it, we can’t respond to it. A doctor won’t cast a broken leg unless you visit a clinic and show them.

Transparency, safety, detail, and preparation. In the long run, they all pay dividends.

Contractor Risk Management Practices

So, we’ve covered the importance of contractor risk management; let’s cover some of the details.

Timely Data and Documentation

With all the moving parts of a large project, you want to know what’s happening and when. Physical paperwork is important to keep, but when you’ve noticed something, someone needs to know. Field reporting with management software means you can log in and report what you’ve noticed immediately. It means you can make updates about the status of your work, safety issues, or problems you’ve noticed.

Having this data available to access is also important as you’ll be able to assess new, updated information about the project on demand.

Tech Training and Information

If you’re adopting a new field management system, it will take time for the team to adapt. This is especially important going into a new project: the last thing you want is someone stuck on how to check their schedule or submit their reports! They might be able to do their work with their eyes closed (not recommended) but get stuck on how to submit that it’s done on yet another app.

Check with your team and see what they need. There’s no shame in not understanding something new, and you and the team are all in this together!

Clear Scheduling and Time Management

Essentially, who’s coming, what day, what time? This can seem straightforward, but if you’re managing a large team, it’s important to have all of this info in one accessible place. Some subcontractors won’t be showing up until the tail-end of the project, others might be coming in and out, and the rest might be there for the majority of the project. Project management software helps immensely, as it centralizes scattered schedules and teams in one place.

Contractor risk management ensures all your contractors know when they’re coming, what they’re handling, and how to respond to a delay. Who to contact if they’re held up by other work, what the process is for calling out sick and how to go about moving schedules. By having this in place, workers will feel more comfortable, knowing there is a process.

Regular Safety Training

Construction projects are known for taking their time. For high-quality work, there’s no substitute. This means the teams that come through a project through the months will be different. Contractors will change, and the construction site itself will change.

A contractor risk management system should have regular safety training in place, as well as checks to ensure everyone on-site has attended the training required.

Adherence to safety regulations and standards

You can do all the training in the world, but sometimes the team doesn’t listen. Or the site itself is unsafe, which is against everyone’s best efforts. It’s important to ensure that the work site is in line with safety regulations and standards and that the project can respond to unsafe conditions.

Safety Audits and Inspections

Look, no one relishes inspections. Maybe inspectors do. But, having an outside set of eyes on your project and access to regular safety audits can ensure that equipment and processes are being followed. It may take extra time and halt work, but a pinch of prevention is worth a pound of cure.

This ties into the above points as well. As the project changes, so will the safety procedures. Are there different safety risks now? Height, equipment, and processes will change as the project develops. Is different equipment needed, and where is it stored? Safety audits mean you can check your blind spots and fix any issues.

Emergency Response Plans

Safety audits and adherence will prevent many injuries and emergencies. But of course, emergencies never come at a good time, and they will cost the project. Mistakes and unexpected things happen. However, you can prepare for and prevent many emergencies with robust response plans.

With effective contractor risk management, emergencies can be navigated as safely as possible.

Encourage a culture of safety

When it comes to contractor risk management, safety comes first. This can be hard for everyone to put first sometimes. There are deadlines and everyone in the biz knows what a missed deadline can do to a project. They’re going to want to finish and push through. Others might feel pressured not to report issues or risks they notice because they don’t want to ‘cause’ a delay. That pressure will come from lots of stakeholders, but if you’re running the team, it’s your team.

Ensure that your team is encouraged to follow safety procedures and policies and report what they see. Lead by example and keep to safety practices, follow training and equipment procedures.

A Trusting Team is Productive

By being there for your team and standing up for them, you’ll be someone they trust. You’ll be a leader who listens to their problems and responds to them. You’ll demonstrate that their hard work and attention aren’t for nothing. Workers often don’t quit the job itself; they quit their management.

The last thing you want is an otherwise good worker deciding that if the boss doesn’t care, they don’t have to care. Workers who think their boss will force them into unsafe conditions will think it doesn’t matter if there are safety issues.

A team that sticks together will work hard and get the job done safely.

Streamlining Contractor Risk Management

In this article, we’ve mentioned field management software and tools as part of your considerations for your field service team.

A robust management software can take all the moving parts of your business and put them in one place, accessed directly from your phone or computer. With the ability to have documents, reporting, safety policies, schedules, contacts, and more all in one place, your business will save time, money, and stress.

Simpro’s project management software has everything you need to begin streamlining your field service business, so you have everything you need when you need it.