Your contractor compliance solution could be failing you


Saturday, 01 February, 2020

Your contractor compliance solution could be failing you

Let’s be honest. Do you think you’ve got it all covered when it comes to contractor compliance? Do you realise that whether you are using a paper filing system, an Excel spreadsheet or even an online software solution, there is still a chance that your contractors aren’t actually compliant? The truth is, even with the very best technology at your fingertips, you could still be exposing your business to significant risk by engaging non-compliant contractors. Software solutions are very good at providing a framework to manage contractor compliance information, but these systems need to be used in conjunction with a human resource to support the process and the contractor.

When it comes to engaging contractors, you can’t take any chances on their compliance not meeting your criteria; the following are three common misconceptions that can lead to your compliance solution falling down:

1. Insufficient planning

The first step towards building an efficient contractor compliance system is in the planning. To set up any system that you want to implement, you will need to define the different types of contractors you engage, then determine the relevant criteria for each type of contractor. The first question you need to ask yourself is whether you really have the expertise in-house to achieve this. You’ve no doubt got a pretty good idea of your own contractor engagement standards, but are you sure of the legislative requirements and industry best practices? To pull together the checklist of compliance information you require, you are going to need a considerable amount of time to investigate, as well as liaise with your internal stakeholders, ensuring that all requirements have been considered and agreed to.

If you don’t consult all relevant parties and haven’t laid the foundational plan for compliance, you could be setting yourself up for failure and significant risk down the track. The only way to mitigate the risk is to put the effort into the planning phase, detailing a comprehensive checklist that is then used as the one source of truth across all business stakeholders engaging contractors.

2. Lack of prequalification

Engaging an external party without ensuring they have been prequalified in accordance with your requirements is an enormous risk. Prequalification is the first step in protecting both your business and the contractors you engage.

The compliance checklist may include the following:

  • Insurances — contractors are required by law to hold insurance, and you are required to exercise due diligence to ensure the appropriate insurance is in place and covers your organisation adequately in the event of an incident.
  • Licences — your contractors need to be appropriately qualified to undertake the work and deliver the project successfully, to the right standard.
  • Safety systems — it is a legal requirement for contractors involved in high-risk work to have robust safety systems and control measures in place to manage the risks. WHS legislation also states that as a PCBU, you need to exercise due diligence to check that these safety systems are in fact in place and monitored.
  • Contract specific documentation — these documents need to be read, signed and collected. Without them, the risk is that your contractors could take shortcuts in their work, plead ignorance regarding contract stipulations, and ultimately not be compliant with your compliance requirements.

A thorough prequalification process not only requires requesting and gathering all the necessary documentation, but also checking and validating the information. To implement this, you first need to have a prequalification checklist that stipulates the requirements, followed by the human resource to confirm the criteria is actually met and documentation is authentic. Contractors may need support in understanding their non-compliances, and it is the responsibility of the human experts to provide this guidance.

3. Unsustainable maintenance

Once you’ve done all the hard work of setting up your compliance checklist and prequalifying your contractors, you’re going to need a solution in place to help you to maintain compliance. By utilising a software system, you can keep on top of renewals for contractors’ insurances, certifications and qualifications. If you engage several contractors, an automated system can be a lifesaver, sending timely reminders to relevant parties.

However, relying on an automated system alone isn’t enough. Anyone can upload a document to a software portal, but there is no guarantee that the document is what it is supposed to be. Documentation still requires human oversight to check its validity. It is important to note that technology isn’t straightforward for everyone. Your contractors might not be as tech-savvy as you are and may need some additional support to use the system and upload the correct documentation. It is vital that they have a point of contact and available support network, so compliance can be made simple and achievable.

Don’t risk non-compliance — make sure your compliance solution is fit for purpose

The chances are you know what you need to do or should be doing to make sure your contractors are compliant. The difference, however, is doing it as efficiently and effectively as possible. To get the job done properly, you need properly thought out validation criteria you can rely on, a robust process for ongoing compliance and lastly a sustainable technology solution. Most importantly, compliance needs to be supported by people. If your current solution doesn’t deliver on all of these levels, it may be a good time to review your contractor management process.

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