A business can implement all the world-leading and class-defining strategies to their safety measures, but risk is still inevitable. This is a burden that companies will continue to bear regardless of their specific situation. Instead, what organizations should focus on is how much risk they’re willing to tolerate and what type of risk they’re willing to handle. More importantly, companies should determine what course of action to take should any predetermined or otherwise unpredicted risks arise in the foreseeable future. The concept of risk is one that has birthed an entire industry within contractor management, one that is responsible for foreseeing all types of risks that are potentially involved when conducting business operations. Risk tolerance is a pertinent concept to your employees and contractors that deal directly with the physical work of the projects on your job site, ultimately, they are the ones that dictate their personal level of risk tolerance. Nonetheless, it is also the job of EHS leaders to ensure that risk tolerance is assessed appropriately and precautions are enforced at the workplace. Having a proper protocol in place is essential for efficiently assessing potential incidents and for dealing with risk mitigation protocol when the need for it inevitably arises.
With that being said, an individualized analysis is required to be conducted for any company looking to assess its risk. Factors of risk tolerance are a good starting point to develop determining aspects of which a company deems appropriate for its line of work. To determine said factors, it is important to first look at the nature of work that your contractors conduct, their confidence levels in certain capabilities, and the capacities of unprecedented risk that may arise during the completion of a project.
Risk Tolerance Checklist
To begin assessing your company’s risk tolerance, use this guide to apply to scenarios specific to your organization:
Overconfidence in capabilities:
- An underlying theme commonly witnessed in workplace injuries is the overestimation of one’s capabilities. Contractors may become overconfident in their skills due to their vast experience. This causes some workers to overlook or ignore potential hazards. This type of complacency within a job site is a telltale sign of under-calculated risk that can at times go undetected up until an incident arises.
Repetition and familiarity:
- If a contractor completes the same task repeatedly, this may cause them to overlook the risks associated with it. This is because if they have completed said work before with no complications, they do not forecast that a complication still may arise from the task. In contrast, workers tend to be more aware of their practices when tackling a task that they are unfamiliar with.
Benefit trade-off:
- Contractors may be willing to accept increased risk if they deem it as a worthy tradeoff. Some factors that are deemed worthy are an increase in efficiency, a reduction in time spent on a single task, and more monetary benefit. Put simply, someone working on a task may willfully take on extra risk if they believe that the added benefit outweighs any potential negative consequences.
Confidence in equipment and machinery:
- Naturally, everyone expects that the necessary tools and machinery work just as expected at all times. However, this is evidently not always the case. PPE can sometimes be faulty, tools and machines may have undetected problems, and technology operated machinery can experience errors. These are all very common issues that contractors may not keep in mind when at work. The appropriate use and maintenance of machinery and equipment is a responsibility that falls on the shoulders of both the third party and the hiring organization. Therefore, mismanagement on either end will result in an increased amount of risk that the organization must undertake.
Unawareness and misunderstanding of hazards:
- This can be a particularly dangerous risk factor in many situations. Workers should not only be made aware of any potential hazards, but it is also essential that they understand them prior to starting their work. An unprecedented risk faced by a contractor will eventually become an unprecedented risk passed down to the employees and their organization. This is a scenario often witnessed with newer, lesser experienced contractors, and in situations where a worker is presented with an unfamiliar task. Not mitigating this issue prior to it occurring allows contractors to unknowingly increase their risk tolerance.
Personal past experiences:
- On an individual level, a worker’s personal past experiences can cause a significant influence on how they perceive and process potential risk. For example, if a worker has never suffered the consequences of workplace injuries or non compliance, they consequently may overlook possible risk simply due to the fact that they haven’t experienced it before. On the flip side, contractors who have experienced on-site incidents or otherwise know of someone who has, tend to lean toward a more cautious approach since they have had a personal occurence that has affected their outlook on hazard perception.
Observing internal practices:
- In health and safety, it is always good practice to lead by example. If a company suffers from non-compliance internally, there’s a great chance that their external hires will follow suit. Unsafe practices are upheld on the high level and make their way down to all other functions within an organization. For example, if a contractor witnesses an employee to be non-compliant, they may be enabled to believe that they can operate in a dangerous manner too. A scenario like this may serve as an evident demonstration that a strong health and safety culture is nurtured from within.
Liability of non-compliance:
- One of the primary reasons to implement a solid contractor management strategy is to appropriately assess, track, and enforce liability. Many organizations are unable to track their contractors’ activity, making it easier for workers’ activity to go unnoticed when non-compliance occurs. Furthermore, this creates a trickle-down effect in which third parties cannot be held accountable for any incidents due to the lack of structure in a compliance protocol.
Frequency of risk exposure:
- Similar to one’s overconfidence in their capabilities, frequent and repeated exposure to high risk settings may cause a worker to become complacent in their current safety practices. They may not feel the need to efficiently follow safety procedures and consequently transfer assumed risk to an unwilling party.
Using PPE as a protective shield:
- While PPE is an essential component of proper preventative measures, it is by no means an instrument that allows one to bypass other safety precautions. However, workers may attempt to take risks that they otherwise wouldn’t take if it wasn’t for their protective equipment. Workers may feel comfortable engaging in unsafe practices under the false pretence that they will remain protected, even when that’s not the reality.
To conclude, both hiring organizations and third party contractors are responsible for assessing and determining an appropriate level of risk tolerance. Using this strategy can provide valuable insight to EHS management to create a framework that effectively addresses hazards, risk, and liability faced by an organization. Ultimately, the level of risk one is willing to accept comes down to individual preference and experience. But, being able to dictate a common ground of what risk an organization is willing to undertake can make all the difference in their contractor management efforts.
Need help better assessing and understanding the risks that your business takes on? Safety conscious companies like Genpak and Jameson use Contractor Compliance to tackle and solve all their contractor management needs to make their workplace a safer space for everyone. This contractor management software solution is all it takes to completely transform your safety practices, book a demo to see how!
