Best Practices for Contractor Management and Contractor Orientations


Best Practices for Contractor Management & Contractor Orientations Image

We work with a lot of clients to create training materials for manufacturers, including general manufacturing training, industrial maintenance training, health and safety training, and learning management systems to administer, deliver, track, and report on all that training.

Within that context, we create solutions to help our customers provide site-specific safety orientations to their contractors, visitors, and vendors.

Providing contractor orientations is an important aspect of contractor management, but it’s just one element. As a result, we’ve pulled together this quick overview of best practices for contractor management.

Give it the once-over, see what you think, and please leave your own thoughts, suggestions, and insights at the bottom in the comments section.

And download our free guide to online contractor orientation systems while you’re here.

Seven Aspects of Effective Contractor Management

We’re going to present seven different aspects of effective contractor management. Those steps are:

Contractor Management Flow Chart Image

This seven-phase overview is based on a five-phase overview presented in the National Safety Council/Campbell Institute document Best Practices in Contractor Management. It also matches what a lot of companies do in the real world. As with other materials from the Campbell Institute, their document is very nice and well presented, and we encourage you to read it in full. We’re not going to cover everything they do, and they don’t cover everything we’ll talk about, so it won’t be a waste of your time if you read this article and then read the second article as well.

1. Contractor Prequalification

The first piece of the contractor management puzzle is contractor pre-qualification.

This means carefully checking out a contractor before you hire the contractor to work for you.

There are three main components to this:

Contractor Pre-Qualification Flow-Chart Image

Let’s take a quick look at each.

Will you require a prequalification or not?

Most companies DO perform some type of prequalification check and, in layman’s terms, you’re playing with fire if you don’t.

In some cases, companies prequalify companies other for certain jobs that have been assessed as riskier than others.

Will you do it yourself or have a third party do it?

You can do this yourself, but it can be a lot of work.

As a result, there are companies out there who’ll do it for you. According to the Campbell Institute report, 10 of the 14 companies in their study used a third party to do this. (1)

One such company offers an analysis of the ROI of contractor prequalification.

Another such company gives some reasons why companies consider third-party contractor management services.

What should you check?

You can check lots of things, not just their EHS record.

The Campbell Institute document offers some interesting insight here. They say that although their study participants have formal guidelines that say pre-qualification should focus on “financial soundness, technical ability, management capability, and health and safety performance,” the factors the companies consider most are “contractors’ management and technical capability, past experience and performance, reputation, and proposed work methods. Environment, health, and safety ranked only about tenth in a list of important criteria in the literature review, and ranked even lowerin the surey results.” (2)

In addition, “A survey of those in the construction industry asked participants to rank the importance of ‘site organization, rules, and policies (health and safety, etc.)’ in awarding contracts. Though this particular factor was never ranked below 13 out of 37 for any type of project, the most consistently highly ranked factor was ‘ability to complete on time.'” (3)

So, that’s not to say companies don’t evaluate safety/EHS when prequalifying contractors, but one might make the argument that it should be considered more of a priority than it is.

But exactly what EHS factors do companies consider during prequalification?

In evaluating safety/EHS, according to Campbell, “all of the members in the study assess contractors on their safety statistics, such as Experience Modification Rate (EMR), Total Recordable Incident Rate (TRIR), fatality rate, DART, and other OSHA recordable.” The companies also check other safety metrics–for example, one “looks at a contractor’s TRIR as compared to an applicable NAICS code, worker compensation claims, injury logs, environmental reports and regulatory citations.” (4)

2. Pre-job Risk Assessment and Task/Job Hazard Analysis

The next aspect of contractor management is performing a risk assessment for the worked to be performed.

Typically, this is done by assessing risk in some type of risk matrix, like the one shown below.

Minor Serious Major Catastrophic/Critical
Very Likely

The risk matrix above considers probability and severity. The Campbell Institute document and survey found companies using other criteria as well, including “severity, frequency, and probability” and “incident likelihood, severity, cost, schedule, security, and other factors.” (5) You can use a risk matrix that seems right for you and includes what you think it should include.

For more information on risk management, risk assessment, and risk matrixes, see our Safety and Risk Management article.

Some companies do the risk assessment for the job before considering pre-qualification, and require pre-qualifications only for work that meets or exceeds a certain amount of risk (while, obviously, not requiring pre-qualification for jobs with lower levels of assesses risk). Other companies don’t base pre-qualification on the risk assessment, but make additional requirements for jobs with higher levels of assessed risk, such as “…hazardous job meetings….job walk throughs…(or exploring) different methods for completing the job.” (6)

3. Contractor Training

Contractor training (different than contractor orientations, which we’ll discuss below) is generally the responsibility of the contractor company. In short, the contractor company should ensure that their employees receive appropriate safety training.

Contractor Training Image

According to the Campbell Institute document, one company “stipulates that contractors are responsible for the training of their employees,” a second company “requires leaders to complete a 30-hour OSHA course and all other contracted personnel to complete a 10-hour OSHA course before beginning work,” and at a third company, “contractors must provide health and safety training.” (7)

Presumably, this is one of the things that’s checked during pre-qualification, so it’s not just injury/illness rates.

Click here for a free Guide to Effective EHS Training.

4. Contractor Orientation

Contractor orientation is not the same thing as contractor training (which we just discussed above).

As a best practice, organizations should and DO require contract employees to complete some form of site-specific contractor safety orientation.

Contractor Orientation Image

Going back to the Campbell Institute document again, we learn that “all organizations require safety orientation and skills training of contractors…” and that “all organizations also require special permits or training for specific kinds of work, including (but not limited to) confined space entry, electrical work, hot work, energy control, forklifts, elevated work, etc.” (8)

In my own real-world experience, which is echoed by what the Campbell document says (9), there are (at least) three ways to do this:

  1. Hold orientations in-person and onsite
  2. Manage orientations via an internal online system, including delivering at least some of the orientation material online
  3. Deliver orientations via an external online system accessible via the Internet (and a contractor-specific username/password), including delivering at least some of the orientation material online

Since this contractor orientation aspect of contractor management best practices is what’s truly in the Convergence Training wheelhouse, let’s take a closer look at this. In particular, we’ll look three things people don’t understand about contractor orientations or some misconceptions related to them.

Misconception #1: You’ve got to do orientations in either “online” or “offline” forms–you can’t do both

One common misconception is this has to be an “either/or” decision, but that’s not true. For example, you can use an online system to administer your contractor orientation, deliver some of your orientation materials online (on your own intranet or on the Internet), and deliver other parts of your orientation materials in person at your own site.

Misconception #2: Online contractor orientation management systems only manage online orientation materials

A second common misconception (closely related to the first), is that online contractor orientation management systems do nothing other than deliver online orientation materials. Again, that’s not the case. These systems cover all aspects of administering the training for you, plus you can use them to administer in-person/field-based/classroom-style orientations as well as online orientation materials.

Misconception #3: Instructor-led, field-based, “offline” orientations are always better than online orientation materials

And a third common misconception is that instructor-led, classroom-style orientations are “better” or “more effective” learning experiences than online orientations. Again, that’s not true, and there’s evidence to show this. Research shows that training in any method (such as instructor-led or online) can be equally effective or more effective, depending on the circumstances. And in some cases, online training is more effective than instructor-led.We won’t go into these points in detail here, but if you’re curious for more information, check out the classic book Evidence-Based Training Methods: A Guide for Training Professionals by the highly respected learning expert Dr. Ruth Colvin Clark (the book includes the research-based data I mentioned earlier) and/or read our article that lists some times when e-learning is actually the better choice than instructor-led/face-to-face training.

If you’re interested in learning more about online contractor orientation management systems, you can download our free Guide to Online Contractor Orientation Management.

5. Sub-Contractor Hiring, Management, and Training

Most companies rely on the general contractor to hire, manage, train (or ensure the training) of sub-contractors.

Subcontractor Training and Orientation Image

According to the Campbell Institute document, “The majority of research participants (10/14) specify that the general contractor is in charge of hiring subcontractors and managing their safety. In these situations, subcontractors are held to the same standards as general contractors, but it is the general contractor’s responsibility to apply those standards.” (10)

Because this responsibility falls on the general contractor, it’s yet another reason to choose general contractors carefully, and (it seems to me) it’s something that should be vetted during the pre-qualification process.

Of course, all subcontractors should still complete any site-specific contractor orientations, just as contractors do, and as discussed immediately above.

6. On-the-Job Observation

Another standard best practice is some form of periodic observation of ongoing work.

Image of Observing Contractors On-Site

According to the Campbell Institute, this “varies from daily checklists and/or safety talks to weekly walkthroughs, monthly and yearly assessments.” In addition to monitoring real work conditions, the Campbell Institute also notes that “the maintenance of incident logs is also crucial to monitoring contractor safety during a project.” (11)

As you’d expect, most companies have some form of policy for dealing with on-the-job infractions.

7. Post-work Evaluation

Performing some form of evaluation after the work is over is considered to be best practice.

However, according to the Campbell Institute document, although this is considered the right thing to do, it doesn’t happen that often–” Only five [of fifteen] participants have a post-job evaluation or specific guidelines for contractor requalification.” (12)

Contractor Post-Work Evaluation Checklist Image

Some methods of performing these evaluations and/or uses of post-job evaluations include:

  • Using post-job evaluations when evaluating contractor for future jobs
  • Assessing safety records of companies at end of year or end of contractor period
  • Including safety, customer service, and quality of finished work in post-job evaluation
  • Performing safety and operation inspections for every process change, enhancement, or facility improvement that’s not “routine” and compiling these for the post-job evaluation
  • Recording all incidents associated with a contractor for use in post-work evaluations
  • Looking at the number of claims from contractors to determine if work was done safely
  • Reviewing contractors’ records of effectiveness of safety orientation and training (testing, observation an injury rates, etc.) (13)

Based on the findings in the Campbell Institute document, the post-job evaluation phase seems to be the aspect of Contractor Management that’s most in need of improvement and standardization.

Conclusion: Best Practices for Contractor Management

As you see, this is still a dynamic subject area and best practices are still being formed. But if you make sure you’re covering each of the seven aspects listed above, your contractor management program will be well served.

We invite you to share your own thoughts, experiences, and practices below. What do you do for contractor management? How well has it worked? What have been some big successes for you, some challenges, and maybe even some failures? What are you thinking of doing differently in the future?

Hope you enjoyed this article. Don’t forget to download the free guide to online contractor orientation systems included below.

Contractor Orientation Buyer's Guide

Online Contractor Orientation Buyer’s Guide

Everything you need to know before buying online contractor orientation content or management sytems.

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(1) Best Practices for Contractor Management, National Science Council/Campbell Institute, p. 7 (retrieved on 2/4/2016 from

(2) Campbell Institute, p 3.

(3) Campbell Institute, p 3. This quote references a study and article titled “Multi-criteria selection or lowest price? Investigation of UK construction clients’ tender evaluation preferences” that appeared in Engineering, Construction and Architectural Management, 8(4), 257-271.

(4) Campbell Institute, p. 3.

(5) Campbell Institute, p. 8.

(6) Campbell Institute, p. 8.

(7) Campbell Institute, p. 9.

(8) Campbell Institute, p. 9.

(9) Campbell Institute, p. 9.

(10) Campbell Institute, p. 9.

(11) Campbell Institute, p. 10.

(12) Campbell Institute, p. 12.

(13) Campbell Institute, p. 12.

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